Oil prices fell sharply on Tuesday morning as concerns about a trade war between the United States and the European Union resurfaced, fueling fears of a decline in fuel demand. These tensions weighed on market sentiment, fearing they would hamper global economic activity. Brent crude fell 0.75% to $68.69 per barrel, while US WTI fell 0.76% to $66.69 per barrel. The August WTI contract expires today, while the more active September contract fell 0.82% to $65.41.

Priyanka Sachdeva, senior market analyst at Phillip Nova, said that demand concerns continue to mount as the market awaits a potential announcement of additional tariffs from US President Donald Trump ahead of the August 1 deadline. Furthermore, new US sanctions on Russian oil have added to tensions. Investors are also watching for potential retaliatory tariffs from the European Union, which could trigger further escalation.

Meanwhile, supply concerns are beginning to ease. Major producers such as OPEC and its allies have increased production, and the June 24 ceasefire between Israel and Iran has helped ease geopolitical risks. Saudi Arabian oil exports also reportedly rose to a three-month high in May, according to JODI data, indicating additional supply has entered the global market.

Despite pressure on the demand side, the weakening US dollar provided some support for oil prices, as buyers using other currencies were able to obtain oil at relatively cheaper prices. However, overall, concerns about slowing global growth due to trade conflicts dominated market sentiment, further depressing prices.
Source: Newsmaker.id