Rising Oil Prices Attributed to Trump's Policies
In recent weeks, the global oil market has seen a surge in prices, driven by a combination of factors including trade negotiations, oil inventories, and geopolitical tensions.
Optimism surrounding U.S. trade negotiations, particularly with India, Brazil, and Mexico, has played a significant role in this upward trend. Indian Commerce Minister Piyush Goyal expressed optimism about reaching an agreement with the U.S. ahead of the August 1 deadline, which has boosted market sentiment and contributed to the rise in crude prices (West Texas Intermediate above $66/barrel, Brent around $69/barrel) as of late July 2025.
Despite OPEC+ gradually increasing production quotas, actual supply remains tight. Chinese crude inventories rose significantly—by 82 million barrels in Q2 2025—as China appears to be stockpiling strategically, likely driven by geopolitical concerns and trade uncertainties. This strategic stockpiling, along with ongoing voluntary cuts, capacity limits, and compensation for past overproduction, has contributed to a tight oil market.
Recent drone attacks on oilfields in northern Iraq have further constrained production in some OPEC+ member countries, resulting in supply shortfalls relative to quotas and contributing to market tightness. The complex balance of production adjustments among OPEC+ members indicates ongoing challenges managing supply amid geopolitical risks.
The International Energy Agency forecasts world oil demand growth at about 700,000 barrels per day for 2025, the lowest since 2009 aside from the COVID-19 impact year, indicating a subdued demand increase. Meanwhile, market data through June shows temporary tightening in May, but a slight easing in July prices and backwardated prompt timespreads signal continuing spot market tightness with some volatility due to commercial shipping and trade war impacts on U.S. demand.
Hiroyuki Kikukawa, chief strategist at Nissan Securities Investment, predicts that the WTI oil price will likely remain in the range of $60 to $70 per barrel. This optimism is driven by the progress in U.S. talks with key trading partners, strategic stockpiling, constrained OPEC+ supply growth, and geopolitical risks such as attacks in Iraq.
Notably, the U.S. has reached a trade agreement with Japan, effectively halting exports from Kazakhstan through a consortium that is partially owned by major U.S. energy companies. This decision, combined with the temporary ban on foreign oil tankers from loading in Russia's main Black Sea ports, has further supported the rise in oil prices. U.S. oil inventories also fell by 3.2 million barrels to 419 million barrels last week, further strengthening the market.
In summary, oil prices are supported by optimistic U.S. trade talks, strategic stockpiling (notably by China), constrained OPEC+ supply growth, and geopolitical risks such as attacks in Iraq. The market remains sensitive to upcoming decisions by OPEC+ in August and trade negotiations in early August 2025.
Finance experts predict that the optimism surrounding U.S. trade negotiations, particularly with India, Brazil, and Mexico, will lead to an increased demand for energy in the industry. Moreover, the strategic stockpiling of oil, especially by China, has further tightened the market in the oil-and-gas sector, potentially pushing oil prices higher due to the reduced supply.
