Oil prices edged higher on Friday but were on track for their largest weekly decline since October as uncertainty surrounding U.S. tariff policies and an impending increase in output from OPEC+ weighed heavily on market sentiment.
Brent crude oil, against which Nigerian oil is priced, rose by 50 cents or 0.72 percent to settle at $69.96 per barrel while U.S. West Texas Intermediate (WTI) gained 47 cents, or 0.71 percent to close at $66.83 per barrel.
Despite the modest recovery, Brent was down 4.9 percent for the week while WTI recorded a 4.8 percent drop — the steepest weekly losses for both benchmarks since mid-October. The declines came amid a confluence of bearish factors, including increased supply from OPEC+ and mounting concerns about the impact of U.S. trade policies on global demand growth.
Market volatility has been amplified by the shifting stance of the U.S. administration on tariffs. On Thursday, President Donald Trump temporarily suspended the 25 per cent tariffs on most goods imported from Canada and Mexico until April 2, though levies on steel and aluminium are set to take effect as scheduled on March 12. Analysts warn that the uncertainty surrounding the administration’s trade policy is stalling business decisions and dampening demand forecasts for crude.
“It looks like the financial markets are in full panic mode, no longer easily pacified by Trump’s one-month postponements and exemptions on import tariffs,” said Vandana Hari, founder of oil market analysis firm Vanda Insights. “That leaves crude stuck around four-month lows, albeit vulnerable to further slides,” she added.
Compounding the pressure, OPEC+ — a coalition of the Organization of the Petroleum Exporting Countries and its allies — announced this week that it would proceed with its first output increase since 2022, adding 138,000 barrels per day to the market starting in April. The decision to raise quotas came as Russian and Iranian oil exports to China, the world’s largest crude importer, showed signs of recovery. Non-sanctioned tankers have been transporting increased volumes of Russian and Iranian crude, easing immediate supply concerns.
Fitch’s research arm, BMI, issued a note highlighting that risks to oil prices remain tilted to the downside as new supplies from OPEC+ and non-OPEC producers threaten to push the market into oversupply. The report emphasized that elevated inventory levels in the United States and increased output from key producers could cap any significant upside for oil prices in the near term.
Brent prices fell to their lowest level since December 2021 earlier this week after data showed a rise in U.S. crude inventories. The bearish sentiment was further exacerbated by concerns that the U.S. administration’s strategy to curb Iranian oil exports could strain global trade flows.
In a speech to Wall Street executives, U.S. Treasury Secretary Scott Bessent reiterated plans to target Iran’s oil sector and drone capabilities. Reports also emerged that Washington is considering a plan to inspect Iranian oil tankers at sea, part of a broader strategy to drive Iran’s oil exports to zero.
