Oil prices declined on Tuesday as U.S. President Donald Trump’s 50-day ultimatum to Russia to end the war in Ukraine calmed immediate concerns over supply disruptions. This softer stance tempered investor fears and led to a moderate pullback in prices.
By 0342 GMT:
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Brent crude futures fell 29 cents (0.4%) to $68.92 per barrel
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U.S. West Texas Intermediate (WTI) crude futures dropped 35 cents (0.5%) to $66.63
Both benchmarks had already shed over $1 in the previous trading session.
Analyst Insight:
“Trump’s milder stance on sanctions over Russian oil eased fears of a supply crunch while his tariff plan continues to mount economic pressures,”
— Priyanka Sachdeva, Senior Market Analyst at Phillip Nova
Sanctions or Strategy?
Although prices initially climbed on the prospect of new U.S. sanctions on Russia, they later fell as the 50-day window gave traders hope that negotiations could avert an immediate supply shock.
However, analysts warn that if sanctions are actually enforced, it could significantly impact global oil flows.
“If Trump follows through, the oil market outlook could change drastically,” noted ING analysts.
They highlighted that China, India, and Turkey, key buyers of Russian oil, would face a difficult choice between cheap oil and risking U.S. export access.
Tariff Tensions and Fuel Demand:
Trump’s announcement of a 30% tariff on EU and Mexican imports, effective August 1, has intensified global trade tensions. Such tariffs may dampen economic growth, further weighing on fuel demand and pressuring crude prices.
Meanwhile, the U.S. President also announced new arms support for Ukraine, suggesting geopolitical tensions remain a major variable for energy markets.
Broader Market Factors:
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OPEC View:
According to a Russian media report, OPEC’s Secretary General expects “very strong” oil demand to persist through Q3 2025, keeping the market tight and balanced in the near term. -
Goldman Sachs Outlook:
The investment bank raised its oil price forecast for H2 2025, citing:-
Shrinking OECD inventories
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Ongoing production caps in Russia
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Risk of supply disruptions
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Market Outlook:
While the short-term oil price dip reflects relief from immediate supply risks, medium- to long-term volatility remains high due to:
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Geopolitical uncertainty
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Trade policy escalation
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Potential sanctions
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OPEC+ production discipline
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Inventory drawdowns
Investors and traders are now closely watching:
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Russia’s response to Trump’s deadline
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U.S. inflation data and economic indicators
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Further tariff developments and global trade talks