Oil Prices Tumble Amid Trade Tensions and Russian Sanctions

Oil prices are falling amid renewed trade tensions and US President Donald Trump's threat of tighter sanctions on Russia over the Ukraine war. West Texas Intermediate crude oil is down 1% to $65.65 per barrel, while Brent crude oil is down 0.87% to $67.91. Stocks of major oil producers like Chevron (CVX), Shell (SHEL), and ExxonMobil (XOM) are also under pressure. OPEC+ is considering a pause in further production increases starting in October due to concerns about a slowdown in global oil demand.

Oil prices experienced a significant downturn on Monday, with West Texas Intermediate crude oil declining by 1% to $65.65 per barrel and Brent crude oil falling by 0.87% to $67.91 [1]. This sharp decline was largely driven by investor concerns over U.S. President Donald Trump's threat to impose sanctions on Russian oil buyers within 50 days. The market initially rallied on expectations of steeper sanctions but retreated as the deadline was seen as further off [1].

Trump's announcement of new weapons for Ukraine also contributed to market volatility. The EU and South Korea are working on trade deals with the U.S. to mitigate the impact of looming tariffs [3]. Benchmark Brent crude prices rose by 0.2% to $70.47 per barrel, while U.S. West Texas Intermediate crude prices gained 3 cents to $68.49 per barrel at 2.42 a.m. GMT [3].

Major energy stocks, including Haliburton, Schlumberger, Baker Hughes, Exxon Mobil, and Chevron, were down by 1% to 2% [1]. The energy sector's performance was closely watched as an indicator of the sector's overall health. Investors remain cautious as they await further details on Trump's sanctions plan and the potential impact on global oil supplies [1].

The International Energy Agency (IEA) reported that Saudi Arabia exceeded its oil output target for June by 430,000 barrels per day, offsetting some of the supply risks [3]. In other news, the EU is considering setting a lower price cap on Russian oil [3]. Retail sentiment about the United States Oil Fund (USO) remains in the 'extremely bearish' territory [3].

On Tuesday, crude oil prices continued to show weakness after President Trump refrained from imposing new sanctions on Russian oil exports on Monday. The market's focus remains on the geopolitical tensions and the potential impact on Russian oil supplies. Traders are closely monitoring the developments to assess the future outlook for oil prices [2].

OPEC+ is considering a pause in further production increases starting in October due to concerns about a slowdown in global oil demand. The Vienna-based cartel expects global trade tensions to ease in the coming weeks and kept its oil-demand forecast unchanged [4].

References:
[1] https://www.barrons.com/livecoverage/stock-market-news-today-071425/card/energy-is-taking-a-hit-today-oil-prices-are-lower--SDVE71iDTUyRbMCPnftG
[2] https://www.cnbc.com/2025/07/14/oil-edges-up-investors-eye-trump-statement-on-russia.html
[3] https://stocktwits.com/news-articles/markets/equity/oil-prices-edge-higher-as-trump-teases-russia-sanctions/ch8BjnnR5Nt
[4] https://www.wsj.com/business/energy-oil/opec-expects-progress-on-trade-holds-oil-demand-outlook-steady-8aa89baa