Oil prices saw a decline on Tuesday following U.S. President Donald Trump’s extensive 50-day deadline for Russia to conclude the Ukraine war and avoid sanctions, which alleviated immediate supply concerns.Â
Brent crude futures fell 29 cents, or 0.4 percent, to $68.92 a barrel by 03:42 GMT, while U.S. West Texas Intermediate crude futures dropped 35 cents, or 0.5 percent, to $66.63. Both contracts had settled more than $1 lower in the previous session.
Initially, oil prices had risen due to the news of potential sanctions but later surrendered these gains as the 50-day deadline raised optimism that sanctions might be averted. Traders are now contemplating whether the U.S. will actually impose steep tariffs on countries that continue to trade with Russia.Â
On Monday, Trump announced new weapon supplies for Ukraine and stated on Saturday that he would impose a 30 percent tariff on most imports from the European Union and Mexico starting August 1, adding to similar warnings for other countries. Tariffs could hinder economic growth, which might dampen global fuel demand and push oil prices lower.
In other news, oil demand is expected to remain “very strong” through the third quarter, keeping the market nicely balanced in the near term, according to the Secretary General of the Organization of Petroleum Exporting Countries, as reported by Reuters citing a Russian media outlet.
Read more: Crude oil prices rise above $70.5 as investors watch U.S. sanctions, OPEC+ output
Goldman Sachs adjusts oil price outlook for 2025
Goldman Sachs raised its oil price outlook for the second half of 2025 on Monday, attributing this adjustment to potential supply disruptions, dwindling oil inventories in Organization for Economic Co-operation and Development countries, and production constraints in Russia.
Last week, Trump indicated he would make a “major statement” regarding Russia on Monday, expressing his frustration with Russian President Vladimir Putin due to the lack of progress in resolving the Ukraine conflict.
According to industry sources and Reuters calculations, Russia’s seaborne oil product exports in June dropped 3.4 percent from May, totaling 8.98 million metric tons.
A bipartisan U.S. bill aiming to impose sanctions on Russia gained traction last week in Congress. Meanwhile, European Union envoys are nearing an agreement on an 18th package of sanctions against Russia, which would include a lower oil price cap.
Investors are also closely monitoring the outcome of U.S. tariff discussions with key trading partners. The European Union and South Korea announced on Monday that they are working on trade agreements with the U.S. to mitigate the impact of impending tariffs, as Washington threatens to impose significant duties starting August 1.
EU member states have deemed Trump’s tariff threat “absolutely unacceptable,” according to Danish Foreign Minister Lars Lokke Rasmussen during a joint press conference with the EU’s Trade Chief Maros Sefcovic in Brussels.
The International Energy Agency indicated last week that the global oil market may be tighter than it appears in the short term. However, the agency has raised its forecast for supply growth this year while lowering its outlook for demand growth, suggesting a market in surplus.
