Oil prices declined in Asian markets on Tuesday as traders assessed that recent European sanctions on Russia would have minimal effect on global supply. Meanwhile, growing concerns over a potential trade dispute between the U.S. and the European Union also weighed on prices.
Despite the U.S. dollar weakening sharply and trimming some of its recent gains, crude futures saw little uplift. Brent crude for September delivery dropped 0.5% to $68.86 per barrel, while West Texas Intermediate futures fell 0.5% to $65.61 per barrel as of 21:15 ET (01:15 GMT).
Trade War Concerns Escalate
The oil market remains unsettled amid escalating tensions between Washington and Brussels regarding tariff policies. Reports indicate that the U.S. is pushing for tariffs of at least 15% on European imports, a demand that surprised EU negotiators and prompted threats of retaliatory duties on American products.
ANZ analysts cautioned that this stalemate could dampen economic growth and reduce oil demand, especially if the U.S. implements steep tariffs against the EU. Alongside EU-related tariffs, the U.S. plans to enforce significant duties on other key trading partners starting August 1, including a 25% tariff on Japanese goods, 35% on Canadian products, and 50% on imports from Brazil.
The high tariff rates have raised alarms over their potential to disrupt the global economy and, by extension, hurt crude oil consumption.
Sanctions on Russia Have Limited Influence
Meanwhile, recent European Union sanctions tightening restrictions on Russia’s oil sector failed to bolster prices significantly. Analysts from ANZ expressed skepticism that these measures would substantially curb Moscow’s oil exports.
The sanctions are part of ongoing efforts linked to the Russia-Ukraine conflict, which shows no signs of abating after more than three years. Although the war initially pushed oil prices to near-record levels, markets have since largely factored out the risk of supply disruptions caused by the conflict.
Nonetheless, the U.S. continues to maintain stringent sanctions targeting Russia’s oil industry.
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