Oil Falls 2.5% in U.S. Despite Trump’s Tariff Threat Against Russia
Despite the geopolitical backdrop, weak global demand and macro uncertainty continue to cap oil’s upside — at least for now.
Quick overview
- Oil prices fell on July 14 after initial gains, as traders reacted to President Trump's threats to sanction buyers of Russian crude.
- Brent crude dropped 1.9% to $69.13 per barrel, while West Texas Intermediate fell 2.5% to $66.85, despite earlier climbing to three-week highs.
- Markets interpreted Trump's 50-day timeline for potential sanctions as allowing room for negotiation, reducing immediate supply shock concerns.
- Weak global demand and macroeconomic uncertainty continue to limit oil price increases, despite ongoing geopolitical tensions.
Oil prices fell on Monday, July 14, despite initial gains, as traders digested President Donald Trump’s latest threats to sanction buyers of Russian crude — a move that markets ultimately viewed as less aggressive than expected.
Brent crude, the European benchmark, slid 1.9% to $69.13 per barrel, while West Texas Intermediate (WTI) dropped 2.5% to $66.85. Earlier in the day, both had climbed to three-week highs on speculation of harsher U.S. actions against Moscow.
Trump announced additional arms shipments to Ukraine and warned that the U.S. could impose sanctions on countries purchasing Russian oil unless Russia agrees to a peace deal within 50 days. However, markets interpreted the timeline as leaving room for negotiation, reducing the perceived immediacy of any supply shock.
“Traders were bracing for sanctions to take effect right away. The idea of a 50-day window makes the risk feel more distant,” noted one analyst.
Last week, Trump had promised a “major announcement” on Russia, fueling expectations of a swift, hardline move. But Monday’s tone — while still confrontational — fell short of the market’s hawkish forecast.
Adding to the complex picture, Russia’s seaborne oil product exports in June fell 3.4% from May to 8.98 million tons, according to industry sources and Reuters estimates.
Meanwhile, momentum is building in the U.S. Congress for a bipartisan bill that would increase sanctions on Russia, while EU envoys are reportedly nearing agreement on an 18th sanctions package, including a lower price cap on Russian oil.
Despite the geopolitical backdrop, weak global demand and macro uncertainty continue to cap oil’s upside — at least for now.
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