Crude oil prices advanced on Wednesday as rising geopolitical risks and fresh U.S. sanctions on major oil exporters Venezuela and Iran renewed supply concerns across global energy markets.
Brent crude oil, against which Nigerian oil is priced, rose 20 cents or 0.3% to trade at $73.22 per barrel by 05:04 a.m Nigerian time, while West Texas Intermediate (WTI) climbed 20 cents to $69.20 per barrel.
Both benchmarks touched their highest levels in three weeks during the previous trading session, supported by tightening supply expectations and stronger-than-forecast inventory data out of the United States.
The upward movement in prices comes as the United States intensifies its efforts to curb crude exports from both Iran and Venezuela with a fresh round of restrictions targeting firms and vessels involved in shipping oil to China, the top buyer of crude from both countries.
The uncertainty surrounding enforcement has caused disruptions, particularly in Venezuelan oil trade to Chinese refiners.
President Donald Trump’s recent executive order authorizing broad-based 25% tariffs on imports from countries purchasing Venezuelan crude under the International Emergency Economic Powers Act has further escalated the standoff.
The move is aimed at cutting off revenue streams to the Maduro regime, but has also raised concerns about near-term supply reductions in the global market.
“The market is pricing in geopolitical risk premiums as Washington expands its sanctions footprint,” said Priyanka Sachdeva, senior market analyst at Phillip Nova. “Concerns over future availability of Venezuelan and Iranian crude are fueling the current bullish sentiment.”
Adding to the rally was data from the American Petroleum Institute showing U.S. crude inventories fell by 4.6 million barrels last week, significantly outpacing analyst expectations of a 1 million barrel decline.
The drawdown signals strong domestic demand in the world’s largest economy and reinforces optimism around consumption heading into the second quarter.
However, analysts caution that broader macroeconomic uncertainties could limit further gains.
The imposition of aggressive tariffs and prolonged sanctions may weigh on global trade activity and suppress demand growth in the medium term.
Meanwhile, diplomatic developments between Russia and Ukraine, brokered in part by Washington, have contributed to a marginal easing of fears around energy infrastructure attacks.
Despite these risks, traders are closely watching for the release of official U.S. Energy Information Administration (EIA) data to confirm inventory trends and assess near-term demand dynamics.
With global markets navigating both geopolitical flashpoints and economic headwinds, the oil price outlook remains volatile, but current momentum suggests that supply-side risks are once again taking center stage.
