Oil Prices Fall Amid Trade Concerns and Developments in Russia-Ukraine Conflict

Global oil prices extended their losses during Asian trading on Tuesday, amid persistent uncertainty over U.S. trade tariffs, which has clouded the global economic outlook and fueled fears of slowing oil demand.

Additionally, oil prices faced downward pressure after Russia unexpectedly announced a three-day ceasefire with Ukraine, potentially paving the way for a broader peace agreement.

1. Brent and WTI Futures Decline

As of 21:43 ET (01:43 GMT), Brent crude futures for June delivery fell 0.4% to $65.63 per barrel, while West Texas Intermediate (WTI) crude dropped 0.3% to $61.64 per barrel.

The oil market remains cautious ahead of the upcoming OPEC+ meeting next week, where the group is widely expected to raise output for the second consecutive month.

2. Trade Tariff Uncertainty and U.S.-China Trade War Weigh on Demand Outlook

Oil prices have suffered significant losses in 2025, recently hitting their lowest levels in over four years, as growing disruptions to global trade continue to threaten demand.

The ongoing trade war between the United States and China, two of the world's largest oil consumers, shows no signs of easing. Meanwhile, U.S. President Donald Trump appears poised to implement additional sweeping tariff measures, despite reports from the Wall Street Journal suggesting he may seek to soften the impact of higher auto tariffs.

Concerns over slowing global demand, amid rising economic uncertainty, have exerted heavy pressure on oil prices in recent months. Furthermore, Trump's calls for increased U.S. energy production to lower prices have added to the volatility in crude oil markets.

3. Russia Announces Surprise Three-Day Ceasefire with Ukraine

Geopolitical developments have also played a crucial role in driving oil prices lower. Russia recently announced a surprise three-day ceasefire with Ukraine, scheduled from May 8 to May 10, in commemoration of the 80th anniversary of the Soviet Union’s victory in World War II.

The ceasefire has sparked cautious optimism that Russia remains open to a peaceful resolution, although U.S.-brokered ceasefire negotiations appear to have stalled. Ukraine has called for a longer 30-day ceasefire, while Washington has signaled its desire for a permanent truce between the two nations.

A sustained de-escalation in the Russia-Ukraine conflict could eventually lead to the easing of stringent U.S. sanctions on Moscow’s oil industry, potentially releasing additional global supply and exerting further downward pressure on oil prices.

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