Oil prices extended gains on Wednesday as heightened geopolitical tensions and sharp trade rhetoric from US President Donald Trump increased uncertainty and weighed on investor risk appetite.
International benchmark Brent crude traded at $63.65 per barrel at 9.36 a.m. local time (0636 GMT), up around 0.2% from the previous close of $63.50.
US benchmark West Texas Intermediate (WTI) was at $59.69 per barrel, up about 0.4% compared with $59.43 in the prior session.
Fresh US tariff threats layered onto existing geopolitical risks continued to influence price movements, as Trump’s tough stance on Greenland and retaliatory signals from European leaders heightened uncertainty and revived concerns over global energy supply security.
Over the weekend, US President Donald Trump declared that eight European nations will be subject to tariffs for their opposition to US plans to acquire Greenland, citing the conflict as a threat to global peace.
According to Trump, products imported from Denmark, Norway, Sweden, France, Germany, the UK, the Netherlands and Finland will be subject to a 10% duty beginning on Feb. 1, with the rate increasing to 25% on June 1 if no deal is in place.
Then, in response to news that French President Emmanuel Macron is reluctant to join his so-called Board of Peace for Gaza, Trump threatened to impose 200% tariffs on French wines and champagne.
- Investor attention turns to World Economic Forum
As geopolitical and trade tensions heightened risk perceptions in global markets, concerns over energy supply security prompted increased buying in the oil market.
Investor attention also turned to the World Economic Forum in Davos, Switzerland, where Trump is expected to deliver remarks that could influence markets, particularly on Greenland and trade policy. Trump has previously suggested that talks with Europe could eventually ease tensions, raising expectations that the forum may offer clues on the path forward.
Meanwhile, heightened risk aversion also boosted demand for safe havens, pushing gold prices to record highs, while US Treasury bonds faced selling pressure and the dollar index extended its decline. A weaker dollar makes dollar-denominated commodities such as oil more attractive to buyers using other currencies, providing further support for prices.
Beyond geopolitical and tariff tensions, markets were also focused on who would succeed current Federal Reserve (Fed) Chairman Jerome Powell, after US Treasury Secretary Scott Bessent said in Davos that Trump could announce his nominee for the post next week.
Expectations that the Fed will maintain a low-interest-rate policy, alongside forecasts of economic growth and stronger oil demand, continued to provide upward support for prices. Analysts say that a new Fed chair who continues Trump’s low-interest-rate stance could be welcomed by markets in the short term, but may raise concerns over the Fed’s independence in the medium to long term.
By Handan Kazanci
Anadolu Agency
energy@aa.com.tr