Crude oil prices declined on Monday as escalating trade tensions and increased production from OPEC+ raised concerns over weaker energy demand.
Brent crude fell 1.5% to close at $69.28 per barrel, while U.S. West Texas Intermediate (WTI) settled at $66.03, also down 1.5%. WTI has now recorded seven straight weeks of declines, its longest losing streak since late 2023, while Brent has dropped for three consecutive weeks.
Global Trade Policies Weigh on Oil Markets
Uncertainty in global trade is pressuring the oil market, with U.S. tariff policies affecting key trade partners, including Canada, Mexico, and China major importers of crude. As a result, concerns over economic slowdowns and retaliatory measures from these countries have unsettled investors.
“This market is navigating significant risks, from trade disputes to broader economic uncertainty,” said John Kilduff, partner at Again Capital in New York. “The possibility of slower growth in key economies is dampening confidence in oil demand.”
Over the weekend, U.S. Commerce Secretary Howard Lutnick reiterated that tariff measures would remain in place, adding further strain to an already volatile market.
Stock Market Slide Fuels Concerns
Investor sentiment has taken a hit, with major stock indices seeing significant losses. The S&P 500 dipped 2% in midday trading, while the Nasdaq Composite fell by over 3%. Oil followed the downward trend since crude prices often move in tandem with equities.
OPEC+ Supply Strategy and Geopolitical Pressures
Compounding the issue, Russia’s Deputy Prime Minister Alexander Novak announced that OPEC+ would begin increasing oil production in April. However, he noted that the group may reconsider its decision depending on market conditions.
Meanwhile, geopolitical risks remain a factor. The U.S. is ramping up sanctions against Iran to curb its nuclear activities, while Iran’s Supreme Leader Ayatollah Ali Khamenei dismissed any possibility of negotiation under pressure.
Further sanctions against Russia and Iran could provide short-term support for oil prices, according to PVM analyst Tamas Varga. However, he warned that “long-term uncertainties continue to limit any sustained price rally.”
Oil markets saw a brief recovery on Friday after President Trump signaled tougher sanctions on Russia if it fails to agree to a ceasefire in Ukraine. Meanwhile, U.S. officials are reportedly evaluating possible adjustments to energy-related sanctions on Russia if it moves toward de-escalation.
Outlook: Key Reports to Shape Market Direction
Traders are now looking ahead to new reports from the International Energy Agency (IEA) and OPEC, which will provide fresh insights into global supply-demand dynamics. Analysts will be watching closely to assess how production increases, geopolitical risks, and economic factors will influence future price movements.
With volatility persisting, industry stakeholders remain cautious, closely tracking trade policies, supply trends, and regulatory developments for potential shifts in market sentiment.
