Oil News: Can a Bullish Catalyst Offset Tariffs, OPEC+ Uncertainty, and Rising Supply?

Crude Oil Faces Bearish Pressures as Supply and Tariff Risks Weigh on Market

Crude oil ended February lower, marking its first monthly decline since November. The market is grappling with surging supply from Iraq, escalating U.S. trade tariffs, and uncertainty over OPEC+ production plans for April. With macroeconomic headwinds increasing, the bearish bias remains intact, though geopolitical risks could still inject volatility.

Iraq’s Oil Exports Add to Bearish Supply Outlook

Iraq has resumed crude exports from the Kurdistan region, adding fresh pressure to global supply balances. State oil marketer SOMO will ship 185,000 barrels per day (bpd), with expectations for further increases. However, major international oil firms operating in Kurdistan have yet to commit to exports, citing commercial uncertainties.

This move could complicate OPEC+’s efforts to manage supply. The group is still debating whether to raise output in April or extend production curbs. If Iraq continues increasing exports beyond its quota, it could weaken OPEC+ discipline and weigh further on prices.

U.S. Tariffs Cloud Demand Outlook

Traders are also adjusting positions in response to heightened tariff risks. U.S. President Donald Trump confirmed a 25% tariff on Mexican and Canadian goods and a 10% duty on Chinese imports starting March 4. These measures raise inflation concerns and could slow global demand, adding to crude oil’s bearish outlook.

“Market participants are scaling back risk exposure as they assess the broader impact of U.S. trade policy,” noted Ole Hansen, head of commodity strategy at Saxo Bank. While the full demand impact remains uncertain, investors are already pricing in downside risk.

OPEC+ Policy Uncertainty Keeps Markets on Edge

OPEC+ faces a critical decision in April as it weighs whether to increase production. The group is struggling to interpret shifting supply and demand trends, leading to speculation that it may delay scheduled output hikes to support prices.

Technically, crude remains range-bound, but OPEC+’s decision could spark a directional move. Seasonal factors, such as rising gasoline and diesel demand ahead of Easter, could provide some short-term relief. The market is facing weekly headwinds at $70.78 and $71.30. Support is $69.53. If this fails, prices could plunge over the near-term to $64.75.

Geopolitical Risks Offer Mixed Signals

Trump’s revocation of Chevron’s Venezuela license has temporarily boosted supply concerns, sparking a brief 2% rally. Additionally, discussions around U.S. Strategic Petroleum Reserve (SPR) purchases could offer a temporary floor for prices if the government moves to replenish reserves.

However, bearish pressures persist as traders watch for potential increases in Russian and Iranian exports. If geopolitical conditions stabilize, these flows could further weigh on the market.

Market Forecast: Bearish Bias with Volatility Risks

Crude oil remains under pressure as supply growth outpaces demand, with Iraq’s exports and U.S. tariffs adding to uncertainty. OPEC+’s April decision will be a key driver, determining whether production hikes exacerbate the oversupply.

For now, the market leans bearish, but volatility is likely. Traders should monitor OPEC+ signals, geopolitical shifts, and potential SPR purchases for any signs of support. Absent a strong bullish catalyst, crude could remain under selling pressure in the near term.

More Information in our Economic Calendar.