Oil Prices Dip As Investor Concerns Grow About Trump’s Trade War

Oil prices fell on Tuesday as investors remained concerned about the worsening global economic outlook, driven by trade tensions and higher supplies.

Benchmark Brent crude prices were down 40 cents at $68.81 per barrel, while U.S. West Texas Intermediate crude prices fell by 0.7% at $65.51 per barrel at 2.15 a.m. ET.  

Uncertain U.S. tariff policy is raising doubts about improvement in consumer sentiment during the second half of the year. According to the July report by the International Energy Agency, oil demand is expected to grow by about 700,000 barrels per day in 2025, the slowest pace of growth since 2009.

According to a Reuters News report, Priyanka Sachdeva, senior market analyst at Phillip Nova, said, "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."

On Sunday, Commerce Secretary Howard Lutnick confirmed that Aug. 1 is the “hard deadline” before the reciprocal tariffs take effect. However, he added that countries could still negotiate with the U.S. to lower the tariffs, which have reached as high as 40% for some countries.

A rise in supply is also putting downward pressure on oil prices. Saudi Arabia’s oil exports rose to their highest level in three months in May. Retail sentiment on Stocktwits about the United States Oil Fund (USO) was in the ‘bearish’ territory.

According to the Reuters report, IG analyst Tony Sycamore stated that a weaker U.S. dollar has provided some support for crude, as buyers using foreign currencies are paying less for the contracts.

Investors are also assessing the impact of the planned U.S. tariffs on the buyers of Russian oil. In an interview with Fox News, U.S. Senator Lindsey Graham warned Brazil, India, and China against purchasing Russian crude, stating that U.S. tariffs could “crush their economies.”

Also See: Malaysia Reportedly Seeks 20% Tariff Cap From Trump — Still Haggling Over EVs, Foreign Ownership Demands

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