Oil prices have fallen, driven by escalating trade tensions between China and the US, which have dampened the appetite for risk assets. West Texas Intermediate (WTI) crude dropped by 1.3 per cent on Tuesday, settling near $US59 a barrel, marking its lowest level since May. Brent crude prices also hovered near $US62 a barrel.
The decline comes amid increasing friction between Beijing and Washington. China has placed limitations on five US entities, including one of South Korea’s largest shipbuilders, in the latest round of retaliatory measures. Further actions are threatened as the trade dispute intensifies, creating uncertainty in the market and impacting investor sentiment regarding economic growth and stability.
Adding to the downward pressure on prices, the International Energy Agency (IEA) has increased its forecast for a record crude oil surplus in 2026. The Paris-based agency projects that global crude supplies will exceed demand by almost 4 million barrels a day next year. This unprecedented oversupply represents a record overhang in annual terms, according to the IEA’s latest report.
