Oil Steadies As Traders Focus On US Tariffs, Red Sea Attacks
Brent held near $69 a barrel after advancing 1.9% on Monday, and West Texas Intermediate was below $68
Oil steadied as investors turned their attention to the potential fallout from US levies and an escalation of hostilities in the Red Sea.
Brent held near $69 a barrel after advancing 1.9% on Monday, and West Texas Intermediate was below $68. US President Donald Trump unveiled the first in a wave of higher tariff rates on trading partners, but suggested that he was still open to negotiations. The duties won’t take effect until at least Aug. 1.
The oil market has been volatile in recent weeks after the war between Israel and Iran, with a fragile truce now in place, but tensions in the Middle East are starting to rise again following attacks in the Red Sea. A second vessel was targeted near Yemen on Monday, hours after Iranian-backed Houthis claimed responsibility for an earlier attack on a ship in the same area.
Oil closed higher on Monday despite a larger-than-expected supply increase by OPEC+ for August. The group’s officials cited summer demand as one reason for their optimism that the extra barrels could be absorbed by the market, and Saudi Arabia raised the price of its main crude grade to Asia.
There are signs of tightness showing in the diesel market, as traders grapple with a summer supply squeeze. US stockpiles are at the lowest seasonally since 1996, while Europe benchmark futures are signaling a tighter market than during the height of the Israel-Iran conflict.
Trump initially announced his intent to impose 25% levies on goods from Japan and South Korea, with a dozen more notifications following on partners including Indonesia. Later on Monday, he said the notifications were “not 100% firm” and signaled he remained open to negotiations.
Prices:
Brent for September delivery was 0.3% lower at $69.37 a barrel as of 8:31 a.m. in Singapore.
WTI for August delivery dipped 0.4% to $67.69 a barrel.
