Crude oil prices dipped marginally on Thursday as markets recalibrated after a strong rally driven by tightening supply signals and new U.S. trade measures.
Despite the decline, prices remain near their highest levels in a month, supported by falling inventories and renewed geopolitical risk.
Brent crude oil, against which Nigerian oil is priced, declined by 23 cents, or 0.3% to trade at $73.56 per barrel as of 10:12 a.m. Similarly, West Texas Intermediate (WTI) dropped 21 cents or 0.3% to settle at $69.44 per barrel.
The pullback comes after a 1% surge on Wednesday that propelled oil benchmarks to their highest levels since February, defying broader weakness in global equity markets.
Market analysts attributed the earlier rally to a combination of fundamental factors, including lower U.S. crude and fuel inventories and the latest round of U.S. sanctions targeting Venezuelan oil exports.
The imposition of 25% tariffs on potential buyers of Venezuelan crude by the U.S. government has further restricted access to global supply and disrupted trade flows.
As a direct consequence of the tariff announcement, India’s Reliance Industries, operator of the world’s largest refining complex, has reportedly suspended crude oil imports from Venezuela, according to sources familiar with the matter.
Tamas Varga, senior analyst at PVM Oil Associates, noted that the rally in crude has remained resilient despite external headwinds, including equity market softness.
However, he cautioned that future pricing would largely hinge on developments in U.S. trade policy.
“There are fundamental justifications for oil’s recent bounce,” Varga said. “But it’s difficult to ignore the fact that U.S. tariffs could be the ultimate trigger for the next $10 to $15 move in either direction.”
Adding to the complexity, traders are also monitoring the impact of new U.S. tariffs on imported cars and light trucks, set to take effect next week.
While such measures are generally viewed as negative for energy demand, some market participants argue that higher vehicle prices could delay the adoption of fuel-efficient models, resulting in sustained oil consumption in the near term.
Tony Sycamore, market analyst at IG, stated, “Auto tariffs may indirectly support crude prices by slowing the shift toward low-emission vehicles, particularly in North America.”
Meanwhile, Singapore-based DBS Bank said it does not expect oil prices to return to early 2025 highs in the near term, pointing to persistent uncertainty over U.S. trade policy and potential tariff escalations that could cap demand growth globally.
With oil markets caught between geopolitical pressures and trade-related risks, price direction is expected to remain volatile.
Traders are now focused on upcoming inventory data, OPEC+ supply signals, and further clarity on U.S. trade measures in the coming weeks.
