Oil prices saw an uptick on Friday following U.S. President Donald Trump’s announcement of an impending statement concerning Russia, which stirred the possibility of additional sanctions against the significant oil producer. However, concerns regarding tariffs and increasing OPEC+ output limited the extent of these gains.
As of 04:08 GMT, Brent crude futures rose by 19 cents, or 0.28 percent, reaching $68.83 a barrel (currently trading at $68.74). Meanwhile, U.S. West Texas Intermediate crude increased by 24 cents, or 0.36 percent, to settle at $66.81 a barrel (currently trading at $66.72).
Throughout this week, Brent has observed a 0.8 percent increase, while WTI has seen a slight decline of 0.2 percent. Both contracts faced a loss exceeding 2 percent on Thursday, driven by investor concerns over the repercussions of Trump’s shifting tariff policies on global economic growth and oil demand.
“This morning, prices have recovered some of this decline after President Trump stated his intention to deliver a ‘major’ announcement regarding Russia on Monday. This announcement could create apprehension in the market over the potential for further sanctions on Russia,” reported Reuters, citing analysts from ING.
Anticipated market surplus
Trump has voiced his frustrations with Russian President Vladimir Putin due to the lack of progress towards peace in Ukraine and the escalating bombardment of Ukrainian cities by Russia.
Additionally, tight market fundamentals coupled with improving seasonal demand have provided some support to oil prices, as have the recent Houthi attacks on vessels traversing the Red Sea, as noted by BMI analysts in their weekly report.
A notable indicator of demand improvement is the expectation that Saudi Arabia will ship approximately 51 million barrels of crude oil to China in August, marking the largest shipment in over two years.
On the other hand, oil prices faced pressure this week from an agreement made on Saturday by the Organization of the Petroleum Exporting Countries and its allies, collectively known as OPEC+, to increase production by 548,000 barrels per day in August.
ING analysts suggested that there may be one additional increase in September before a pause occurs. These production increases are projected to push the global market into a significant surplus during the fourth quarter, further exacerbating downward pressure on prices, according to ING analysts.
Read more: Oil prices fall to $70.17 as Trump expands tariffs, triggering demand concerns
OPEC demand forecast revision
OPEC has revised its forecasts for global oil demand from 2026 to 2029, attributing the changes to a slowdown in Chinese demand, as outlined in its 2025 World Oil Outlook published on Thursday. The organization anticipates that global demand will average 106.3 million barrels per day in 2026, a decrease from the 108 million bpd estimated in last year’s forecast.
Oil prices declined on Thursday following U.S. President Donald Trump’s latest tariff announcements, which raised investor concerns about a potential deceleration in global economic growth and weaker oil demand. By 4:01 GMT, Brent crude futures had decreased by 0.03 percent to $70.17 a barrel, while U.S. West Texas Intermediate crude fell by 0.07 percent to $68.33 a barrel.
On Wednesday, Trump threatened Brazil, the largest economy in Latin America, with a steep 50 percent tariff on its exports to the U.S. following a public clash with Brazilian President Luiz Inacio Lula da Silva. This threat followed earlier proposals for tariffs on essential goods such as copper, semiconductors, and pharmaceuticals.
His administration has also issued tariff notifications to countries like the Philippines and Iraq, adding to over a dozen others communicated earlier in the week, including to major U.S. trading partners such as South Korea and Japan.
Rising crude stocks support prices
With growing apprehensions regarding the inflationary effects of these tariffs, minutes from the Federal Reserve’s June 17–18 meeting revealed that only “a couple” of policymakers backed the notion of cutting interest rates as soon as this month. Elevated interest rates tend to increase borrowing costs, which suppresses oil demand and prices.
Some support for oil prices has emerged as U.S. crude stocks increased while gasoline and distillate inventories declined last week, according to the Energy Information Administration. Gasoline demand surged by 6 percent to 9.2 million barrels per day last week, as reported by the EIA.
Global daily flights averaged 107,600 in the first eight days of July, reaching an all-time high, with flights in China hitting a five-month peak. Moreover, port and freight activities indicate a ‘sustained expansion’ in trade activities compared to last year, as noted by J.P. Morgan. Year to date, global oil demand growth averages 0.97 million barrels per day, aligning with the forecast of 1 million barrels per day, the note added.
