Oil Prices Climb as U.S. Sanctions Iran, Trump Eases Fed Pressure

Oil prices extended gains in early Asian trading Wednesday following fresh U.S. sanctions on Iran and a larger-than-expected drop in U.S. crude inventories. Market sentiment was also lifted after President Donald Trump softened his stance on Federal Reserve Chair Jerome Powell and voiced optimism on trade relations with China.

Brent crude futures for June rose 1% to $68.12 per barrel, while West Texas Intermediate (WTI) crude climbed 1% to $63.58, building on Tuesday’s nearly 2% jump for both benchmarks.

The U.S. Treasury announced sanctions targeting Seyed Asadoollah Emamjomeh, a key figure in Iran’s liquefied petroleum gas (LPG) industry, and his affiliated companies. Officials accused him of exporting LPG, including from the U.S., to bypass sanctions and finance Iran’s activities in the Middle East. The move underscores Washington’s strategy to curb Tehran’s energy income amid ongoing nuclear negotiations. The next round of expert-level talks is set for Saturday in Oman.

Meanwhile, Trump scaled back his rhetoric against Fed Chair Powell, moving away from calls for dismissal and instead expressing confidence in the central bank. He also suggested trade discussions with China could result in reduced tariffs, though “not to zero,” signaling a less confrontational stance.

In addition, the American Petroleum Institute (API) reported a sharp 4.565 million-barrel draw in U.S. crude stockpiles for the week ending April 18, reversing the prior week’s 2.4 million-barrel build. The unexpected decline hints at tightening supply, possibly from increased refinery output or rising exports. Investors await confirmation from the Energy Information Administration (EIA) later today.

These developments collectively point to bullish momentum in the oil market, driven by geopolitical risks, shifting U.S. monetary policy tone, and improving trade sentiment.