Crude Oil Prices Ease As Traders Digest Trump Tariff Impact, OPEC+ Boost

Crude oil prices declined by nearly 1% on Tuesday after President Donald Trump reignited trade tensions by slapping tariffs on 14 countries, including close allies like Japan and South Korea.

At the time of writing, U.S. West Texas Intermediate (WTI) crude futures were down nearly 1%, falling to $67.33 per barrel.

Brent crude futures declined 0.75%, falling to $69.07 per barrel.

Tuesday’s decline in crude oil prices comes on the heels of Trump slapping tariffs on a slew of countries even as the July 9 deadline is yet to pass. The Trump administration announced levies slightly below the “Liberation Day” tariffs – in Japan’s case, the new tariff rate is slightly higher than the one announced in April.

This resulted in a decline in investor sentiment as well, with the SPDR S&P 500 ETF (SPY) declining 0.10% at the time of writing.

Adding to the downward pressure on crude oil prices is the cooling down of tensions in the Middle East following a ceasefire between Iran and Israel, and the Organization of the Petroleum Exporting Countries (OPEC) announcing a higher-than-expected increase in production targets for August.

On Saturday, the OPEC+ group announced an increase of 548,000 barrels per day (bpd) in crude oil production for August, higher than the 411,000 bpd increase in May, June, and July.

However, attacks by Houthis in the Red Sea offered some support to crude oil prices, according to the analysts at ING.

“Further attacks could see an increase once again in vessels avoiding the Red Sea. Instead, they would take a longer route around the Cape of Good Hope,” the firm said in a recent note.

ING analysts expect the August output hike to hit the markets only later this year, citing that it is when there will be sustained downward pressure on crude prices. 

The United States Oil Fund LP (USO) fell 1.49%, while the ProShares Ultra Bloomberg Crude Oil (UCO) declined 3.13% at the time of writing. Stocktwits data shows retail sentiment around both the ETFs has been in the ‘bearish’ territory over the past week.

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