Oil Prices Teeter Amid Recession Fears, Yet Secure Third Weekly Win

In a volatile dance of global economics, oil prices dipped on Friday as concerns mounted over a potential recession triggered by escalating U.S. tariff wars. Despite the late-week stumble, crude managed to notch its third consecutive weekly gain, buoyed by intensified U.S. pressure on OPEC heavyweights Venezuela and Iran. Brent crude futures slid 40 cents, or 0.5%, settling at $73.63 per barrel, while U.S. West Texas Intermediate (WTI) crude futures dropped 56 cents, or 0.8%, closing at $69.36 a barrel. For the week, however, Brent climbed 1.9%, and WTI rose 1.6%, reflecting a resilient rebound from multi-month lows earlier in March—Brent up over 7% and WTI rallying more than 6%.

The shadow of a trade war loomed large as President Donald Trump prepared to unveil reciprocal tariffs on a broad swath of imports, set to take effect on April 2. Analysts at JPMorgan warned clients that this, combined with heightened U.S. policy uncertainty, was souring market sentiment. While recession risks ticked higher, they noted that oil demand has so far held steady, offering a sliver of stability amid the storm. Mid-week data from the Energy Information Administration bolstered this view, revealing a surprising 3.3-million-barrel drop in U.S. crude inventories—far exceeding the expected draw of 956,000 barrels—bringing stocks to 433.6 million barrels.

The week’s real storyline, however, was the Trump administration’s aggressive stance toward Venezuela and Iran. New 25% tariffs aimed at buyers of Venezuelan crude, announced on Monday, followed fresh sanctions targeting China’s imports from Iran. Analysts at Barclays highlighted the mounting pressure on Venezuela’s regime, predicting a potential 200,000-barrel-per-day cut in its crude output this year. The ripple effects were immediate: trade with China stalled, and India’s Reliance Industries, operator of the world’s largest refining complex, signaled it would halt Venezuelan oil imports. Meanwhile, Trump’s pledge to choke Iran’s oil exports entirely—backed by four rounds of sanctions since his return to power—added further strain to global supply chains.

As markets recalibrate, the outlook for the second quarter is tightening. Analysts suggested that any reduction in Venezuelan or Iranian barrels could spark a bullish surge, especially as OPEC+ gears up to incrementally boost production starting in April, with plans likely extending into May. Caught between recession jitters and geopolitical chess moves, oil markets remain a high-stakes balancing act—one where every barrel counts.