Oil prices retreated on Tuesday, easing after nearly 2% gains in the previous session, as markets responded to fresh U.S. tariff announcements and a higher-than-expected August output hike by OPEC+.
By 0330 GMT, Brent crude futures slipped 22 cents, or 0.3%, to $69.36 per barrel, while U.S. West Texas Intermediate (WTI) dropped 27 cents, or 0.4%, to $67.66 per barrel.
Market sentiment shifted after U.S. President Donald Trump signalled that sharply higher tariffs would begin August 1, affecting major oil trade partners like South Korea and Japan, as well as smaller exporters including Serbia, Thailand, and Tunisia. Although Trump later softened his position, stating the deadline was “not 100% firm,” the uncertainty injected fresh volatility into oil markets.
Analysts say the tariff tensions have raised concerns over a potential slowdown in global economic growth, which could weaken oil demand in the coming months.
Meanwhile, OPEC+ surprised traders with a larger-than-expected production hike for August, adding further downward pressure on prices amid fears of oversupply.
Despite these headwinds, some indicators show current demand remains robust. In the U.S., the world’s largest oil consumer, demand received a boost from holiday travel. According to travel group AAA, a record 72.2 million Americans were projected to travel more than 50 miles for Fourth of July vacations.
This strong domestic travel activity has helped cushion prices from steeper declines, but analysts warn that geopolitical risks and economic uncertainty will likely continue to drive short-term price movements.
