Oil prices edged up after a 2% drop, pressured by new US tariffs and OPEC’s lowered demand forecasts.
Oil markets saw a modest price increase in Friday’s trading session, yet concerns over newly imposed US trade tariffs and OPEC’s revised global demand outlook continue to cast a shadow over the oil sector. These economic and geopolitical factors have significantly influenced the market’s future outlook.
Price Stabilization in the Oil Market
In early trading on Friday, July 11, 2025, oil prices stabilized and showed a slight rebound following a notable 2% decline in the previous session. Brent crude, the primary global oil benchmark, rose by 19 cents to reach $68.83 per barrel. Meanwhile, US West Texas Intermediate (WTI) crude also increased by 26 cents, trading at $66.83 per barrel. However, this modest recovery remained limited due to ongoing economic and political pressures.
Impact of New US Tariffs on the Global Market
A key driver behind the recent price decline has been the announcement of new tariffs by the US government. On Thursday, President Donald Trump declared a 35% tariff on goods imported from Canada, effective August 1. Additionally, tariffs ranging between 15% and 20% are set to be imposed on other US trading partners. These measures have raised concerns about slowing global economic growth and, consequently, reduced oil demand.
Moreover, President Trump threatened punitive tariffs on Brazil, Latin America’s largest economy, and announced plans for duties on commodities such as copper, semiconductors, and pharmaceuticals. These moves risk disrupting global supply chains and exerting downward pressure on oil consumption.
OPEC’s Downgraded Demand Forecast for Upcoming Years
In its 2025 annual World Oil Outlook released on Thursday, the Organization of the Petroleum Exporting Countries (OPEC) lowered its forecasts for global oil demand from 2026 through 2029. The downgrade is primarily attributed to slower economic growth and declining oil consumption in China. OPEC projects that average global oil demand will fall to 106.3 million barrels per day in 2026, down from last year’s forecast of 108 million barrels per day.
This downward revision has had a significant impact on the oil market, prompting producers to exercise greater caution when making production decisions.
Geopolitical Consequences and Sanctions
Alongside economic challenges, geopolitical developments have also influenced the oil market. The European Union is preparing a new sanctions package that includes a floating price cap on Russian oil. This initiative comes in response to falling oil prices, which have rendered the current price cap ineffective. EU diplomatic sources report that the new sanctions could increase pressure on Russia’s oil exports and have notable repercussions for the global oil supply.
Outlook for the Oil Market in the Coming Days
Considering the new US tariffs, OPEC’s reduced demand forecasts, and ongoing international sanctions, the oil market is expected to experience volatility in the near term. Many analysts believe oil prices will remain under pressure in the short run but may follow a different trajectory over the long term depending on producers’ policies and global economic conditions.
Oil producers, particularly OPEC member states, are currently assessing the evolving market environment, and their decisions on production levels will be pivotal in stabilizing prices.
