Oil Prices Decline After Trump’s 50-Day Deadline For Russia To End Ukraine War Alleviates Supply Fears

Oil prices scaled back on Tuesday after U.S. President Donald Trump gave Russia 50 days to negotiate a peace deal with Ukraine to avoid fresh sanctions, easing concerns about an immediate supply shock.

Benchmark prices initially gained after Trump announced 100% tariffs on any country that buys Russian oil, but delayed the enforcement of the tariffs for 50 days. Immediate enforcement of the tariffs would have caused a supply shock, especially for buyers of Russian oil, including India and China.

Brent crude prices slipped 0.5% at $68.84 per barrel, while U.S. West Texas Intermediate crude prices fell 0.8% at $66.48 per barrel at 8.24 a.m. GMT. Botch contracts had dropped over $1 in the previous session.

During a meeting with NATO Secretary General Mark Rutte at the Oval Office on Monday, Trump said he would begin sending weapons to Ukraine, and the NATO allies will pay for it. This, along with the secondary tariffs, marks a reversal by Trump, who has grown frustrated about the rising death toll in Ukraine and Moscow’s reluctance to come to the negotiating table.

“We’re going to be doing very severe tariffs if we don’t have a deal in 50 days, tariffs at about 100%,” Trump said. Reuters reported, citing a White House official, that these will be secondary tariffs —a tactic the Trump administration has used against buyers of Venezuelan oil.

Separately, a bipartisan Senate bill is being developed, which could impose tariffs of up to 500% on buyers of Russian crude.

Retail sentiment on Stocktwits about the United States Oil Fund (USO) lingered in the ‘bearish’ territory on Tuesday.

During the entirety of the War in Ukraine, which began in 2022, the U.S. and its Western allies have severed ties with Russian businesses but stopped short of stopping Moscow from selling its oil elsewhere in the world to alleviate concerns about supplies.

ING analysts reportedly said that if Trump decides to implement proposed sanctions, "it would drastically change the outlook for the oil market.”

The United States Oil Fund has fallen 1.6% this year, compared with 6% gains in the SPDR S&P 500 ETF.

Also See: Los Angeles Port Logs Busiest June In History Amid Easing US-China Trade Tensions

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