Crude Oil Drops Amid Russia Sanctions Deadline and Looming EU Tariffs

Donald Trump’s 50-day deadline for Russia to end the Ukraine war has created short-term volatility in oil markets. Prices initially spiked on fears of direct sanctions on Russian oil buyers. However, the possibility of a negotiated peace within the deadline has eased immediate supply concerns. Traders now believe sanctions may be avoided, reducing upward pressure on oil prices.

Brent crude oil (BCO) dropped to $69, while WTI crude oil (CL) dropped to $66.80. This decline reflects uncertainty over whether the US will follow through with harsh sanctions. The broader concern is Trump’s trade policies, which add another layer of risk to global demand.

Trump’s plan to impose 30% tariffs on imports from the EU and Mexico starting 1 August raises fears of a global slowdown. These tariffs may hit economic growth and lower fuel consumption. Slower trade and weaker industrial activity typically reduce oil demand, creating downward pressure on prices.

Despite these concerns, oil demand remains firm in the short term. OPEC expects strong demand through Q3, supporting prices near current levels. Additionally, Goldman Sachs raised its oil outlook for H2 2025, citing tight inventories and supply constraints. This suggests that while geopolitical and trade tensions may cause short-term swings, structural supply factors could still support prices.

WTI Crude Oil (CL) Technical Analysis

WTI Oil Daily Chart – High Volatility Amid Russia Sanctions

The daily chart for WTI crude oil shows that the price failed to break above the 200-day SMA and continued lower. The price peaked at the red dotted trendline near $77, then dropped sharply toward the long-term support at $66. This move indicates a negative trend.

The ongoing uncertainty from the Iran-U.S. and Iran-Israel conflicts has added downside pressure to the oil market. Moreover, threats of Russian sanctions further fuel volatility. However, volatility remains high due to geopolitical risks. A break above the $77 level is needed to trigger a further rally toward higher prices.

WTI Oil 4-Hour Chart – Double Top and EU Tariffs

Strong volatility is also observed on the 4-hour chart of WTI crude oil, which shows that a double top has formed near the $77 area. Since then, the price has been trading within a descending broadening wedge pattern, indicating further downside in oil prices.

Uncertainty in the oil market due to the tariff tensions has increased fears of an oil shortage, which may induce strong volatility and make the price direction uncertain. A break below $64 will likely initiate further downside in oil prices.

Natural Gas (NG) Technical Analysis

Natural Gas Daily Chart – Ascending Channel

The daily chart for natural gas (NG) shows that the price is trading within an ascending channel. A brief break below the channel failed to sustain, and the price has recovered back above the 200-day SMA. It is now trending higher toward the $4 area. A break above $3.60 will indicate further upside.

Natural Gas 4-Hour Chart – Consolidation

The 4-hour chart for natural gas shows that the price has been consolidating in a tight range between the $3.00 and $4.70 area. As long as the price remains below $4.70, consolidation is likely to continue. A break below $2.90 is required to trigger further downside. However, a break above $4.70 will initiate a strong upward trend in natural gas prices.

US Dollar Index (DXY) Technical Analysis

US Dollar Daily Chart – Bearish Pressure

The daily chart for the USD Index shows a rebound from the 96.50 support area. The index is trending toward the 50-day SMA resistance near the 98.80 level. A break above 98.80 may trigger further upside toward 100.65. However, the broader Trump-driven trend remains negative, and this rebound could be limited.

US Dollar 4-Hour Chart – Descending Channel

The 4-hour chart for the USD Index shows that the price is attempting to break above the descending channel. A breakout above this channel may push the USD Index toward the 100.50 area. A confirmed break above 100.50 will signal further upside potential.