Oil fell for the third time in four days as investors focused on the impact from a wave of US trade levies and a decision by OPEC+ to restore more of the group’s idled capacity.
Global benchmark Brent dropped toward $69 a barrel, while West Texas Intermediate was below $68. US President Donald Trump unveiled the first in a wave of promised letters that threaten to impose higher tariff rates on key trading partners, while suggesting that he was still open to negotiations. The duties won’t take effect until at least Aug. 1.
Oil reversed an early drop on Monday despite a larger-than-expected supply increase by OPEC+ for August that was announced at the weekend. The group’s officials cited summer demand as one reason for their optimism that the extra barrels could be absorbed, and Saudi Arabia raised the price of its main crude grade to Asia.
The oil market has been volatile in recent weeks after the war between Israel and Iran, with a fragile truce now in place, but tensions in the Middle East are starting to rise again following fresh attacks on shipping in the Red Sea. In addition, traders are contending with the fallout from Trump’s drawn-out trade war, as well as concerns about a glut as OPEC+ commits to delivering larger volumes of crude.
“Traders are watching Trump’s new tariff threats and global growth risks, which could soften demand,” said Haris Khurshid, chief investment officer at Karobaar Capital LP. “Looking ahead, we should be paying attention to any new OPEC+ signals about extending or adjusting supply cuts.”
In the Middle East, a second vessel was targeted near Yemen on Monday, hours after Iranian-backed Houthis claimed responsibility for an earlier attack on a ship in the same area.
“These attacks raise supply-chain costs and insurance premiums for oil cargoes,” said Khurshid. “But unless there’s a major supply disruption, the impact stays mostly at the margins.”
Elsewhere, there are signs of tightness showing in the diesel market, as traders grapple with a summer supply squeeze. US stockpiles are at the lowest seasonally since 1996, while Europe benchmark futures signal a tighter market than during the height of the recent Israel-Iran conflict.
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Published on July 8, 2025