Baghdad, Iraq- Oil prices fell on Monday as concerns over U.S. import tariffs, slowing global economic growth, and rising output from OPEC+ producers weighed on investor sentiment. Uncertainty surrounding fuel demand further dampened appetite for riskier assets.
By 0445 GMT, Brent crude had declined by 31 cents, or 0.4%, to $70.05 per barrel after gaining 90 cents on Friday. U.S. West Texas Intermediate (WTI) dropped 35 cents, or 0.5%, to $66.69 per barrel, following a 68-cent increase in the previous session.
WTI recorded its seventh consecutive weekly decline, the longest losing streak since November 2023. Brent also fell for a third straight week, driven by market jitters over U.S. tariff policies. President Donald Trump imposed and later delayed tariffs on key oil suppliers Canada and Mexico while increasing duties on Chinese goods. In response, China imposed tariffs on U.S. and Canadian agricultural products.
“Tariff uncertainty is a key driver behind the weakness,” ING analysts noted, citing Saudi oil price cuts and deflationary signals from China as additional factors affecting market confidence.
IG analyst Tony Sycamore pointed to broader economic concerns, including sluggish U.S. growth and the potential lifting of sanctions on Russia. Additionally, OPEC+ confirmed plans to increase oil output starting in April, adding to supply-side pressure.
Despite the current downturn, Sycamore expects WTI prices to find support between $65 and $62 before rebounding to $72.
Oil prices regained some ground on Friday after Trump announced plans to increase sanctions on Russia if it fails to negotiate a ceasefire with Ukraine. However, sources told Reuters that the U.S. is also exploring ways to ease sanctions on Russia’s energy sector if a peace agreement is reached.
Meanwhile, Saudi Arabia announced its first price cut in three months for crude sold to Asia, fueling concerns about weakening demand. OPEC+ signaled its willingness to reverse planned production hikes if market conditions deteriorate, according to Russian Deputy Prime Minister Alexander Novak.
On the geopolitical front, Trump expressed interest in negotiating with Iran to prevent it from developing nuclear weapons. However, Iran denied any such ambitions, with Supreme Leader Ayatollah Ali Khamenei stating that Tehran would not be pressured into talks. The U.S. has continued its “maximum pressure” campaign, recently revoking a waiver that allowed Iraq to pay Iran for electricity imports.
