Oil prices do not fall due to expectations of Trump’s sanctions against Russia
1 August 2025 08:55
Oil prices were barely changed on Friday after falling by more than 1% in the previous trading session. Traders were assessing the impact of the new US tariff hikes, which could dampen economic activity and reduce the growth of global fuel demand, "Komersant Ukrainian" reports citing Reuters.
Prices on the exchanges
According to OilPrice.com, futures for Brent crude oil rose by 10 cents, or 0.14%, to $71.80 per barrel as of 08:41 Kyiv time. U.S. WTI crude rose 8 cents, or 0.12%, to $69.34.
At the same time, Brent prices are up about 4.9% for the week, and WTI – by 6.4% after US President Donald Trump threatened earlier this week to impose tariffs on buyers of Russian crude oil, including China and India, to force Russia to end its war against Ukraine.
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Trump’s tariffs
However, on Friday, investors focused more on Trump’s introduction of new, mostly higher, tariff rates for US trading partners, which come into effect today, August 1.
Trump signed an executive order on Thursday to impose tariffs ranging from 10% to 41% on U.S. imports from dozens of countries and foreign territories, including Canada, India, and Taiwan, that failed to conclude trade agreements by his August 1 deadline.
Some analysts warn that these fees will limit economic growth due to higher prices, which will negatively affect oil consumption.
The situation in the United States
On Thursday, there were signs that the existing tariffs are already putting pressure on price growth in the United States, the world’s largest economy and oil consumer.
US inflation rose in June as tariffs pushed up prices for imported goods such as home furnishings and leisure products. This confirms forecasts that price pressures will increase in the second half of the year and that the Federal Reserve will postpone interest rate cuts until at least October.
Keeping interest rates on hold will also affect oil, as higher borrowing costs could limit economic growth.
Trump vs. Russia
At the same time, Trump’s threats to impose 100% secondary tariffs on Russian oil buyers are supporting prices due to fears that this will disrupt oil trade flows and take some oil off the market.
Analysts at JP Morgan noted on Thursday that Trump’s warning to China and India about penalties for continuing to buy Russian oil potentially jeopardizes 2.75 million barrels per day of Russian maritime oil exports. These two countries are the second and third largest consumers of crude oil in the world, respectively.
“The Trump administration, like its predecessors, is likely to find that sanctioning the world’s second-largest oil exporter is impossible without a sharp rise in oil prices,”
– analysts say.
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