Oil Prices Face Biggest Weekly Losses in Months Due to Trade Tensions
Oil markets experienced a noticeable decline during trading on Friday, August 8, on track to record the worst weekly performance since late last month, amid fears of the repercussions of the U.S. tariffs that began to take effect on Thursday on the global economy.
Data showed that Brent crude futures fell by 0.87% (58 cents) to $66.40 per barrel, putting them on a path for a weekly loss exceeding 4%. U.S. crude futures also declined by 1% (66 cents) to $63.82 per barrel, heading for a weekly loss of more than 5%.
Analysts attribute this decline to several factors, foremost among them the implementation of new U.S. tariffs, which raised concerns about slowing economic growth. A note from analysts at "ANZ" indicated that "the tariffs have caused fears of weakened economic activity, which could negatively impact demand for crude oil."
The decision by the "OPEC+" alliance to end most production cuts starting next month, months ahead of schedule, has also increased pressure on prices.
In a related context, the Kremlin announced arrangements for a meeting soon between Russian President Vladimir Putin and U.S. President Donald Trump, which bolstered expectations of a possible diplomatic solution to the conflict in Ukraine, which could increase global oil supply.
The additional tariffs imposed by the United States on India due to its imports of Russian oil have somewhat restrained the decline. However, analysts at "StoneX" ruled out that this measure would significantly affect the flow of Russian oil to global markets.
These developments coincided with U.S. President's threats to China of imposing similar tariffs to those imposed on India, in light of its purchases of Russian oil, adding further uncertainty to the global trade landscape.
It is worth noting that U.S. crude futures closed on Thursday with a decline for the sixth consecutive time, and if this trend continues in Friday's session, it would mark the longest consecutive decline since August 2021, reflecting the severity of the pressures currently facing the markets.
