Oil prices dipped around 1% on Wednesday after Kazakhstan emphasized it would prioritize its own interests over OPEC+ output agreements, overshadowing earlier gains driven by U.S. sanctions on Iran, falling crude inventories, and signals of easing U.S.-China trade tensions.
Brent crude futures dropped 61 cents, or 0.9%, to $66.83 per barrel by early afternoon, while U.S. West Texas Intermediate crude slipped 55 cents, or 0.86%, to $63.12. Earlier in the session, Brent had peaked at $68.65, its highest level since early April.
Kazakhstan’s new energy minister said the country would make oil production decisions based on national needs, a stance that has drawn criticism from other OPEC+ members, particularly after Kazakhstan surpassed its agreed output quota.
Despite the bearish signal from Kazakhstan, oil prices found some support from the United States, which imposed new sanctions on an Iranian shipping magnate. The targeted network reportedly handles substantial volumes of Iranian liquefied petroleum gas and crude oil.
Additional bullish sentiment came from private inventory data indicating a decline in U.S. crude oil stocks by approximately 4.6 million barrels last week. Gasoline and distillate inventories also posted notable drops of 2.2 million and 1.6 million barrels, respectively.
Official government stockpile figures were expected later on Wednesday, with market expectations pointing to a more modest drop in crude supplies.
Energy demand prospects also improved as President Donald Trump signaled openness to lowering tariffs on Chinese imports, while softening his tone on the Federal Reserve. Trump’s comments followed repeated criticism of Fed Chair Jerome Powell, although he ultimately said he had no intention of removing him.
