Oil Prices Tumble as Tariff Concerns Possible Russia-U.S. Talks Shake Markets
Global crude oil prices declined on Friday, heading toward their sharpest weekly drop since late June, amid mounting concerns over the global economic outlook triggered by new U.S. tariffs and anticipation of potential diplomatic engagement between Donald Trump and Vladimir Putin.
In the early hours of Friday, Brent crude futures had fallen by 51 cents to trade at $65.92 per barrel, putting them on course for a weekly loss exceeding 4%. Similarly, U.S. West Texas Intermediate (WTI) slipped by 57 cents, or 0.89%, to $63.31 per barrel, with weekly losses nearing 6%.
The latest U.S. tariffs, which took effect on Thursday and target several major trade partners, sparked fears of a broader economic slowdown, which could dampen global oil demand.
In a note to investors, ANZ Bank analysts noted that these tariffs are especially concerning given the already underwhelming performance of the U.S. labour market, according to Reuters.
Meanwhile, Thursday’s Kremlin statement revealing plans for an upcoming meeting between Putin and Trump has increased speculation about a potential diplomatic breakthrough in the Ukraine conflict. Such a development could pave the way for the easing of sanctions on Russia, potentially allowing additional Russian oil to re-enter an already saturated market.
“Trump earlier this week had threatened to hike tariffs on India if it kept buying Russian oil, which the market viewed as putting further pressure on Russia to reach a deal with the U.S.,” said independent market analyst Tina Teng in a comment to Reuters.
In a further escalation, Trump stated on Wednesday that China, the largest importer of Russian crude, might also face tariffs similar to those imposed on Indian goods.
The oil market had already been under pressure following the recent OPEC+ decision to fully roll back its most substantial output cuts by September, months ahead of schedule. That move raised concerns about increased supply amid softening demand.
As of Thursday’s close, WTI had fallen for six consecutive trading sessions, marking the longest losing streak since December 2023. Should prices continue to decline through Friday’s session, it would represent the most extended series of losses since August 2021.
