Oil surged 3% amid geopolitical tensions and trade optimism

Global crude oil prices surged by approximately 3% on Wednesday, 02 July 2025, as escalating geopolitical risks and improving trade sentiment overshadowed a surprise rise in US crude inventories.

Brent settled $2.00 higher at $69.11 a barrel, gaining 3%.

WTI climbed $2.00, or 3.1%, to close at $67.45 a barrel. 

The sharp uptick came after Iran abruptly suspended its cooperation with the United Nations' nuclear watchdog—a move that rekindled concerns over regional stability in the Middle East and potential disruptions to global oil supply. Investors reacted swiftly, pricing in a risk premium.

Adding to the bullish tone, news broke that the United States and Vietnam had reached a new trade agreement. The deal marks the third of its kind following earlier accords with the UK and China, fuelling cautious optimism that Washington may finalise more trade deals before the looming 9 July deadline.

However, gains were partially tempered by the EIA data showing a surprise crude inventory build of 3.85 million barrels last week—the largest increase in three months. The unexpected rise in stockpiles suggested a softening in domestic demand, briefly capping further price advances.

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