Oil prices rise on Red Sea attacks, lower US output
New York
Oil prices rose due to attacks in the Red Sea and lower US production, with Brent crude reaching $70.63 per barrel and WTI climbing to $68.84per barrel
US President Trump announced a 50 percent tariff on copper imports, aiming to boost domestic production, while OPEC+ is preparing for a significant production boost in September
Despite concerns about tariffs affecting oil demand, strong travel activity during the US Fourth of July holiday supported consumption, with a likely increase of 7.1 million barrels in US crude stockpiles
Oil prices rose on Wednesday, maintaining their highest levels since June 23, supported by attacks on ships in the Red Sea, alongside concerns over sharp US tariffs on copper and expectations of reduced oil production in the United States.
Brent crude futures rose by 48 cents, or 0.7 percent, to $70.63 per barrel by 08:55 GMT, while US West Texas Intermediate crude climbed by 51 cents, or 0.8 percent, to $68.84 per barrel. After months of calm in the Red Sea, attacks resumed last week in this vital global shipping route. Sources indicated that the Iran-backed Houthi militia in Yemen was behind the latest incidents.
A rescue operation is currently underway for the crew of a cargo ship that sank in the Red Sea following an attack that killed at least four crew members. The Houthis have not yet claimed responsibility for the strike.
Oil prices were also supported by a report from the US Energy Information Administration released Tuesday, which projected lower oil output in 2025 compared to earlier forecasts, citing slower activity among American producers due to falling prices.
On Tuesday, US President Donald Trump said he would announce a 50 percent tariff on copper imports, aiming to boost domestic production of the metal — vital for electric vehicles, military equipment, power grids, and a range of consumer goods.
This announcement came as Trump postponed some tariff deadlines to August 1, offering key trading partners hope that deals could be reached to ease the tariffs, though many companies remain uncertain about the future direction.
Despite concerns that tariffs may curb oil demand, strong travel activity during the US Fourth of July holiday supported consumption, and data suggested a likely increase of 7.1 million barrels in US crude stockpiles.
In a research note, oil brokerage PVM said: 'With attacks in the Red Sea and increased summer fuel consumption in the U.S., expectations of a future supply glut should take a back seat to short-term realities.'
Official US crude inventory data from the Energy Information Administration is due at 14:30 GMT.
Meanwhile, OPEC+ oil producers are preparing for another significant production boost in September as they continue to unwind voluntary supply cuts previously agreed upon by eight member states. The UAE is also transitioning to a higher production quota, according to five informed sources.
This follows the group's Saturday announcement of a supply increase of 548,000 barrels per day for August.
Suvro Sarkar, head of the energy sector team at DBS Bank, said: 'Oil prices have shown surprising resilience in the face of accelerating supply increases from OPEC+.'
UAE Energy Minister Suhail Al Mazrouei said Wednesday that oil markets are absorbing OPEC+ supply hikes without stockpile build-ups, indicating that markets are 'thirsty' for more oil.
'You can see that even with the continuous increases over several months, we haven't seen significant stockpile accumulation — meaning the market genuinely needed these volumes,' Mazrouei added.
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