Oil prices moved higher on Wednesday after Israel targeted Hamas leadership in Qatar and U.S. President Donald Trump urged Europe to impose tariffs on buyers of Russian oil. However, a weak global market outlook limited stronger gains.
As of 06:20 GMT, Brent crude futures rose 61 cents, or 0.92%, to $67 per barrel, while U.S. West Texas Intermediate (WTI) gained 61 cents, or 0.97%, to $63.24 per barrel.
Analyst Kelvin Wong of OANDA said the latest rise was mainly due to an increase in geopolitical risk premiums following Israel’s unprecedented strike in Doha. He warned that concerns are growing about a possible short-term supply crunch if OPEC+ facilities are affected.
Prices had already risen 0.6% in the previous session after Israel confirmed the strike in Doha. Qatar’s prime minister warned that the attack could derail ongoing peace talks. Both oil benchmarks initially jumped nearly 2% after the news, but retreated when Washington reassured Doha that no further incidents would occur and since there was no immediate disruption to supply.
IG market analyst Tony Sycamore noted that crude oil’s muted reaction, along with doubts over Trump’s push for tougher sanctions on Russian oil exports, leaves the market vulnerable to downside risk. Trump has asked the European Union to impose 100% tariffs on China and India to pressure President Vladimir Putin. Both Asian countries are key buyers of Russian crude, which has helped Moscow weather sanctions since the Ukraine war began in 2022.
LSEG analysts said expanding tariffs to China could disrupt Russian exports and tighten supply, a bullish factor for oil. But uncertainty remains, as aggressive measures might clash with U.S. efforts to manage inflation and push the Federal Reserve toward interest rate cuts.
Markets expect the Fed to cut rates next week, which could boost economic growth and support oil demand. Still, the supply outlook remains bearish. The U.S. Energy Information Administration (EIA) warned that rising inventories and higher OPEC+ production will keep global crude prices under pressure in the coming months.
