Crude oil prices slipped below the $68 mark as global markets braced for heightened trade tensions triggered by impending US tariffs. The looming tariffs, set to take effect August 1, have cast a shadow on global economic prospects, with several ratings agencies now projecting a downside risk to global growth.
On Monday, Brent crude dipped by 0.5% to $67.99 per barrel, down from $68.35 at the previous session close. The US benchmark, West Texas Intermediate (WTI), also shed 0.6%, dropping to $65.26 per barrel from its prior close of $65.65.
Market analysts attribute the downturn to a cocktail of factors including weak demand signals from China, ongoing geopolitical instability, and concerns about the US Federal Reserve’s policy trajectory. With President Donald Trump pushing forward with his tariff agenda, investors are increasingly wary of escalated trade frictions.
Adding to market uncertainty, Trump intensified criticism of Fed Chair Jerome Powell, asserting he knows “what’s good for the Market and the US” better than the central bank. Treasury Secretary Scott Bessent added fuel to the fire, questioning the Fed’s credibility and hinting at potential institutional overhauls.
Tensions in the Middle East also played a role in sustaining risk premiums. Trump defended last month’s targeted strikes on three Iranian nuclear sites, reaffirming Washington’s readiness to repeat such action if provoked. Responding to Iranian Foreign Minister Abbas Araghchi’s statement that the facilities had been “seriously damaged,” Trump posted on Truth Social: “Of course they are, just like I said.”
Meanwhile, the United Kingdom unveiled a sweeping new sanctions package targeting Russia’s energy sector. The UK Foreign Office announced 137 new sanctions focused on oil revenues and the so-called Russian “shadow fleet.” Among those targeted were 135 vessels implicated in the covert transport of approximately $24 billion in crude oil and refined products since early 2024.
Two maritime firms were also sanctioned in connection with this network, part of a broader effort to dismantle Russia’s global shadow oil trade and reinforce Western economic pressure.
Despite the drop in prices, analysts say geopolitical tensions are preventing a steeper decline, with potential supply disruptions keeping a floor under the market.
