Oil Slips For Second Week On Tariffs, OPEC Hike, And Peace Talks

The White House has simultaneously stepped up pressure on Moscow, signalling that penalties could be tightened if peace talks fail.

Beyond geopolitics, market attention is turning to US inflation data due on Tuesday, which could influence Federal Reserve interest rate expectations.

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Oil prices edged lower in early Asian trade on Monday, adding to last week’s sharp declines driven by a mix of geopolitical and economic factors. The drop followed higher US tariffs on key trading partners, an increase in OPEC production, and rising hopes that Washington and Moscow may be moving closer to a ceasefire agreement in Ukraine.

By around 6 AM, Brent crude futures slipped 52 cents, or 0.78 per cent, to $66.07 a barrel. US West Texas Intermediate (WTI) crude was down 58 cents at $63.30, reported Reuters. The latest weakness comes after Brent tumbled 4.4 per cent and WTI fell 5.1 per cent over the week ending Friday.

Ceasefire Hopes Lift Supply Outlook

Expectations for a possible resolution to the Ukraine conflict have intensified after US President Donald Trump announced on Friday that he would meet Russian President Vladimir Putin in Alaska on August 15 to negotiate an end to the war. A breakthrough could lead to the lifting of sanctions that have curbed the flow of Russian oil to global markets.

The White House has simultaneously stepped up pressure on Moscow, signalling that penalties could be tightened if peace talks fail. Trump had set last Friday as the deadline for Russia to agree to a peace deal or risk its oil buyers facing secondary sanctions. Washington is also urging India to scale back its Russian crude imports.

Economic Data in Focus

Beyond geopolitics, market attention is turning to US inflation data due on Tuesday, which could influence Federal Reserve interest rate expectations. “A weaker-than-expected CPI print would boost expectations for earlier and deeper Fed interest rate cuts, which would likely stimulate economic activity and increase crude oil demand,” said IG market analyst Tony Sycamore in a note.

“Conversely, a hotter print would spark stagflation fears and push back expectations of Fed rate cuts,” he added.

The recent tariff hikes by Trump, covering imports from dozens of nations and effective from Thursday, are expected to disrupt supply chains and add inflationary pressures, potentially weighing further on global economic growth.