(Investing) – Oil prices slipped lower Tuesday, continuing the previous session’s selloff after U.S. President Donald Trump provided Russia with additional room to end the Ukraine war before taking action.
At 07:45 ET (11:45 GMT), expiring in September ticked down 0.1% to $69.10 per barrel, while fell 0.2% to $66.88 per barrel.
After an initial rally, oil prices closed nearly 2% lower on Monday as Trump refrained from harsher, immediate action against Russia despite promising a “major statement” on Russia.
Trump gives Russia sanctions space
Trump on Monday issued a 50-day deadline for Russia to secure a peace deal in Ukraine, threatening “secondary sanctions” on any country that continues importing Russian oil if Moscow fails to comply.
The initial reaction sent crude prices higher, but they later eased as traders assessed when and how these sanction mechanisms would actually be enforced.
“The lack of any immediate action and the belief that these threats won’t be carried out help to explain the market reaction,” ING analysts said in a note.
“However, if Trump does follow through, and the tariff is implemented effectively, it would drastically change the outlook for the oil market. Russia exports more than 7m b/d of and refined products,” they said.
China, India and Turkey are the largest buyers of Russian crude oil.
“OPEC’s spare production capacity would not be able to fill the entire shortfall. This would present significant upside to oil prices. Given Trump’s desire for low oil prices, we don’t believe Trump would be keen to follow through with this threat,” ING analysts added.
China GDP beats forecast
Helping provide support, data on Monday showed that China’s expanded 5.2% year-on-year in the second quarter of 2025, slightly above market expectations of 5.1%, supported by resilient exports and government stimulus.
Separate data for both and retail sales for June were also released on Tuesday.
Factory output jumped sharply above forecasts, while retail sales came in lower than expected.
“Trade data from China for June showed a rebound in crude oil imports,” said ING. “Crude oil flows increased by a little more than 7% year on year to 12.2m b/d, which was also up more than 10% month on month. This leaves cumulative imports so far this year 1.4% higher YoY. The stronger imports in June were likely a result of more refineries returning to operation following spring maintenance.”
Tariffs in spotlight
Investors are also digesting the global trade situation after U.S. President Donald Trump said last week that he would impose a 30% tariff on most imports from the European Union and Mexico from August 1.
In response, media reports on Monday showed that the EU has finalized a new list of potential tariffs targeting $84 billion worth of U.S. goods, escalating the threat of a trade clash with Washington.
Earlier in the week, Trump announced new tariffs on a number of countries, including Japan, South Korea, Canada, and Brazil, along with a 50% tariff on , all effective August 1.
Tariffs raise the risk of slower economic growth, which could reduce global fuel demand and drag oil prices lower.
Ayushman Ojha contributed to this article
