Oil Prices Rise on Red Sea Attacks, Lower US Production

Oil prices rose to their highest levels since June 23, driven by escalating attacks on shipping vessels in the Red Sea by Iran-backed Houthi militia, which raised concerns over potential prolonged disruptions to vital oil transit routes. Despite a surprising increase in U.S. crude stockpiles reported by the Energy Information Administration, geopolitical risks and strong summer fuel demand supported oil prices. U.S. President Donald Trump announced plans to impose a 50% tariff on copper imports and indicated forthcoming 200% tariffs on pharmaceuticals, which could impact related sectors and oil demand. The U.S. is also expected to produce less oil in 2025 than previously forecast, as lower prices have slowed domestic producer activity. Meanwhile, OPEC+ continues to increase production, but rising geopolitical tensions and supply uncertainties in the Middle East have limited downward pressure on prices. The market remains cautious amid ongoing trade negotiations and tariff delays extended to August 1, as key partners seek agreements to ease tensions.