Oil News: Trump’s Energy Plans Push Crude Prices Toward $75.47 Pivot

Crude Oil Prices Decline as Rally Stalls at Key Resistance Levels

Light crude oil futures are under pressure, marking the third consecutive day of losses as selling intensifies. Prices peaked at $79.44 last week, encountering stiff resistance near long-term tops at $78.28 and $80.00. The market is now testing its pivotal support level at $75.47, with the next downside target at the 200-day moving average of $71.00 if selling accelerates.

At 11:07 GMT, Light Crude Oil futures are trading $75.56, down $1.83 or -2.36%.

Trump’s Tariff Delays Weigh on Oil Prices

Oil prices fell on Tuesday following U.S. President Donald Trump’s announcement to delay new tariffs on imports from Canada and Mexico until February. Initial relief from the delay turned to concern as traders digested the implications of potential 25% tariffs on Canadian and Mexican imports, which could disrupt North American energy trade. The strong U.S. dollar added to downward pressure, making oil more expensive for international buyers.

Market analyst Tamas Varga of PVM noted that Trump’s tariff plans and a stronger dollar are driving the current weakness in oil markets. Meanwhile, Trump’s pledge to increase U.S. oil and gas production adds a bearish undertone as the administration aims to expedite energy permitting.

China’s Russian Oil Imports Reach Record Highs

China, the world’s largest crude importer, increased its purchases of discounted Russian oil by 1% in 2024, reaching a record 2.17 million barrels per day (bpd). However, total crude imports into China fell by 1.9% last year, reflecting weaker economic growth and reduced demand. Russian supplies outpaced imports from Saudi Arabia, which fell by 9% as refiners favored cheaper barrels amid tight margins.

Shipments from other sanctioned sources like Iran and Venezuela remained limited. While no Iranian oil imports were officially recorded for 2024, volumes from Malaysia, often a hub for trans-shipping sanctioned oil, surged 28%, ranking it as China’s third-largest supplier.

Sanctions and Supply Concerns Loom Large

Rising U.S. sanctions on Russian oil producers and tankers are another factor influencing crude markets. These measures, targeting over 180 vessels, are expected to tighten global supply by making Russian crude harder to transport. Analysts predict higher shipping costs and supply chain disruptions will underpin oil prices in the medium term.

In response to the sanctions, major importers like China and India may seek alternative suppliers, potentially driving up premiums for Middle Eastern and African crude. Freight rates for shipments from Russia to Asia have already spiked, adding further bullish elements to the market outlook.

Market Forecast: Downside Risks as Prices Test Support

Crude oil is currently testing its near-term pivot at $75.47, with buyers potentially stepping in at this level. However, a decisive break could lead to accelerated losses, targeting the 200-day moving average at $71.00. Upside potential remains capped by resistance at $79.44, with a stronger dollar and geopolitical developments likely to shape price action. Traders should monitor U.S. inventory reports and further developments in tariff and sanction policies for near-term cues.

More Information in our Economic Calendar.