Oil Holds Steady After Sharp Drop as Markets Weigh Tariffs and OPEC+ Supply Outlook
Oil prices remained stable during Asian trading hours on Friday, following a sharp decline the previous day, as traders assessed renewed U.S. tariff threats from President Donald Trump and continued to monitor signals from OPEC+ regarding future supply levels.
By 21:47 ET (01:47 GMT), Brent crude futures for September delivery were up 0.5% at $69.01 per barrel, while West Texas Intermediate (WTI) crude rose 0.7% to $67.00 per barrel. Both benchmarks had dropped nearly 2% on Thursday after reaching two-week highs earlier in the week.
Trump Escalates Tariffs With 35% Levy on Canada
President Trump announced Thursday that the U.S. will impose a 35% tariff on Canadian imports starting August 1, warning the rate could increase if Canada retaliates. The move comes amid a broader escalation in trade actions, with new duties of 25% on goods from South Korea and Japan and a 50% tariff on copper imports, all set to take effect on the same date.
Such tariffs typically slow global economic growth by disrupting trade flows and increasing input costs, which can reduce industrial activity and travel—two major sources of oil demand.
“Tariffs remain a key downside risk for the oil market,” analysts at ING wrote in a recent note.
OPEC+ Supply Strategy Under Scrutiny
Meanwhile, OPEC+’s supply plans were back in focus. A Bloomberg report Thursday indicated the alliance may pause additional production hikes following its scheduled increase next month. OPEC+ is currently on track to restore 2.2 million barrels per day by September, with the final 550,000-barrel increase planned for August.
On the demand side, the group trimmed its global oil demand forecast for the next four years, citing weaker-than-expected growth in China.
“While OPEC+’s supply increases will help balance the market in the near term, we’re unlikely to see a surplus emerge until Q4,” ING analysts noted. “We expect oil prices to come under more sustained downward pressure later this year.”
