Crude Oil Prices Head for Second Weekly Drop Amid US Tariff Volatility

On Friday, May 30, 2025, Crude Oil prices were poised for a second straight weekly decline, as markets reacted to anticipated increases in OPEC+ production and renewed trade uncertainty stemming from a U.S. court ruling that keeps President Donald Trump's tariffs intact.

By 0424 GMT, Brent crude futures had dipped 31 cents, or 0.48%, to $63.84 a barrel, while U.S. West Texas Intermediate (WTI) crude slipped 31 cents, or 0.51%, to $60.63 a barrel. The Brent July futures contract is set to expire later in the day. Both benchmarks are down approximately 1.5% this week. At 10:40 AM IST, Brent crude futures were down 0.47% to $63.85 per barrel.

OPEC+ Output Hike Weighs on Market Sentiment

The bearish momentum has largely been driven by expectations that the Organisation of the Petroleum Exporting Countries and its allies—collectively known as OPEC+—will move forward with another production increase. Eight member nations are scheduled to meet on Saturday, and markets are already pricing in the likelihood of expanded output.

U.S. Tariff Uncertainty Adds to Volatility

In the United States, trade tensions resurfaced after a federal appeals court temporarily reinstated a sweeping set of tariffs, reversing a lower court’s decision just one day earlier. The decision preserves duties originally imposed by the Trump administration and has injected renewed uncertainty into global markets.

Oil prices had already fallen more than 1% on Thursday in response to the initial ruling, and analysts warn that continued legal battles over tariffs could keep markets on edge.

Tariffs Drive Steep Decline in Crude Oil Prices Since April

Since Trump’s announcement of the “Liberation Day” tariffs on April 2, oil prices have dropped more than 10%. The return of these tariffs has sparked investor concern over reduced trade flow and potential economic fallout.

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Demand Outlook Darkens Amid Recession Fears

On the demand side, the outlook remains clouded by recession concerns, amplified by the escalating U.S.-China trade conflict. In a further blow to trade relations, Washington has ordered a broad suspension of shipments of key petrochemical products—including ethane and butane—to China without specific licenses. Additionally, it revoked existing export licenses for several suppliers.

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