Oil prices declined modestly during Tuesday’s Asian trading session as investors processed U.S. President Donald Trump’s 50-day warning for Russia to end the conflict in Ukraine, alongside the threat of sanctions on nations continuing to purchase Russian oil.
Traders also evaluated a wave of Chinese economic data released Tuesday, which included second-quarter GDP, industrial production, retail sales, and other significant metrics.
At 21:56 ET (01:56 GMT), September Brent crude futures slipped 0.2% to $69.06 per barrel, while West Texas Intermediate (WTI) futures dropped 0.3%, settling at $66.79 per barrel.
Oil initially rallied Monday following Trump’s announcement but closed nearly 2% lower after he held off on immediate tougher measures, offering a 50-day window.
Trump sets 50-day deadline for Russia to end Ukraine war
On Monday, Trump demanded that Russia reach a peace agreement within 50 days, warning of “secondary sanctions” against countries continuing to import Russian oil should Moscow fail to comply.
While this triggered an initial price surge, crude retreated as traders debated the timing and enforcement of these sanctions.
“The lack of any immediate action and the belief that these threats won’t be carried out help to explain the market reaction,” ING analysts commented in a note.
“However, if Trump does follow through, and the tariff is implemented effectively, it would drastically change the outlook for the oil market. Russia exports more than 7m b/d of crude oil and refined products,” they added.
The largest importers of Russian crude include China, India, and Turkey.
“OPEC’s spare production capacity would not be able to fill the entire shortfall. This would present significant upside to oil prices. Given Trump’s desire for low oil prices, we don’t believe Trump would be keen to follow through with this threat,” the analysts concluded.
Focus shifts to Trump tariffs and China’s GDP outperforming expectations
Last week, Trump announced plans to impose a 30% tariff on most imports from the EU and Mexico starting August 1.
In retaliation, reports on Monday indicated the EU has finalized a list of tariffs targeting $84 billion of U.S. goods, heightening trade tensions with Washington.
Earlier, Trump unveiled new tariffs on Japan, South Korea, Canada, and Brazil, plus a 50% tariff on copper, all set to take effect August 1.
Meanwhile, Monday’s data showed China’s economy grew by 5.2% year-on-year in Q2 2025, slightly surpassing forecasts of 5.1%, buoyed by strong exports and government stimulus.
Additional figures released Tuesday revealed factory output surged beyond expectations in June, while retail sales lagged behind forecasts.
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