Oil Prices Climb 2% After US-EU Trade Deal and Trump’s Russia Warning
Oil prices rose by 2% on Monday following a major trade agreement between the United States and the European Union, and a new warning from U.S. President Donald Trump to Russia over the war in Ukraine.
Brent crude futures increased by $1.60, or 2.3%, reaching $70.04 per barrel. Meanwhile, U.S. West Texas Intermediate (WTI) crude rose $1.55, or 2.4%, to $66.71.
Brent crude reached a 10-day high after Trump announced he was shortening the 50-day deadline previously given to Russia, reducing it to just 10 to 12 days. The president warned that if progress isn’t made on ending the conflict in Ukraine, Russia would face new sanctions.
Market analyst Tony Sycamore of IG said oil prices are also gaining support from the U.S.-EU deal and the possible extension of the U.S.-China tariff pause.
Announced on Sunday, the trade deal between the U.S. and EU imposes a 15% import tariff on most EU goods. Trump also revealed the agreement includes a pledge from the EU to purchase $750 billion worth of U.S. energy in the coming years.
“Europe will have to reduce its reliance on Russian energy,” said Phil Flynn, senior analyst at Price Futures Group. “This deal boosts U.S. energy producers and increases pressure on President Putin.”
In Stockholm, top U.S. and Chinese officials are meeting this week in an effort to extend the current trade truce before the August 12 deadline. Markets are watching these discussions closely.
Tamas Varga, analyst at PVM, noted that the U.S.-EU deal reduced some market uncertainty, shifting investor focus back to supply and demand fundamentals. However, he added that a strong U.S. dollar and lower oil imports from India continue to limit price gains.
On the supply side, an OPEC+ panel on Monday emphasized the importance of full compliance with oil output agreements. This comes ahead of Sunday’s meeting involving eight OPEC+ member nations to discuss possible production increases for September.
According to ING analysts, OPEC+—which includes the Organization of the Petroleum Exporting Countries and allies like Russia—is expected to fully restore 2.2 million barrels per day of previously cut voluntary supply by the end of September.
