Global oil prices declined on Tuesday following U.S. President Donald Trump’s announcement of a 50-day deadline for Russia to end its war in Ukraine, a move that reduced immediate concerns about disruptions in crude supply due to potential sanctions.
Brent crude futures slipped by 29 cents, or 0.4%, to $68.92 per barrel by 0342 GMT. Meanwhile, U.S. West Texas Intermediate (WTI) crude futures dropped 35 cents, or 0.5%, to $66.63. Both benchmarks had already fallen over $1 in the previous trading session.
According to Priyanka Sachdeva, senior market analyst at Phillip Nova, “Trump’s softer stance on sanctioning Russian oil has eased fears of an imminent supply shortage, even as his broader tariff agenda continues to add pressure on global economic growth.”
Oil prices had initially surged amid speculation of imminent U.S. sanctions on Russian oil exports. However, sentiment reversed after Trump’s extended deadline signaled that immediate sanctions could be avoided, prompting traders to reconsider whether the U.S. would follow through with harsh penalties on countries maintaining energy ties with Russia.
Analysts at ING noted that if sanctions were ultimately enforced, it could significantly shift the global oil outlook. “China, India, and Turkey — the top buyers of Russian crude — would need to weigh the advantage of discounted oil against the risk of retaliatory U.S. tariffs on their exports,” the ING report stated.
Trump also announced additional military aid for Ukraine on Monday. Over the weekend, he warned of a 30% tariff on most imports from the European Union and Mexico, effective August 1 — part of a broader tariff strategy that includes similar threats to other nations. Economists warn such measures could dampen global economic activity and reduce fuel demand, placing further downward pressure on oil prices.
Despite current fluctuations, the Organization of Petroleum Exporting Countries (OPEC) expects oil demand to remain “very strong” through the third quarter, keeping global markets relatively tight, according to a Russian media report citing OPEC’s secretary general.
In contrast, Goldman Sachs revised its oil price forecast upward for the second half of 2025, citing possible supply disruptions, declining inventories in OECD countries, and production limitations in Russia.
