Oil prices dip as traders weigh Trump’s Russia tariff warning, China Q2 GDP
Oil prices edged lower in Asian trade on Tuesday as markets weighed U.S. President Donald Trump’s 50-day ultimatum for Russia to end the Ukraine war and threats of sanctions on buyers of its oil.
Traders also digested a flurry of Chinese economic data on Tuesday, including second-quarter GDP, industrial production, retail sales, and other key indicators.
As of 21:56 ET (01:56 GMT), Brent oil futures expiring in September ticked down 0.2% to $69.06 per barrel, while West Texas Intermediate (WTI) crude futures fell 0.3% to $66.79 per barrel.
After an initial rally, oil prices closed nearly 2% lower on Monday as Trump refrained from harsher, immediate action, providing a 50-day grace period.
Trump declares 50-day deadline for Russia to end Ukraine war
Trump on Monday issued a 50-day deadline for Russia to secure a peace deal in Ukraine, threatening “secondary sanctions” on any country that continues importing Russian oil if Moscow fails to comply.
The initial reaction sent crude prices higher, but they later eased as traders assessed when and how these sanction mechanisms would actually be enforced.
"The lack of any immediate action and the belief that these threats won’t be carried out help to explain the market reaction,” ING analysts said in a note.
“However, if Trump does follow through, and the tariff is implemented effectively, it would drastically change the outlook for the oil market. Russia exports more than 7m b/d of crude oil and refined products,” they said.
China, India and Turkey are the largest buyers of Russian crude oil.
“OPEC’s spare production capacity would not be able to fill the entire shortfall. This would present significant upside to oil prices. Given Trump’s desire for low oil prices, we don’t believe Trump would be keen to follow through with this threat,” analysts added.
Trump tariffs in focus; China GDP beats forecast
Trump said last week that he would impose a 30% tariff on most imports from the European Union and Mexico from August 1.
In response, media reports on Monday showed that the EU has finalized a new list of potential tariffs targeting $84 billion worth of U.S. goods, escalating the threat of a trade clash with Washington.
Earlier in the week, Trump announced new tariffs on a number of countries, including Japan, South Korea, Canada, and Brazil, along with a 50% tariff on copper, all effective August 1.
Meanwhile, data on Monday showed that China’s economy expanded 5.2% year-on-year in the second quarter of 2025, slightly above market expectations of 5.1%, supported by resilient exports and government stimulus.
Separate data for both industrial output and retail sales for June were also released on Tuesday.
Factory output jumped sharply above forecasts, while retail sales came in lower than expected.
Source: Investing.com
