Oil prices continued their decline for a second consecutive day as markets braced for a potential output hike from OPEC+, while escalating tariff threats from US President Donald Trump dampened investor sentiment across broader markets.
West Texas Intermediate (WTI) crude dropped below $67 per barrel on Friday, extending a 0.7% fall from the previous session. According to OPEC+ delegates, the alliance is considering accelerating the return of supply, with a possible increase of over 411,000 barrels per day for August to be discussed at a key meeting on Saturday.
At the same time, global equity markets slipped as trade tensions resurfaced. President Trump announced plans to send formal notices to trading partners, outlining new unilateral tariff rates set to take effect in August, with a July 9 deadline for negotiations. The move added to existing uncertainty already weighing on global risk appetite.
Oil markets, which have been highly volatile in recent weeks, were initially rattled by fears of supply disruptions stemming from the Israel-Iran conflict. Although immediate concerns have eased, investors remain wary of unresolved geopolitical and economic flashpoints, including renewed US-Iran nuclear talks, ongoing OPEC+ policy shifts, and intensifying trade disputes.
“The absolute fundamentals of the market are taking over,” said Susan Bell, Senior Vice President for Downstream Research at Rystad Energy. “Risk premiums have largely been priced out, and underlying demand fundamentals remain weak.”
Meanwhile, Washington is preparing to reopen nuclear negotiations with Iran. Axios reports that US envoy Steven Witkoff is expected to meet Iranian Foreign Minister Abbas Araghchi in Oslo next week. However, the US is also increasing pressure on Tehran with new restrictions on Iranian oil trade.
Elsewhere, in Canada, wildfires have reemerged near Fort McMurray, just 20 kilometers from a major oil sands production site. The province of Alberta saw its oil output fall to a two-year low in May. This, combined with declining production in Mexico and a US ban on Venezuelan crude, has bolstered prices for heavier grades of crude oil.
