Oil Prices Set for Steepest Weekly Drop Since June on Tariff Concerns and Sanctions Easing Prospects

Oil prices fell further on Friday, heading for their sharpest weekly losses since late June, as fresh US tariffs raised concerns over global economic growth and the prospect of upcoming talks between Donald Trump and Vladimir Putin increased expectations of eased sanctions on Russia.

Brent crude futures slipped 51 cents to $65.92 a barrel by 9:30 a.m. Saudi time, putting them on track for a weekly decline of more than 4 percent. US West Texas Intermediate (WTI) crude futures dropped 57 cents, or 0.89 percent, to $63.31 a barrel, with prices set to fall nearly 6 percent over the week.

The latest round of higher US tariffs against multiple trade partners took effect on Thursday. Analysts at ANZ Bank said in a note that the measures have heightened fears of weaker economic activity, which could dampen global oil demand. These concerns come amid signs of a softer-than-expected US labor market, further clouding the outlook.

Adding to market pressures, the Kremlin announced on Thursday that Russian President Vladimir Putin and US President Donald Trump will hold talks in the coming days. Traders interpreted the meeting as a potential step toward a diplomatic resolution to the conflict in Ukraine, a move that could lead to an easing of sanctions on Russian oil exports.

Easing restrictions on Russia could release additional barrels into an already oversupplied market. “The possibility of a sanctions rollback is being seen as a bearish factor, especially at a time when demand concerns are already in play,” independent market analyst Tina Teng told Reuters.

Earlier in the week, Trump warned that India could face higher US tariffs if it continued purchasing Russian oil — a move market participants saw as increasing pressure on Moscow to negotiate with Washington. The US president also signaled that China, Russia’s largest crude buyer, could face similar tariff measures.

The bearish sentiment has been compounded by last weekend’s decision by the OPEC+ alliance to fully unwind its largest tranche of production cuts in September, several months ahead of schedule. Analysts said the decision adds to supply pressures at a time when demand forecasts are under strain.

At Thursday’s close, WTI futures had fallen for six consecutive sessions, equaling a losing streak last seen in December 2023. Should prices settle lower on Friday, it would mark the longest consecutive daily decline since August 2021.

The combination of escalating trade tensions, potential geopolitical shifts, and increasing supply has set the stage for a volatile period in oil markets, with traders watching closely for the outcome of the Trump-Putin meeting and any shifts in OPEC+ policy.