Published by Global Banking & Finance Review®
Posted on May 29, 2025
4 min readLast updated: January 23, 2026
Add as preferred source on GoogleOil prices dropped over 1% as investors reacted to a US court ruling blocking Trump's tariffs. OPEC+ production decisions and potential sanctions on Russian crude also influenced the market.
By Stephanie Kelly
NEW YORK (Reuters) -Oil prices fell over 1% on Thursday, retreating from earlier gains, as investors weighed the potential effects of a U.S. court ruling that blocked the most sweeping of President Donald Trump's tariffs.
The market also watched for potential new U.S. sanctions curbing Russian crude flows and an OPEC+ decision on hiking output in July.
Brent crude futures settled down 75 cents, or 1.2%, to $64.15 a barrel. U.S. West Texas Intermediate crude fell 90 cents, or 1.5%, to $60.94 a barrel.
Prices had earlier risen after a U.S. court on Wednesday ruled that Trump overstepped his authority by imposing across-the-board duties on imports from U.S. trading partners. The court was not asked to address some industry-specific tariffs Trump has issued on automobiles, steel and aluminium using a different statute.
Futures steadily retreated throughout the session, however, as senior Trump administration officials downplayed the impact of the ruling and insisted there are other legal avenues to employ.
"The initial market reaction to the U.S. trade court's Trump reciprocal tariffs dissipated appreciably as the session progressed," Jim Ritterbusch of U.S. energy consultancy Ritterbusch and Associates said in a note.
"One interpretation of this response could be that not much has changed and that the uncertainty surrounding the Trump tariffs from day one will continue as the tariffs work their way through the court system and several sectoral tariffs such as autos and auto parts remain intact."
Weighing on oil futures on Thursday, IEA Executive Director Fatih Birol said in an interview with Bloomberg that demand for oil was considerably weak in China and developments in Russia and Iran were "question marks" for oil prices.
The U.S. and Iran are holding talks meant to rein in Iranian nuclear activities that have rapidly accelerated since Trump pulled Washington out of a 2015 deal between Iran and major powers that strictly limited those activities.
"We've seen a lot of back and forth concerns about the Iran situation, whether we’re getting closer to a conflict or a peace deal," said Phil Flynn, senior analyst with Price Futures Group. "We’re moving technically and emotionally right now in a lot of these markets."
OPEC+ IN FOCUS
On the oil supply front, the Organization of the Petroleum Exporting Countries and allies, together called OPEC+, could agree on Saturday to accelerate oil production hikes in July.
"We're assuming the group will agree on another large supply increase of 411,000 barrels per day. We expect similar increases through until the end of the third quarter, as the group increases its focus on defending market share," ING analysts said in a note.
However, there are also concerns about potential new sanctions on Russian crude.
Adding to supply risks, Chevron has terminated its oil production and a number of other activities in Venezuela, after its key license was revoked by the Trump administration in March.
Venezuela in April cancelled cargoes scheduled to Chevron, citing payment uncertainties related to U.S. sanctions. Chevron was exporting 290,000 bpd of Venezuelan oil, or over a third of the country's total, before that.
"From May through August, the data points to a constructive, bullish bias with liquids demand set to outpace supply," Mukesh Sahdev, global head of commodity markets at Rystad Energy, said in a note, expecting demand growth to outpace supply growth by 600,000 to 700,000 bpd.
Oil futures on Thursday pared some losses after Energy Information Administration data showed U.S. crude inventories posted a surprise draw in the latest week, falling by 2.8 million barrels to 440.4 million barrels. Analysts had expected a 118,000-barrel rise. [EIA/S]
In Canada, a wildfire in the province of Alberta has forced residents of a small town to evacuate and prompted a temporary shutdown of some oil and gas production, which could reduce supply.
(Reporting by Stephanie Kelly in New York, Anna Hirtenstein in London, Katya Golubkova in Tokyo and Emily Chow in Singapore. Editing by Nick Zieminski, Nia Williams and Lisa Shumaker)
Oil prices fell over 1% as investors assessed the implications of a U.S. court ruling that blocked President Trump's tariffs, alongside concerns about potential new sanctions on Russian crude.
The initial market reaction to the ruling was positive, but it dissipated as officials from the Trump administration downplayed its impact, indicating that legal avenues remain.
OPEC+ is expected to agree on a significant supply increase of 411,000 barrels per day during their upcoming meeting, with similar increases anticipated through the end of the third quarter.
Concerns about the Iran situation and ongoing talks regarding its nuclear activities, as well as potential sanctions on Russian crude, are contributing to the uncertainty in oil markets.
The Energy Information Administration reported a surprise draw in U.S. crude inventories, which fell by 2.8 million barrels, providing some support to oil futures on Thursday.
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