Crude oil prices continued to decline on Tuesday (August 5), as investors reacted to a surprise output increase from OPEC+ and growing concerns over weakening global demand amid uncertain economic conditions in major economies.
On August 3, the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known collectively as OPEC+, agreed to increase oil production by 547,000 barrels per day in September 2025, effectively ending their most recent supply cuts earlier than anticipated.
This move added bearish pressure to oil prices, especially as global demand remains fragile and economic indicators continue to show mixed signals.
By the end of trading on August 5:
Brent crude dropped $1.12 (-1.63%) to $67.64 per barrel
WTI crude fell $1.13 (-1.7%) to $65.16 per barrel
Both benchmarks had already fallen over 1% in the previous session (August 4), hitting their lowest levels in a week.
Adding to the market tension, U.S. President Donald Trump renewed threats to impose tariffs on Indian imports on August 4, citing the country’s continued purchases of Russian oil.
India dismissed the threat as "unreasonable" and vowed to protect its economic interests, further straining trade relations between the two nations.
Despite the sharp rhetoric, oil prices saw limited reaction, indicating that investors remain skeptical about any immediate supply disruptions — or whether President Trump would risk triggering another surge in global oil prices.
According to data cited by Reuters, India is currently the largest seaborne importer of Russian crude, averaging 1.75 million barrels per day between January and June 2025 — a 1% increase from the same period last year.
Beyond supply factors, oil prices are under pressure due to growing fears of weaker global demand in the second half of 2025.
JPMorgan warned in a new report that the risk of recession in the U.S. is now very high, as recent macroeconomic data points to a broad-based slowdown.
Meanwhile, China’s Politburo meeting in July 2025 offered no signs of additional stimulus, instead focusing on restructuring and rebalancing the economy, raising doubts about future energy consumption growth in the world’s second-largest economy.
With these uncertainties looming, investors are increasingly cautious, and crude oil continues to trade in a narrow but downward-biased range as markets await clearer signals on both supply and demand dynamics.
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