Oil slides as Trump 15% tariffs hit demand outlook

Brent, WTI fell ~3–5% Monday after Trump’s 15% tariffs and easing Iran war risk.

Oil prices declined sharply on Monday as markets reacted to increased U.S. tariffs and developments in diplomatic negotiations with Iran, factors that analysts said are reshaping near-term expectations for crude demand and supply.

Brent and West Texas Intermediate (WTI) crude both fell, testing key technical support levels, according to market data.

President Donald Trump raised temporary tariffs from 10% to 15% on all U.S. imports over the weekend, according to a White House announcement. The increase followed a U.S. Supreme Court ruling that struck down the previous tariff program.

Financial markets responded with gold prices rising and U.S. equity futures declining. Market analysts stated that oil prices were affected by the same risk-averse trading sentiment. Higher tariffs typically reduce trade volumes, weaken industrial output, and suppress fuel demand, factors that are considered bearish for crude prices, according to commodity analysts.

A third round of nuclear negotiations between the United States and Iran is scheduled for Thursday in Geneva, Oman’s foreign minister confirmed. Iranian officials have indicated the country may offer concessions on its nuclear program in exchange for sanctions relief, according to diplomatic sources.

Concerns about potential military conflict in the Middle East had recently supported higher oil prices, but that geopolitical risk premium has diminished as traders assign a lower probability to supply disruptions from the region, market observers said.

Goldman Sachs forecasts the global oil market will remain in surplus in 2026, assuming no major disruption to Iranian supply, the investment bank stated in a research note. The bank revised its fourth-quarter price forecasts, citing lower inventories among Organisation for Economic Co-operation and Development (OECD) countries as a factor in its WTI adjustment.

Market direction remains uncertain in the short term due to unresolved factors including tariff policy, Iran diplomacy, and the Russia-Ukraine conflict, suggesting continued volatility in oil prices, according to market analysts.