18 Mar 2025

WTI prices are rising, approaching $67.30 during the early Asian trading session on Tuesday. This increase is supported by geopolitical tensions and China's initiatives to enhance consumption. However, apprehensions regarding the effects of President Trump’s tariff policies may limit further gains for WTI.

West Texas Intermediate (WTI), the benchmark for U.S. crude oil, is currently trading around $67.30. The price continues to climb as the United States commits to ongoing military actions against the Houthis.

On Sunday, the Houthis reported launching an assault involving 18 ballistic and cruise missiles, along with drones, aimed at the USS Harry S Truman aircraft carrier and its escort vessels in the northern Red Sea. A military spokesperson for the Houthis stated that this attack was a response to U.S. airstrikes authorized by Trump against areas in Yemen controlled by the rebels, including the capital, Sanaa, and the Saada province, which borders Saudi Arabia.

President Trump declared on Monday that he would hold Iran accountable for any actions taken by the Houthi group, which it supports in Yemen. This statement coincides with the expansion of the largest military operation in the Middle East since Trump resumed office. The unrest in the Red Sea has led to increased costs for energy transportation and contributed to the rise in WTI prices, as oil and gas shipments are now required to take longer routes.

Additionally, a series of favorable economic indicators from China, along with a targeted plan from Chinese officials to stimulate domestic consumption, are bolstering WTI prices. On Sunday, China initiated special measures aimed at enhancing consumption and increasing incomes, which also include efforts to stabilize the stock and real estate markets. Retail sales in China rose by 4% in the first two months of this year, compared to a 3.7% increase in December.

Conversely, a bleak economic outlook due to an intensifying global trade conflict stemming from Trump’s protectionist trade policies may create some downward pressure on oil prices. The aggressive tariffs imposed by Trump on imports are anticipated to elevate costs for businesses, potentially impacting demand.