Oil Plunges Weekly, Focus on Russian Supply and US Tariffs
Oil prices fell sharply this week, heading for their biggest weekly drop since June. Brent fell nearly 5% to around $66 per barrel, while West Texas Intermediate (WTI) fell below $64. The declines occurred despite the US imposing sanctions on India for importing Russian oil, and President Trump preparing to meet with Vladimir Putin despite the lack of a truce agreement with Ukraine.
Trump doubled tariffs on Indian imports to 50% as punishment for purchases of Russian oil, prompting India's state-owned oil company to reduce purchases and seek alternative sources. The US is also considering imposing tariffs on China for importing Russian energy. However, the market believes that US-Russia diplomatic efforts have not had a significant impact on oil supply.
Oil prices fell after three consecutive months of gains, due to concerns about a potential oversupply this year due to the easing of production curbs by OPEC+. The global economic slowdown, triggered by the trade war and Trump's policies, is also weighing on energy demand.
Energy analyst Gao Mingyu said the US-Russia talks and the planned Trump-Putin meeting have eased concerns about supply risks, lowering the geopolitical risk premium. Market conditions are now more bearish, driven by pressure from weakening supply and demand fundamentals. The price differential between short-term oil contracts also indicates looser market conditions compared to last month.
Key Points:
Oil falls nearly 5% this week, with Brent at $66, WTI below $64
US doubles import tariffs on India to 50% due to Russian oil purchases
Potential oversupply and a global economic slowdown weigh on oil prices
US-Russia diplomacy reduces geopolitical risks, making the market increasingly bearish. (ayu)
Source: Newsmaker.id
