Oil Prices Fall for Third Day on U.S.-EU Trade War Fears

Summary

Oil prices declined for a third con­sec­u­tive ses­sion on July 22, 2025, as esca­lat­ing trade ten­sions between the Unit­ed States and the Euro­pean Union weighed on investor sen­ti­ment and cloud­ed the out­look for glob­al fuel demand. Mar­kets grew increas­ing­ly con­cerned about the poten­tial eco­nom­ic fall­out if pro­posed tar­iffs and retal­i­a­tion mate­ri­al­ize, lead­ing to risk aver­sion and pric­ing pres­sure across ener­gy mar­kets.

Recent Performance and Key Numbers

• Brent crude fell by approx­i­mate­ly 0.75% ($68.69 per bar­rel at 03:25 GMT).
• U.S. West Texas Inter­me­di­ate (WTI) decreased by 0.76% ($66.69 per bar­rel). The active­ly trad­ed Sep­tem­ber WTI con­tract slipped to $65.41, down 0.82%.
• Both bench­marks had closed low­er in pre­vi­ous ses­sions, mark­ing three straight days of declines.

Con­tract	Price (July 22)	Change
Brent Crude	$68.69/bbl	-0.75%
WTI (August Expiry)	$66.69/bbl	-0.76%
WTI (Sep­tem­ber)	$65.41/bbl	-0.82%

Drivers Behind the Decline

1. U.S.-EU Trade Tension Escalation

• The U.S. admin­is­tra­tion has threat­ened a 30% tar­iff on EU imports effec­tive August 1 if a trade deal isn’t reached.
• EU offi­cials are con­sid­er­ing a broad set of poten­tial counter-mea­sures as prospects for an agree­ment fade.
• The loom­ing tar­iff dead­lines and threat of retal­i­a­tion have increased fears that glob­al eco­nom­ic growth could slow, damp­en­ing demand for oil.

2. Demand Concerns

• Ana­lysts warn that high­er trade bar­ri­ers could curb eco­nom­ic activ­i­ty and reduce fuel con­sump­tion in major crude-con­sum­ing regions—the U.S. and Europe.
• Per­sis­tent wor­ries about a slow­down in glob­al growth con­tin­ue to be the dom­i­nant nar­ra­tive in oil mar­kets.

3. Supply Factors

• Pre­vi­ous sup­ply-side risks eased after the June 24 cease­fire between Israel and Iran, reduc­ing the threat of Mid­dle East dis­rup­tions.
• Major oil pro­duc­ers have raised out­put, loos­en­ing mar­ket con­di­tions. OPEC and its allies are unwind­ing vol­un­tary pro­duc­tion cuts, and Sau­di Arabia’s May exports reached a three-month high.

4. Other Market Forces

• A weak­er U.S. dol­lar pro­vid­ed some lim­it­ed sup­port, as crude becomes more afford­able in oth­er cur­ren­cies, but this was over­shad­owed by trade war fears.
• Recent EU sanc­tions on Russ­ian oil have had scant impact on glob­al sup­ply, doing lit­tle to bol­ster prices in the cur­rent envi­ron­ment of demand anx­i­ety.

Analyst and Market Commentary

“Ongo­ing con­cerns about demand remain preva­lent amid ris­ing glob­al trade ten­sions, par­tic­u­lar­ly as mar­kets mon­i­tor the lat­est tar­iff threats from major economies and antic­i­pate poten­tial announce­ments from Trump before the August 1 dead­line.”
— Senior mar­ket ana­lyst at Phillip Nova

“Prices have slipped as trade war con­cerns off­set the sup­port by a soft­er (U.S. dol­lar).”
— IG mar­ket ana­lyst Tony Sycamore

“With glob­al eco­nom­ic uncer­tain­ty ris­ing, oil prices may con­tin­ue to feel down­ward pres­sure.”
— Angel One Mar­kets com­men­tary

Outlook for Oil Markets

• Bear­ish sen­ti­ment pre­vails as investors antic­i­pate fur­ther tar­iff announce­ments, OPEC+ out­put increas­es, and lack­lus­ter demand fore­casts.
• Key mar­ket cat­a­lysts in the com­ing days include:
  • Updates on U.S.-EU trade nego­ti­a­tions ahead of the August 1 dead­line.
  • U.S. Ener­gy Infor­ma­tion Admin­is­tra­tion (EIA) inven­to­ry reports for fresh demand/supply sig­nals.
  • Ongo­ing devel­op­ments in U.S. and EU eco­nom­ic indi­ca­tors and cen­tral bank poli­cies.

Conclusion

Oil prices have extend­ed their slide for a third con­sec­u­tive ses­sion as the threat of a U.S.-EU trade war stirs deep con­cerns about glob­al eco­nom­ic prospects and fuel demand. While sup­ply risks have reced­ed and the dollar’s weak­ness has only part­ly cush­ioned the fall, the pre­vail­ing mood in oil mar­kets remains cau­tious. Unless a break­through emerges to ease trade ten­sions or eco­nom­ic indi­ca­tors improve, the risk of sus­tained down­ward pres­sure on crude prices is like­ly to per­sist.