Oil prices continued their downward trajectory on Tuesday, driven by a combination of geopolitical tensions and economic concerns. Brent crude futures dropped 1.6%, settling at $71.62 per barrel, while U.S. West Texas Intermediate (WTI) crude fell 2.0%, closing at $68.37 per barrel.
One major contributor to the price decline is the Trump administration’s decision to halt all military aid to Ukraine, following a tense meeting between President Donald Trump and Ukrainian President Volodymyr Zelensky. This move has intensified existing uncertainties surrounding international relations, adding to market volatility.
Further contributing to the downward pressure, OPEC+ announced plans to boost oil production by 138,000 barrels per day starting in April, marking the first production increase since 2022. This decision has raised concerns about potential oversupply in the market, particularly when coupled with fears about the impact of new U.S. tariffs on Canada, Mexico, and China. These tariffs have sparked apprehension about slower global economic growth, which could negatively affect future oil demand.
Market analysts note that the Trump administration’s energy-related policy shifts, particularly the new tariff measures, are having a more significant negative impact than any potential benefits, contributing to the continued drop in oil prices. On Monday, oil prices had already fallen by about 2%, hitting a 12-week low in response to these geopolitical and trade-related challenges.
In conclusion, the combination of heightened geopolitical tensions, increased oil supply from OPEC+, and uncertainties around trade policy has created a difficult environment for the oil market, leading to a notable decrease in prices.
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