Oil prices fell in volatile trading Thursday as President Donald Trump renewed his pledge to boost U.S. crude production in an effort to lower prices, raising concerns about oversupply. The market, however, found some support from fresh U.S. sanctions on Iranian crude exports, aimed at cutting off Tehran's oil revenues.
Brent crude futures slipped 23 cents, or 0.3%, to $74.38 a barrel by midday trading in New York, while West Texas Intermediate crude dropped 31 cents, or 0.4%, to $70.72. Prices, which have tumbled nearly 10% since mid-January, have fluctuated sharply as traders react to shifting U.S. energy and trade policies.
Trump, speaking Thursday, reiterated a campaign promise to ramp up domestic oil output, declaring, the country will produce more oil than anyone has ever seen before. The president has frequently cited lower energy prices as a key element of his economic plan, linking them to reducing inflation and cutting costs for American consumers.
Oil initially rebounded during the session after the U.S. Treasury Department imposed new sanctions on entities facilitating Iranian crude shipments to China. The measures, which target individuals and firms across multiple jurisdictions, are part of the administration's broader efforts to bring Iran's oil exports to zero. "The notice is out-if you're a refiner or shipper moving Iranian oil, any part of it, you're at risk of getting whacked by the Treasury," said Price Futures Group analyst Phil Flynn. "Dealing with Iranian oil will be like Superman dealing with Kryptonite."
The latest round of sanctions adds to the growing tension between Washington and Tehran, as the administration seeks to curb Iran's nuclear ambitions by limiting its primary revenue source. Analysts say that while these restrictions could tighten global supply in the short term, the broader impact depends on enforcement levels. Iran has been able to boost its crude exports by roughly 1 million barrels per day in recent years due to lax enforcement under the previous administration.
At the same time, skepticism remains over whether Trump's push to increase domestic production will lead to a meaningful rise in supply. Many U.S. oil producers have prioritized capital discipline and shareholder returns over aggressive drilling, making it unclear whether production will rise enough to offset price concerns. "We remain strongly of the view that President Trump could ultimately prove to be a bearish influence on the oil market," Citigroup analysts, including Francesco Martoccia, wrote in a research note.
The oil market has experienced extreme price swings since Trump took office last month, with crude futures reacting sharply to his trade policies and tariff threats. His statements have historically moved oil prices by several dollars per barrel, a trend that appears to be continuing. Traders, facing increased volatility, have pulled back from crude and fuel markets, further pressuring prices.
Physical market indicators suggest additional weakness. The premium for Brent crude's immediate delivery over the following month's contract has shrunk to its lowest level this year, falling below 50 cents a barrel from about $1 at the end of last month. Meanwhile, a larger-than-expected buildup in U.S. crude and gasoline stockpiles, reported Wednesday, signaled softening demand.
Oil received some support from Saudi Aramco's decision to raise its March crude prices for Asian buyers. However, concerns about U.S.-China trade tensions, including potential tariffs on energy products, continue to weigh on sentiment.
