Oil prices spiked sharply after a US trade court blocked former President Donald Trump’s global tariffs, ruling that the levies were illegally imposed. This decision has significantly eased tensions in global markets, particularly for commodities like oil that are highly sensitive to trade disruptions and geopolitical friction.

West Texas Intermediate (WTI) crude surged above $62 a barrel, following a 1.6% increase in the previous trading session. Meanwhile, Brent crude closed near the $65 mark, signalling renewed investor confidence and a potential shift in market sentiment that had been bearish for months.

Court Ruling Reverses Years of Trade Pressure

The US trade court’s ruling effectively invalidated one of the most controversial economic policies of the Trump administration—broad-based global tariffs that spurred retaliatory actions from other nations. These measures had destabilised international trade, leading to global economic uncertainty and affecting demand across various sectors, including energy.

While the ruling can still be appealed, the immediate market response suggests that traders are optimistic about the removal of a significant headwind that had weighed heavily on oil since mid-January.

Oil Market Gains Amid Tariff Reversal and Supply Constraints

Since early 2025, oil prices had been trending downward amid fears that escalating trade wars would curb global economic growth, thereby reducing energy demand. The latest decision by the US court removes some of that pressure, allowing oil prices to bounce back.

In parallel, OPEC+ (Organization of the Petroleum Exporting Countries and allies) is preparing to review and potentially increase oil output during an upcoming meeting scheduled for Saturday. Market watchers anticipate that the group may announce another significant supply hike, though it remains unclear whether the group will act decisively or take a more measured approach based on recent market developments.

US Crude Stockpiles Show a Notable Decline

Adding further support to rising prices, the American Petroleum Institute (API) reported a decline of 4.2 million barrels in US crude inventories last week. This was a bullish signal for traders already encouraged by the court ruling.

Official figures from the US Energy Information Administration (EIA) were expected later Thursday and, if confirmed, would reinforce expectations of a tightening supply outlook for oil in the near term.

OPEC+ to Reassess Output Strategy Amid Changing Global Dynamics

As prices trend upward and supply tightens, the upcoming OPEC+ meeting takes on increased significance. The group had previously agreed to raise production to counter falling prices, especially as some idled capacities were revived in the wake of softer demand caused by global trade disputes.

However, with a major legal decision now potentially restoring global trade confidence, some OPEC+ members might argue for a more cautious production increase, especially if oil demand begins to outpace supply amid improved economic prospects.

The Bigger Picture: Trade Policy and Energy Markets Are Closely Linked

The oil market reaction to the US court ruling highlights a critical fact: trade policy and energy markets are deeply interconnected. Tariffs not only increase the cost of goods but also impact broader economic activity, thereby affecting industrial demand for energy.

By ruling Trump’s global tariffs illegal, the US court may have opened the door for smoother international trade relations, which in turn could boost economic activity and raise global oil demand.

Legal Uncertainty Still Looms but Market Sentiment Shifts

While the court ruling is a major win for free trade advocates, its legal journey may not be over. The US government can appeal the decision, and it remains to be seen how the current administration will react.

Despite this, the oil market appears to be pricing in reduced geopolitical risk, and with crude stockpiles falling, traders are clearly preparing for higher demand and possibly higher prices in the near term.

Outlook: Crude Could See Further Gains If Market Sentiment Holds

If the current bullish momentum continues, oil could be headed for sustained short-term gains. Factors supporting this include:

• Improved global trade sentiment following the court’s ruling.

• Lower-than-expected US crude inventories, indicating a drawdown in supply.

• OPEC+ decisions that may lean toward moderate output increases rather than aggressive hikes.

All eyes will now be on OPEC+’s policy direction and whether it matches the market’s more optimistic tone following the US court’s intervention.

Conclusion

The US trade court's move to invalidate Trump’s global tariffs has brought a wave of optimism to energy markets. With oil prices rallying, and global stockpiles tightening, this could mark a turning point for crude traders who had been wary of prolonged economic sluggishness.

If OPEC+ balances its output policy prudently and global demand revives amid trade normalisation, the world may be entering a new phase of recovery for the oil sector—one less constrained by trade wars and more focused on balancing supply with resurging demand.

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