Oil prices dipped slightly on Tuesday as investor anxiety over immediate sanctions on Russian crude faded after U.S. President Donald Trump gave a 50-day deadline for Moscow to end the war in Ukraine. Brent crude settled down 50 cents, or 0.7%, at $68.71 a barrel, while U.S. West Texas Intermediate crude slipped 46 cents, or 0.7%, to settle at $66.52.
Earlier gains sparked by the potential for swift U.S. sanctions on Russian oil exports reversed as markets took a more measured view of the timeline. The deadline gave traders reason to believe sanctions could ultimately be avoided, easing fears of imminent supply disruption. UBS analyst Giovanni Staunovo noted that the delay helped cool tightness concerns that had previously lifted prices.
Still, analysts at ING cautioned that if sanctions are eventually imposed, they could significantly alter the oil market landscape. Major Russian crude buyers — including China, India, and Turkey — would face a dilemma between benefiting from discounted Russian barrels or risking access to the U.S. market under tariff pressure.
Tariff worries remain in focus more broadly. Trump reiterated plans for a 30% tariff on EU and Mexican imports starting August 1, adding to recent trade threats against Brazil and others. The potential drag on global economic growth continues to weigh on oil demand forecasts, especially as China’s Q2 data pointed to a slowing economy despite some fiscal frontloading that temporarily buoyed output.
On the supply side, U.S. crude inventories rose by 839,000 barrels last week, according to API data, with official figures from the EIA expected Wednesday. Meanwhile, OPEC’s secretary general said demand would remain “very strong” into Q3, helping to keep the market relatively balanced despite ongoing geopolitical and economic headwinds.