Crude Oil Week Ahead: Oil is Caught Between Tariffs and Geopolitical Risks

Key Events to Watch:

• The upcoming April tariff plan and its potential impact on global economic growth
• Geopolitical risks: oil supply route disruptions, sanctions, and threats to energy infrastructure
• Key economic data releases: China’s PMIs, U.S. ISM PMIs, and Nonfarm Payrolls (NFP)

Tariffs and Oil Demand Potential

U.S. consumer confidence hit a four-year low in March 2025, as trade war fears dominated headlines. This has kept the U.S. Dollar, equity indices, and crude oil on a cautious bullish path. With Liberation Day set for April 2nd—when a detailed tariff plan is expected—markets remain uneasy.

The Dow and S&P 500 are struggling to break resistance, while gold has soared past $3,080/oz, reflecting risk-off sentiment and keeping oil’s outlook under pressure. Still, geopolitical tensions are providing short-term support to oil prices, with upside risks that may prove temporary unless conflict escalates further.

Geopolitical Developments Driving Supply Concerns

• Middle East Tensions: Red Sea oil trade routes remain vulnerable as Iran-backed Houthi forces in Yemen escalate attacks on Israel in retaliation for Israeli strikes on Gaza. The U.S. has responded by targeting Houthi forces in Yemen, further increasing the risk of supply disruption in a critical energy corridor.
• Russia–Ukraine Conflict: Energy infrastructure remains at risk in the ongoing Russia–Ukraine war. A recent attack targeted a key gas station in Sudzha, raising alarms over potential wider-scale energy disruptions. The minerals deal between US and Ukraine remains unresolved.
• Sanctions on Iran and Venezuela: Tensions between the U.S. and Iran over nuclear energy talks have led to a complete oil sanction from the U.S. against Iran, and a 25% tariff imposed on Venezuelan oil exports. These sanctions are adding further strain to global oil supply.
• U.S.–EU Dispute Over Greenland: A surprising geopolitical flashpoint has emerged between the U.S. and EU, with Washington reportedly aiming to take control of Greenland for strategic security purposes. EU resistance has heightened concerns of diplomatic strain, further adding instability to global markets.

Economic Data and Oil Demand Potential

While demand and supply risks dominate headlines, economic indicators will determine the real impact of tariffs on global oil demand. Monday brings China’s PMIs, followed by U.S. ISM PMIs on Tuesday and Thursday, and U.S. NFP data on Friday.

If these figures indicate slowing growth, oil process may weaken further.

Technical Analysis: Quantifying Uncertainties

Crude Oil Forecast: 3-Day Time Frame – Log Scale

Source: Tradingview

Oil’s current rebound remains capped below the $70 barrier amid tariff uncertainty. A decisive close above $70.30 could trigger further gains toward $71.60, $73.40, and $75.60—levels aligning with the upper boundary of the downtrend channel in place since the 2022 highs. On the downside, failure to hold $70 opens the door to retests of support at $68 and $66. A break below $66 puts the spotlight on $63.80, with further downside risks toward new 4-year lows near $60 and $55.

Written by Razan Hilal, CMT

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