Oil prices moved higher on Wednesday as markets weighed a temporary shutdown at two major oilfields in Kazakhstan, alongside expectations of rising U.S. crude inventories and renewed geopolitical concerns linked to U.S. tariff threats connected to Greenland.
Global benchmark Brent crude climbed 11 cents, or 0.2%, to $65.03 per barrel by 1343 GMT, while U.S. West Texas Intermediate (WTI) rose 14 cents, also 0.2%, to $60.50 per barrel.
Both contracts had already posted gains of around 1.5% in the previous session after OPEC+ member Kazakhstan suspended production at the Tengiz and Korolev oilfields on Sunday due to power distribution disruptions.
In another development, crude from the Kashagan field has been redirected to the domestic market for the first time. This move followed logistical constraints at the Black Sea CPC terminal, which industry sources said suffered severe damage from recent drone attacks, according to Reuters.
Further tightening supply sentiment, the operator of the Tengiz oilfield, TCO, declared force majeure on crude deliveries through the CPC pipeline system, citing operational challenges. Oil output at the two Kazakh fields could remain offline for an additional seven to ten days, Reuters reported earlier this week, referencing industry sources.
Gains in oil prices were capped by rising geopolitical uncertainty after U.S. President Donald Trump reiterated that there was “no going back” on his objective to gain control of Greenland. He also warned of escalating tariffs on European allies until the United States is permitted to purchase the Arctic territory.
These developments increased pressure on oil markets, as the threat of tariffs could weigh on global economic growth and fuel risk-averse sentiment, said Giovanni Staunovo, an analyst at UBS.
On the demand side, U.S. crude oil and gasoline inventories are expected to have risen by roughly 1.7 million barrels last week, while distillate stockpiles likely declined, according to a preliminary Reuters survey.
Weekly inventory figures from the American Petroleum Institute are scheduled for release at 4:30 p.m. EST on Wednesday, while official government data is due at 12:00 p.m. EST on Thursday. Both reports were delayed by one day due to the U.S. federal holiday on Monday.
