On Monday (April 1st), international oil prices significantly rose, with Brent crude oil futures rising $1.11, or 1.5%, to close at $74.74 per barrel; West Texas Intermediate (WTI) futures in the United States rose $2.12, or 3.1%, to close at $71.48.

This is the highest closing price of Brent crude oil since February 24th, while WTI has hit a new high since February 20th. Behind the rise in oil prices is the intensification of market concerns about supply disruptions, especially US President Trump's tough rhetoric against Russia and Iran.

Trump stated in an interview on Sunday that if Russian President Putin obstructs his efforts to end the conflict in Ukraine, he will impose a secondary tariff of 25% to 50% on Russian oil buyers. This threat has made the market uneasy about the supply prospects of Russia, the world's second-largest oil exporting country.

In addition, he also warned that if Iran fails to reach an agreement with the United States on its nuclear program, it will be subjected to bombing and similar tariff measures. Russia and Iran together account for a significant share of global crude oil supply, and any substantial sanctions or military action could trigger a supply crunch, driving oil prices further higher.

UBS analyst Giovanni Staunovo said, "Trump's threat of secondary tariffs on Russian and Iranian oil is a closely watched factor in the market, and although he has no immediate intention of implementing them, future supply risks are gradually increasing

The market reacted quickly, and on Monday, oil prices rose in response to Trump's remarks. However, traders have doubts about the credibility of the threat and believe that some of it may be a negotiation strategy rather than immediate action. Brent's premium on WTI fell to $3.02 per barrel, the lowest since July 2024, reflecting expectations of a decline in the economic viability of US crude oil exports.

Analysts point out that when the premium is below $4 per barrel, the cost-effectiveness of transporting US crude oil across oceans decreases, which may suppress US exports and further affect the global supply pattern.

At the same time, manufacturing activity in major Asian countries expanded at the fastest pace in a year in March, with factory surveys showing an increase in new orders driving production recovery. This positive news provides additional support for oil prices. As the world's largest crude oil importer, the signs of economic recovery in major Asian countries have eased some of the market's concerns about weak fuel demand.

Despite rising trade concerns, the expansion of the manufacturing industry indicates that its economy remains resilient under external pressures.

On the US side, crude oil production in January decreased by 305000 barrels per day to 13.15 million barrels per day, the lowest since February 2024, partially easing the pressure of oversupply. However, the upcoming weekly inventory data from the US API and EIA will become the focus of the market.

According to market research, analysts expect a decrease of approximately 2.1 million barrels in US crude oil inventories for the week ending March 28th. If the data confirms an improvement in demand, oil prices may receive further support; On the contrary, if inventory unexpectedly increases, it may trigger a pullback.

On a technical level, Brent crude oil broke through $73 and hit $74.74, indicating an increase in short-term bullish momentum, but there is significant resistance at the $75 level. If geopolitical risks continue to ferment, oil prices may test $76 or even higher levels.

In terms of WTI, the closing price of $71.48 is close to a five week high, with support at $70 below. The short-term trend is bullish, but caution should be exercised against the risk of a pullback. The RSI indicator has not yet entered the overbought range, indicating that there is still room for upward movement.

Trump's tough stance may push up the geopolitical risk premium, but its actual implementation is questionable. The OPEC+production increase plan and US inventory data may constrain the increase. In the short term, oil prices may fluctuate at a high level in the $70-76 range, and investors need to closely monitor the progress of geopolitical events and the release of key data.

Editor's viewpoint:

The recent rise in oil prices reflects the market's high sensitivity to supply uncertainty, but trade concerns and uncertain demand prospects still pose hidden concerns. Trump's threat has boosted the risk premium in the short term, but without substantial action to follow up, oil prices may fall due to profit taking.

While paying attention to inventory data in the United States, be alert to the risk of two-way fluctuations caused by sudden geopolitical changes.