By: TPA News Desk | Business News | www.thepointafricanews.com/africa/business

Oil prices declined on Tuesday as escalating concerns over a potential trade war between major crude consumers, the United States and the European Union, weighed heavily on investor sentiment. Analysts warn that the brewing transatlantic dispute could significantly curb global fuel demand growth by stifling economic activity.

Brent crude futures fell 52 cents, or 0.75%, to $68.69 a barrel by early trading in Asia. U.S. West Texas Intermediate (WTI) crude for August delivery, which expires on Tuesday, was down 51 cents, or 0.76%, at $66.69 a barrel, while the more active September contract dropped 54 cents, or 0.82%, to $65.41 a barrel.

The dip in prices comes as markets react to the looming August 1 deadline, by which the U.S. has threatened to impose a sweeping 30% tariff on European Union imports if a new trade agreement is not finalized. European Union diplomats, in turn, are reportedly exploring a broader range of possible retaliatory measures should negotiations fail, raising fears of a full-blown trade conflict between two of the world’s largest economies.

“The trade deal impasse could hurt economic activity and thus crude oil demand,” warned analysts from ANZ in a recent note, a sentiment echoed across various financial institutions. The prospect of increased tariffs on both sides of the Atlantic is seen as a direct threat to global supply chains and consumer spending, which directly impacts energy consumption.

The current market uncertainty extends beyond trade tensions. The oil market has struggled to find clear direction since a ceasefire in June ended the conflict between Israel and Iran, which had previously alleviated concerns about major supply disruptions in the Middle East. Additionally, increasing supply from the Organization of the Petroleum Exporting Countries (OPEC) and its allies as they unwind output cuts further adds to investor worries about an oversupplied global market if demand weakens.