Oil prices climbed in tandem with broader equity markets after the US Court of International Trade ruled against a significant portion of President Donald Trump’s global tariff regime, a development that lifted market sentiment and triggered a partial rebound in commodity markets. Brent crude futures approached the $66 mark, extending a 1.3% gain from the previous session, as investors reassessed the economic outlook and demand trajectory for oil and industrial materials.
Highlights:
Brent crude neared $66 per barrel after a 1.3% gain, supported by improved risk sentiment.
US trade court ruling blocks major Trump-era tariffs, including elevated China duties.
Market optimism grows on potential easing of global trade tensions and stronger demand.
Trade Policy Uncertainty and Market Response
The decision by the US trade court, which deems Trump’s emergency-use tariffs illegal, is being appealed by the administration. These levies included key tariff measures against China, the world’s largest crude importer, and had been widely blamed for exacerbating global trade tensions, weakening economic activity, and suppressing oil demand. The ruling, by tempering expectations of escalating trade restrictions, temporarily lifted sentiment across risk assets, including crude futures.
Chris Weston, head of research at Pepperstone Group, noted that the ruling is interpreted as a near-term positive by markets. However, he emphasized that traders are not losing sight of fundamental supply-side risks, particularly from OPEC+ producers.
Highlights:
Trump administration to appeal the trade ruling; tariff tensions remain in flux.
Markets view the ruling as a short-term easing of trade risks.
Risk assets rally, including oil, as sentiment turns modestly bullish.
Geopolitical Disruptions Add to Supply Concerns
Adding to bullish pressures, Libya’s eastern government has threatened to halt oil production and exports in protest after a militia seized the headquarters of the state-run oil company. The standoff underscores the fragility of supply from politically unstable regions within the OPEC+ alliance and raises fresh concerns about global output stability.
This development compounds broader market anxiety over supply disruptions, especially ahead of the upcoming OPEC+ meeting scheduled for Saturday, where producers are expected to discuss output policy for July. There is growing market speculation that another significant increase in production could be announced, following previous rounds of revived capacity.
Highlights:
Libya’s eastern government threatens oil shutdown after militia attack.
Adds geopolitical volatility to supply outlook ahead of OPEC+ meeting.
OPEC+ likely to discuss a major supply hike for July output quotas.
Inventory Data Provides Further Support
In the US, the American Petroleum Institute (API) reported a 4.2 million barrel decline in crude inventories for the past week, according to data obtained by Bloomberg. The drop in stockpiles suggests stronger domestic demand or tightening supply conditions and is likely to be confirmed by official figures due later Thursday from the Energy Information Administration (EIA).
The combination of falling inventories and easing trade fears contributed to a bullish tone in the oil market despite underlying supply risks and the potential for increased OPEC+ production.
Highlights:
API data shows 4.2 million barrel drop in US crude stocks.
Signals tightening market conditions or rising demand.
Official EIA figures expected to confirm inventory drawdown.
Oil Gains as US Court Blocks Trump Tariffs
Crude oil prices rose alongside equity markets after a US trade court ruled that many of President Trump’s tariffs were illegal, easing investor concerns over global trade disruptions. Brent crude moved closer to $66 a barrel, lifted by improved sentiment and additional supply risks from Libya, where political tensions threaten production. The market now awaits the upcoming OPEC+ meeting amid expectations of further output increases. Although the ruling offers temporary relief, the Trump administration’s planned appeal keeps future policy uncertainty in play.
Impact on Indian Stock Market:
Positive Sentiment for Equities: Risk-on mood globally could support Indian stock indices, especially sectors linked to global trade.
Oil Import Cost Pressures: A rise in crude oil prices may pressure India’s current account deficit and fuel inflationary concerns.
Rupee Impact: Higher oil prices could weaken the rupee, raising import costs and affecting forex reserves.
OPEC+ Watch: Indian markets will closely monitor OPEC+ output decisions, which could further impact energy import bills and inflation outlook.
Focus Points for Investors:
Track crude oil price trends and upcoming OPEC+ decisions to assess inflation and fiscal risks.
Monitor global trade policy developments, especially the appeal process of the US tariff ruling.
Keep an eye on the rupee-dollar exchange rate for impacts on import-heavy sectors like energy, FMCG, and aviation.
Rebalance portfolios in sectors sensitive to oil and global demand, such as autos, paints, and logistics.
Use volatility in energy and commodity prices to reassess hedging strategies and inflation-sensitive asset classes.
