On Wednesday, international oil prices continued their decline. Brent crude futures fell by 0.4%, settling at $79.00 per barrel, while U.S. crude futures dropped by 0.5%, reaching $75.44 per barrel. Brent crude has fallen for five consecutive days for the first time since last September, and U.S. crude has faced a four-day losing streak since last November. Both major benchmark crude futures have closed at their lowest since January 9 over the past two days.
The market is closely watching U.S. President Trump's proposed tariff plan and its potential impact. Analysts from Ritterbusch and Associates, an energy consultancy, noted in a statement, "The new sanctions measures the Trump administration might adopt remain unclear, particularly the possibility of imposing tariffs on Canada and Mexico, which is currently one of the main uncertainties faced by traders."
In several statements this week, Trump indicated the possibility of imposing tariffs on European imports but did not provide further details. He also warned of new tariffs on Russia if it does not reach a peace agreement with Ukraine. Additionally, he mentioned that the government is "very likely" to stop oil imports from Venezuela. This decision could further impact Venezuela's economy, a member of the Organization of the Petroleum Exporting Countries (OPEC) already sanctioned by the U.S.
According to data from the U.S. Energy Information Administration (EIA), in the first 10 months of 2024, the average daily oil imports from Venezuela to the U.S. reached about 200,000 barrels, higher than the average of 100,000 barrels in 2023. If Trump's move becomes a reality, it will have a significant impact on energy trade between the two nations.
Regarding OPEC, Iran sent conciliatory signals to Western leaders at the Davos Forum on Wednesday. A senior official denied accusations that Iran seeks to develop nuclear weapons and expressed willingness to improve relations with the West through negotiations. Meanwhile, Saudi Arabia's November oil exports surged to their highest level in eight months, demonstrating the major oil producer's strong response to market demand.
The drop in oil prices reflects market concerns that Trump's tariff policies could suppress global economic growth and underscores the significant impact of geopolitical and OPEC dynamics on the energy market. In the short term, the energy market will continue to face multiple uncertainties.
