Oil Prices Decline Amid Ukraine Aid Pause, Tariffs, and OPEC Output Increase

Highlights:

• Oil prices fell further, with Brent at $US71.08 and WTI at $US68.01 at the time of writing.
• OPEC+ increased oil output by 138,000 barrels per day, its first hike since 2022.
• US trade tariffs and geopolitical tensions are adding to economic concerns, weighing on market sentiment.

Market Reacts to Policy Shifts

Global oil prices have continued their downward trend following key geopolitical and economic developments. At the time of writing, Brent crude dropped 54 cents (0.75%) to $US71.08 per barrel, while West Texas Intermediate (WTI) crude declined 36 cents (0.53%) to $US68.01 per barrel. The price slump comes in response to the US administration's decision to suspend military aid to Ukraine, alongside the market’s concerns over new tariff measures set to take effect on Canada, Mexico, and China.

OPEC+ Increases Oil Output

The decision by OPEC+ to raise oil production by 138,000 barrels per day—the first increase since 2022—has added further pressure on prices. This move has sparked concerns about oversupply, contributing to a 2% decline in oil prices to a 12-week low earlier in the week.

Tariffs and Economic Concerns

Investors are also factoring in the potential economic slowdown triggered by fresh US tariffs, which could dampen demand for oil globally. Analysts at BMI noted that while multiple energy-related policy announcements have been made recently, the downside risks—especially those linked to US trade measures—are currently dominating market sentiment.

Uncertain Market Outlook

With geopolitical tensions and trade uncertainties shaping market movements, oil prices may remain volatile in the coming weeks. Investors will closely watch future policy decisions, global economic trends, and supply adjustments from OPEC+ to gauge the direction of the energy market.

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