Oil prices dropped on Monday, influenced by the potential economic impact of U.S. import tariffs on global growth and fuel demand, as well as rising output from OPEC+ producers. By 0720 GMT, Brent crude had decreased by 6 cents to $70.30 a barrel, following a 90-cent increase on Friday. Meanwhile, U.S. West Texas Intermediate (WTI) crude was at $66.96 a barrel, down 8 cents after rising by 68 cents in the previous session.
The Organization of the Petroleum Exporting Countries (OPEC) reported that as of March 3, the price of its basket of twelve crudes stood at $75.16 a barrel on Friday, up slightly from $74.98 the previous day. WTI saw a seventh consecutive week of declines, the longest losing streak since November 2023, while Brent also fell for the third straight week. This decline followed U.S. President Donald Trump’s decision to impose—and later delay—tariffs on key oil suppliers, Canada and Mexico, and increase taxes on Chinese goods. In retaliation, China imposed tariffs on U.S. and Canadian agricultural products.
According to ING analysts, “Tariff uncertainty is a key driver behind the weakness,” noting that oil price cuts from Saudi Arabia and deflationary signals from China were also contributing factors. IG analyst Tony Sycamore told Reuters that concerns about U.S. economic growth, the possible lifting of U.S. sanctions on Russia, and OPEC+ raising output were also pressuring oil prices.
However, Sycamore added that with much of the negative news likely priced in, he expected weekly support around $65/$62 to hold, with a potential recovery back to $72.00 for WTI. Oil prices recovered some losses on Friday after Trump announced the U.S. would impose additional sanctions on Russia if it fails to reach a ceasefire with Ukraine.
The U.S. is also exploring ways to ease sanctions on Russia’s energy sector if it agrees to end the war with Ukraine.
