Oil prices dipped slightly during Tuesday’s early trading hours in Asia as markets absorbed two major geopolitical and economic developments: a fresh ultimatum from U.S. President Donald Trump to Russia over the war in Ukraine and a mixed batch of second-quarter economic data out of China.
By 21:56 ET (01:56 GMT), Brent crude futures for September delivery had slipped 0.2% to $69.06 per barrel. Meanwhile, West Texas Intermediate (WTI) crude dropped 0.3%, trading at $66.79 per barrel.
Crude markets initially gained ground on Monday after Trump’s unexpected statement, but reversed course later in the session, ending nearly 2% lower. Investors pulled back as Trump opted not to impose immediate penalties, instead setting a 50-day countdown for Russia to withdraw from Ukraine or face new sanctions.
Trump Issues 50-Day Warning to Moscow
In a Monday address, Trump warned the Kremlin that it had 50 days to broker peace in Ukraine or risk a new wave of “secondary sanctions” targeting countries that continue to import Russian oil.
The threat initially spurred oil higher amid fears of disrupted global supply. However, prices lost steam as traders questioned whether the sanctions would materialize or be enforced effectively.
Analysts at ING noted that the market’s muted reaction was likely due to skepticism over the seriousness of Trump’s timeline. They pointed out that, while enforcement remains uncertain, should Trump follow through, the move could significantly impact global supply dynamics, given Russia’s role in exporting over 7 million barrels per day of crude and refined products.
Major buyers of Russian oil—such as China, India, and Turkey—would be directly affected, and OPEC’s limited spare capacity could make replacing that volume a major challenge. ING further suggested that Trump’s historical focus on keeping oil prices low makes it unlikely he would push ahead with a policy that could trigger a price spike.
Trade Tensions Intensify, but China’s Growth Beats Forecasts
Markets also digested further fallout from Trump’s trade policies. Having already announced sweeping tariffs—30% on most goods from the European Union and Mexico beginning August 1—the U.S. now faces potential retaliation.
According to reports on Monday, the EU has prepared a counter-tariff package worth $84 billion, signaling escalating friction ahead of the implementation date. The latest round of U.S. tariffs also includes new levies on imports from Japan, South Korea, Canada, and Brazil, along with a steep 50% duty on copper.
On the economic front, China’s second-quarter GDP came in stronger than expected, expanding 5.2% year-on-year—slightly above the consensus forecast of 5.1%. The growth was largely driven by resilient exports and increased government spending.
However, not all indicators were upbeat. Data released Tuesday showed that industrial production exceeded expectations in June, while retail sales underperformed, reflecting uneven momentum in the consumer sector.
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