Oil prices held steady in early Asian trading on Tuesday, consolidating strong gains from the previous session. The rally was fueled by growing supply concerns after U.S. President Donald Trump shortened the timeline for Russia to act toward ending the conflict in Ukraine.
Crude markets also found support from recent progress in U.S. trade negotiations, particularly ahead of the August 1 tariff deadline. On Sunday, the European Union signed a framework agreement with the U.S., easing fears of escalating tariffs and boosting the demand outlook for energy.
As of 21:53 ET (01:53 GMT), September Brent crude futures inched up 0.1% to $70.09 per barrel. U.S. West Texas Intermediate (WTI) crude was unchanged at $66.74 a barrel.
Monday’s session saw both benchmarks surge over 2% following Trump’s announcement concerning Russia, with supply risks dominating market sentiment.
Trump’s Deadline for Russia Raises Geopolitical Stakes
The geopolitical landscape grew more uncertain after President Trump demanded Russia make visible progress toward ending the war in Ukraine within the next 10 to 12 days.
He also warned of harsh consequences, including new sanctions, should Russia fail to meet the deadline — a move that heightened concerns about potential disruptions to Russian crude exports and tightened global supply forecasts.
“No deal could see Russia facing tougher US sanctions, along with the US imposing secondary tariffs of 100% on trading partners that import Russian oil,” ING analysts said in a note.
“If imposed and enforced strictly, it would cause a significant shift in the oil outlook,” analysts wrote, pointing to increased Russian crude imports by India, China, and Turkey since the onset of the conflict. They noted that these nations may now need to balance the benefit of discounted oil against the risk of steep U.S. tariffs.
Focus on Trade Progress, OPEC+, and the Fed
Traders also digested the implications of Sunday’s U.S.–EU agreement, which lowered tariffs on most European exports to the U.S. from a planned 30% to 15%. The deal includes a pledge from the EU to purchase $750 billion in American energy products over the next few years.
Analysts noted that reduced trade friction combined with long-term demand commitments boosted market confidence and helped keep oil prices elevated.
On the production front, attention turned to OPEC+, where a technical committee urged members to fully adhere to output quotas. The cartel is scheduled to meet on August 3 and may consider raising production targets for September.
Despite the optimistic tone, traders remained cautious ahead of a batch of critical U.S. economic reports and the Federal Reserve’s policy decision. The central bank is expected to keep interest rates unchanged in the 4.25% to 4.50% range when it concludes its two-day meeting that starts Tuesday.
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