Global oil prices took another hit as growing concerns over US import tariffs, increased OPEC+ production, and economic uncertainty weighed on investor sentiment. Brent crude fell to $70.30 per barrel, while West Texas Intermediate (WTI) slipped to $66.96, marking another turbulent week for the oil market. The ongoing decline, now stretching into multiple consecutive weeks, reflects deep-rooted anxieties about demand, geopolitical risks, and shifting energy policies.
The sharp drop in crude prices follows mounting fears that US trade policies could slow global economic growth and weaken fuel demand. The recent decision by the Biden administration to impose, then delay, tariffs on key oil suppliers such as Canada and Mexico has sent shockwaves through the market. Simultaneously, escalating trade tensions between the US and China have further complicated the outlook. China retaliated with counter-tariffs on US and Canadian agricultural products, amplifying concerns about a broader economic downturn that could hit energy consumption. Analysts warn that the uncertainty surrounding tariffs is a significant factor driving oil price volatility, with ING experts highlighting that market sentiment remains fragile.
Meanwhile, the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, have signaled an increase in oil output, adding more pressure on prices. According to data from the OPEC secretariat, the group’s basket price of twelve crude oils stood at $75.16 per barrel, slightly up from the previous day’s $74.98. However, traders remain wary as rising production levels could lead to an oversupply in the market, further dampening prices. The decision by OPEC+ to expand production has raised concerns about how the group will balance global supply and demand in the face of economic slowdowns in major economies.
Investors are also closely watching developments regarding potential adjustments to US sanctions on Russia. Washington has hinted at possible sanctions relief on Russia’s energy sector if Moscow agrees to a ceasefire with Ukraine. This uncertainty has contributed to the downward pressure on oil prices, with traders attempting to price in the potential implications of eased restrictions on Russian crude exports. However, the Biden administration has also suggested that additional sanctions could be imposed on Moscow if diplomatic efforts fail, adding another layer of unpredictability to the market.
The decline in oil prices has been particularly severe for WTI, which is now facing its longest losing streak since November 2023. Market analysts warn that while crude prices may find short-term support around the $65 to $62 range, the broader outlook remains uncertain. Some traders, like IG analyst Tony Sycamore, believe that much of the bearish sentiment is already priced in, and a rebound toward $72 per barrel is possible if geopolitical tensions ease and demand stabilizes. However, this hinges on several critical factors, including the resolution of tariff disputes, OPEC’s next policy moves, and the trajectory of US economic growth.
Oil markets briefly found some relief on Friday when former US President Donald Trump indicated that Washington would tighten sanctions on Russia if Moscow fails to negotiate a ceasefire with Ukraine. This statement helped crude claw back some of its losses, but it remains to be seen whether US policy will lean toward increased restrictions or a diplomatic resolution that could lead to a greater flow of Russian oil into global markets.
As the energy sector navigates an increasingly complex landscape, traders, investors, and policymakers will be watching closely for any shifts in production strategy from OPEC+, potential changes in US trade policies, and updates on geopolitical tensions. With crude prices already on a downward trajectory, the coming weeks will be crucial in determining whether the market stabilizes or continues its decline.
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