Oil prices remained close to a one-week high on Wednesday as concerns over supply disruptions in Russia and the United States persisted.
Meanwhile, markets awaited clarity on potential sanctions as Washington continues efforts to broker a peace deal to end the war in Ukraine.
Brent crude futures rose by 20 cents, or 0.3%, settling at $76.04 per barrel. U.S. West Texas Intermediate (WTI) crude gained 40 cents, or 0.6%, closing at $72.25 per barrel. Both benchmarks recorded their highest closing prices since February 11.
Market Focuses on Russia, Iran, and OPEC
“The market is trying to make up its mind on three bullish drivers: Russia, Iran, and OPEC,” said Aldo Spanjer, commodities strategist at BNP Paribas. “People are trying to figure out the impact of announced and actual sanctions.”
READ ALSO: Oil Prices Steady Amid Russia-Ukraine Peace Prospects and U.S. Tariff Uncertainty
Drone attacks on Russian oil infrastructure have led to reduced supplies. Russia reported that oil flows through the Caspian Pipeline Consortium (CPC)—a key export route from Kazakhstan—were cut by 30-40% following a Ukrainian drone strike on a pumping station. A 30% reduction would remove about 380,000 barrels per day from the market, according to Reuters calculations.
Russian President Vladimir Putin suggested the CPC attack might have been coordinated with Ukraine’s Western allies.
U.S. Weather and OPEC Supply Decisions Add to Uncertainty
In the U.S., severe cold weather in North Dakota is expected to impact oil production, with the state’s pipeline authority estimating a potential decline of up to 150,000 barrels per day.
Market analysts also speculate that OPEC and its allies, including Russia and Kazakhstan, might delay a planned supply increase scheduled for April. “There is growing speculation that OPEC+ could postpone its supply hike, adding more uncertainty to the market,” noted IG market analyst Tony Sycamore.
Geopolitical Factors and Global Demand Outlook
Adding to the complexity, U.S. President Donald Trump described Ukrainian President Volodymyr Zelenskiy as “a dictator without elections” and urged him to secure peace swiftly. While analysts at Goldman Sachs believe a U.S.-brokered peace deal could ease sanctions, they argue that Russian crude output remains constrained by its OPEC+ target rather than sanctions, which currently affect the destination of exports rather than their volume.
In the Middle East, Israel and Hamas are set to begin indirect negotiations on the next phase of a Gaza ceasefire deal. A successful agreement could ease fears of supply disruptions, potentially putting downward pressure on oil prices.
Macroeconomic Risks and Inventory Data in Focus
Concerns over global fuel demand persist, with fears that tariffs proposed by the Trump administration could dampen economic growth by raising consumer goods prices. Additionally, the Federal Reserve remains cautious about inflation risks, which could lead to prolonged higher interest rates, further slowing economic activity and oil demand.
Meanwhile, markets await U.S. oil inventory data. Reports from the American Petroleum Institute (API) are expected later on Wednesday, with the U.S. Energy Information Administration (EIA) releasing its figures on Thursday. Analysts forecast an increase of about 2.2 million barrels in U.S. crude stockpiles for the week ending February 14. If confirmed, this would mark the fourth consecutive week of rising crude inventories—the longest streak since April 2024.
