Oil prices were largely unchanged during Friday’s Asian session, yet they are poised for notable weekly losses due to mounting worries over demand softening from tariff measures and an impending supply surplus.
Crude found temporary support after U.S. President Donald Trump announced tougher restrictions on Russia’s oil industry, including steep tariffs targeting India. These new tariffs, effective Thursday as part of Trump’s reciprocal trade actions against major partners, have raised fears of broader economic disruptions worldwide that could dampen oil demand.
A stronger U.S. dollar also put pressure on crude, amid growing speculation about the next Federal Reserve chair following Jerome Powell’s tenure.
As of 21:41 ET (01:41 GMT), October Brent futures steadied at $66.43 per barrel, while West Texas Intermediate (WTI) futures held at $63.03 per barrel. Both contracts have shed roughly 4% to 5% over the week.
Oil set for its steepest weekly drop since late June amid demand and supply worries
The downward pressure on oil prices this week stemmed from concerns over weakening demand, particularly as U.S. tariffs affect global trade dynamics.
Cooling signs in the U.S. labor market added to the apprehension about demand strength, although inventory draws helped offset some of that bearish sentiment.
On the supply front, oil remains under strain following OPEC+’s decision to increase production quotas in September, continuing the process of unwinding nearly three years of output cuts.
Russia-Ukraine diplomacy adds a new variable
Russia confirmed on Thursday that President Vladimir Putin is expected to meet with U.S. President Donald Trump soon, amid calls from Western leaders for a resolution to the protracted Russia-Ukraine war.
The conflict, ongoing for over three years, has supported oil prices due to anticipated tighter Russian exports, but a possible ceasefire could ease that pressure.
Despite stringent U.S. sanctions on Russia’s oil sector, global supplies have not seen significant reductions to date.
This week, Trump imposed tariffs of up to 50% on Indian imports of Russian oil and threatened similar tariffs on China, the largest purchaser.
These measures provided only fleeting support to oil prices.
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