Slight Decline in Oil Prices Amid Concerns Over Ukrainian War Ramifications and Escalating Trade Tensions

Oil prices witnessed a limited decline during trading on Thursday, July 31, as investors focused on evaluating the risks of supply shortages amidst U.S. escalation towards Russia and China, along with the rise in U.S. oil inventories.

U.S. President Donald Trump had threatened on Tuesday to impose "secondary tariffs of 100% on Russia's trading partners" if Moscow did not make progress in ending the war with Ukraine within "10 to 12 days," after reducing the deadline from the previously announced 50 days.

In a related context, Trump announced on Wednesday that the United States would "impose a 25% tariff on Indian imported goods starting Friday," indicating that negotiations with New Delhi are ongoing. Washington also warned China, the largest importer of Russian oil, of the possibility of imposing "massive tariffs" if it continues to purchase oil from Moscow.

On the other hand, the U.S. Treasury Department revealed on Wednesday the imposition of "sanctions on more than 115 individuals, entities, and ships linked to Iran," as part of the "maximum pressure" campaign launched by the Trump administration against Tehran, especially after the attacks on its nuclear facilities last June. China is also the largest buyer of Iranian oil.

Official data showed an increase in U.S. crude oil inventories by 7.7 million barrels last week, reaching 426.7 million barrels, supported by a decrease in exports.

At the end of trading, Brent crude futures fell by 0.3% to $73 per barrel, while U.S. West Texas Intermediate (WTI) crude dropped by 0.2% to $69.85 per barrel.