Oil markets experienced fresh downward pressure as global trade tensions weighed on investor sentiment, counterbalancing a moderate decline in U.S. crude inventories.
Brent crude, the global benchmark, slipped by roughly 0.5% to trade at $68 per barrel—down slightly from its previous session’s close. West Texas Intermediate (WTI), the U.S. benchmark, also dropped 0.9%, settling at $65.25 per barrel.
The price retreat follows market anxiety over the United States’ impending trade measures. President Donald Trump’s announcement of a finalized trade agreement with Japan—entailing a 15% export tariff and $550 billion investment pledge—has stoked uncertainty about upcoming tariff implementations, particularly the planned 25% sector-specific tariff effective August 1.
Trump, promoting the deal as the largest trade agreement in U.S. history via his Truth Social platform, stated that 90% of the profit from Japanese investments would benefit U.S. interests, potentially creating hundreds of thousands of new jobs.
These trade dynamics are causing jitters across global markets, especially with unresolved issues between the U.S. and other trading partners like China and the EU. U.S. Treasury Secretary Scott Bessent is expected to meet Chinese counterparts in Stockholm next week to negotiate an extension of tariff deferrals.
Meanwhile, data from the American Petroleum Institute (API) indicated a 577,000-barrel draw in U.S. crude inventories last week, suggesting improving demand. Official data from the Energy Information Administration (EIA) is awaited for confirmation.
In the broader energy landscape, Türkiye has entered into discussions with Iraq on a strategic cooperation deal involving the transportation of Iraqi oil. The prospective agreement would encompass joint crude and gas projects, refinery expansion, and enhanced electricity trading. With the current Crude Oil Pipeline Agreement set to expire on July 27, 2026, both sides aim to draft a modern framework aligned with current geopolitical and energy realities.
