Oil prices continued to decline on Tuesday as United States President Donald Trump’s decision to pause military aid to Ukraine, upcoming tariffs on Canada, Mexico, and China, and an OPEC+ production increase weighed on market sentiment.
By 3:25 pm AEDT (4:25 am GMT), Brent crude futures dropped $0.49, or 0.7%, to $71.13 per barrel, while U.S. West Texas Intermediate (WTI) crude slipped $0.28, or 0.4%, to $68.09 per barrel.
The White House confirmed on Monday that all U.S. military aid to Ukraine had been paused following Trump’s tense Oval Office meeting with Ukrainian President Volodymyr Zelenskiy last week.
Adding to downward pressure, OPEC+ confirmed plans to increase oil production - the first such output hike since 2022.
The decision, alongside concerns over the economic impact of new U.S. tariffs, led oil prices to drop around to 12-week lows on Monday.
ANZ analysts commented in a note to clients: “Given the economic and geopolitical uncertainties and its need to support oil prices, we had expected OPEC will delay the production hikes planned for early April. It appears pressure from the Trump administration to keep prices lower has won out.
"Given the market was largely expecting another delay, oil prices are likely to remain under downward pressure.”
