Oil Prices Inch Up Despite Tariff Concerns and Economic Slowdown Fears

Oil prices recovered slightly on Tuesday after earlier declines, despite lingering concerns over a potential U.S. recession, the impact of tariffs on global economic growth, and OPEC+ plans to increase supply. Brent crude futures edged up by 18 cents, or 0.3%, to $69.46 a barrel at 0640 GMT, while U.S. West Texas Intermediate (WTI) crude rose by 9 cents, or 0.1%, to $66.12 a barrel after earlier losses.

Market analysts noted that Brent crude holding around $70 per barrel remains a strong technical support level, which could lead to a short-term rebound in prices. Suvro Sarkar, energy sector team lead at DBS Bank, stated that OPEC+ is expected to maintain a flexible approach to supply adjustments based on market conditions. According to OPEC Secretariat calculations, the OPEC basket of twelve crudes stood at $75.16 a barrel, slightly up from $74.98 the previous day.

“If oil prices fall below the $70 per barrel mark for an extended period, output hikes may be paused in our opinion,” Sarkar said. He added that OPEC+ will closely monitor U.S. policies on Iran and Venezuela, which could further influence the oil market. The U.S. has already revoked Chevron’s license to operate in Venezuela, and there are concerns that sanctions on Iran could be intensified, affecting global supply dynamics.

However, in the short term, worries over global economic growth, policy uncertainties, and trade tensions remain the dominant factors influencing market sentiment. U.S. President Donald Trump’s protectionist trade policies have already caused significant volatility in global markets. His administration has imposed and then delayed tariffs on major oil suppliers such as Canada and Mexico while simultaneously increasing duties on Chinese goods. In response, both China and Canada have imposed retaliatory tariffs, escalating trade tensions.

Over the weekend, Trump acknowledged economic concerns, stating that the country is in a “period of transition” but declined to speculate on the possibility of a recession. His comments triggered a sell-off in financial markets as investors factored in the risks of slowing demand.

“Trump’s comments triggered a wave of selling as investors started pricing in the risk of weaker growth in demand,” said Daniel Hynes, senior commodity strategist at ANZ.

The oil market remains highly sensitive to geopolitical and economic developments. While short-term technical support levels may provide stability, uncertainty surrounding trade policies, global demand, and OPEC+ supply decisions will continue to drive price movements in the coming weeks.