Trade War Fears Weigh on Oil, Set for Third Weekly Drop

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Oil prices edged up slightly in early Asian trading on Friday but remained on course for a third consecutive weekly decline, weighed down by U.S. President Donald Trump’s renewed trade conflict with China and threats of additional tariffs on other nations.  

By 0150 GMT, Brent crude futures had gained 15 cents to reach $74.44 per barrel but were set for a 3.2% weekly drop—their steepest decline since September 2024. This marks the first time in five months that oil prices have declined for three straight weeks.  

Analysts at BMI noted that concerns over a potential trade war have fueled fears of weaker oil demand, exerting downward pressure on prices.  

Over the weekend, Trump announced a 10% tariff on Chinese imports as part of a broader effort to improve the U.S. trade balance while postponing steep tariffs on Mexico and Canada.  

“This development has overshadowed Trump’s February 4 executive order reinstating his maximum pressure campaign on Iran, which includes a commitment to reducing Iran’s oil exports from over 1.5 million barrels per day to zero,” BMI analysts stated.  

Oil prices had settled lower on Thursday after Trump reaffirmed his pledge to boost U.S. oil production, unsettling traders a day after a significantly larger-than-expected increase in crude stockpiles was reported.  

Rising U.S. crude inventories also added to the downward pressure on prices.  

Since Trump took office on January 20, Brent crude has fallen by more than 8%, while WTI has declined by over 7%.

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