Oil prices extend losses on uncertainty over Trump tariff impact

Oil prices declined in Asian trade on Thursday, extending losses as uncertainty grows over the potential impact of U.S. President Donald Trump's proposed tariffs and energy policies on global economic growth and energy demand.

Brent crude futures fell by 26 cents, or 0.3%, to $78.74 a barrel at 0427 GMT, while U.S. West Texas Intermediate (WTI) crude dropped 23 cents, or 0.3%, to $75.21. In the previous session, Brent settled at $79.00, marking a fifth consecutive day of losses, while WTI ended at $75.44, its fourth straight day of declines.

"Oil markets have given back some recent gains due to mixed drivers," said Priyanka Sachdeva, senior market analyst at Phillip Nova. "Key factors include expectations of increased U.S. production under President Trump's pro-drilling policies and easing geopolitical stress in Gaza, reducing fears of further supply disruptions from key producing regions."

Sachdeva noted that the broader economic implications of U.S. tariffs could further dampen global oil demand growth.

Trump has threatened to introduce new tariffs against Russia if it fails to negotiate an end to the war in Ukraine. He also warned of additional tariffs targeting the European Union, Canada, and Mexico, as well as a 10% punitive duty on China over fentanyl shipments allegedly originating there.

Earlier this week, Trump declared a national energy emergency, aiming to reduce environmental restrictions on energy infrastructure and expedite permits for new transmission and pipeline projects. However, some analysts remain skeptical about the near-term increase in oil production.

"Overall, Trump's policies are introducing volatility, and the market will closely watch how sanctions, drilling expansions, and trade policies evolve in shaping the global oil landscape," Sachdeva added.

On the U.S. oil inventory front, crude stocks rose by 958,000 barrels in the week ending January 17, according to sources citing American Petroleum Institute data. Gasoline inventories increased by 3.23 million barrels, while distillate stocks climbed by 1.88 million barrels.

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