Oil prices dip as U.S.-EU trade war fears threaten fuel demand
Oil prices fell on Tuesday as concerns about a brewing trade war between the United States and the European Union heightened fears of weaker fuel demand due to slowing economic activity.
Brent crude futures dropped 28 cents, or 0.40%, to $68.93 a barrel at 0658 GMT, while U.S. West Texas Intermediate (WTI) crude declined 37 cents, or 0.55%, to $66.83. Both benchmarks settled slightly lower on Monday. The August WTI contract expires Tuesday, with the more active September contract down 29 cents, or 0.44%, at $65.66 a barrel, News.Az reports, citing Reuters.
“Broad demand concerns continue to simmer amid escalating global trade tensions, especially as markets eye the latest tariff threats between major economies and Trump’s potential announcements ahead of the August 1 deadline,” said Priyanka Sachdeva, senior market analyst at Phillip Nova.
The U.S. has threatened to impose a 30% tariff on EU imports on August 1 if trade negotiations fail, while EU diplomats say Brussels is exploring counter-measures. These developments, alongside fresh U.S. sanctions on Russian crude, have added uncertainty to oil markets.
Analyst Tony Sycamore of IG noted that oil prices have been pressured by trade war fears, despite support from a weaker U.S. dollar, which makes crude cheaper for buyers using other currencies.
Recent supply increases have eased previous market concerns, particularly after a June 24 ceasefire ended hostilities between Israel and Iran, reducing fears of supply disruptions. Major oil producers, including members of OPEC+, are gradually unwinding production cuts, adding more barrels to the market.
Data from the Joint Organizations Data Initiative on Monday revealed that Saudi Arabia’s crude exports in May rose to their highest level in three months, signaling stronger output from the world’s largest oil exporter.
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