Oil prices are on edge. On Thursday, oil slid as Trump’s tariffs once again sparked fear across global markets. Investors worry these new moves will slow down world trade and cut demand for energy.
At the start of the day, Brent crude was down 3 cents at $70.16 a barrel. U.S. West Texas Intermediate also dropped 6 cents to $68.32. These small losses reflect big fears.
Trump’s Tariffs Hit Global Sentiment
This week, Donald Trump fired off a new round of tariffs. The biggest blow came when he warned Brazil of a huge 50% export tariff after clashing with President Lula.
That wasn’t all. Tariff letters also went out to countries like the Philippines, Iraq, South Korea, and Japan. He even targeted key sectors like copper, pharma, and semiconductors.
These moves make businesses nervous. They fear slower global trade and less oil demand — especially in Asia, where buyers are becoming cautious.
Fed Holds Back as Inflation Worries Rise
At home, U.S. officials are watching Trump’s tariffs closely. The Federal Reserve minutes show only a few members support cutting rates this month.
Why? Because tariffs can push prices up. And higher prices (inflation) may force interest rates to stay high. High rates usually hurt oil demand because they slow down borrowing and spending.
Gasoline Demand Brings Some Hope
Still, not all news was bad. In the U.S., gasoline demand jumped 6% last week to 9.2 million barrels per day. That’s a strong sign that people are still driving and spending.
Crude stockpiles rose, but gasoline and distillate inventories dropped. The U.S. Energy Information Administration confirmed this, showing a mixed supply-and-demand picture.
Flights, Freight, and OPEC Factors
Globally, air travel is booming. In the first week of July, flights hit a record average of 107,600 daily. China also saw its highest air traffic in five months.
Trade is picking up too, according to a J.P. Morgan note. They estimate oil demand growth at nearly 1 million barrels per day so far this year — matching forecasts.
Meanwhile, OPEC+ is trying to boost oil supply. But not everyone is hitting targets. Russia is struggling due to damaged infrastructure, and some members are already overproducing.
So even with production increases on paper, actual supply may not rise much.
