Oil Prices Retreat on Weak U.S. Demand Outlook

Oil Prices Retreat on Weak U.S. Demand Outlook

Oil prices retreated on Wednesday as concerns over US demand weighed on the outlook for the world’s top consumer, while geopolitical and trade risks kept markets on edge ahead of an OPEC+ meeting.

Brent Crude was trading at $68.63 per barrel, down 0.5% from the previous close of $68.97. US benchmark West Texas Intermediate (WTI) fell 0.5% to $64.98 from $65.34 in the prior session.

US manufacturing activity continued to contract in August, with the ISM manufacturing PMI rising slightly to 48.7% from July, but remaining below the expected 49%, signaling ongoing sector weakness.

An appeals court ruled on Friday that most of US President Donald Trump’s tariffs were illegal, challenging the administration’s trade measures. The court delayed implementing its decision until Oct. 14 to allow time for a Supreme Court appeal. Trump said he will request a fast-track ruling to reverse the decision.

Analysts warned that if the tariffs are struck down, the US government could be forced to refund revenue collected from the tariffs, potentially increasing the country’s budget deficit. On the supply side, the US Treasury sanctioned network of companies and vessels led by an Iraqi-Kittian businessman for disguising Iranian oil as Iraqi crude.

These latest sanctions, following the collapse of nuclear talks, are supporting oil futures by signaling tighter supplies. Markets also focused on potential US-India trade talks after Washington raised tariffs on Indian imports from 25% to 50% over its Russian oil purchases.

Saudi Arabia and Iraq reportedly halted crude shipments to a major Russian-backed Indian refinery following EU sanctions in July, potentially disrupting global oil supplies.

Meanwhile, attention is on the upcoming meeting of eight OPEC+ members on Sep. 7. Markets expect members to keep output unchanged after earlier increases, but remain cautious that any further hikes could trigger an oversupply.

Syria Begins Export

Syria resumed heavy crude oil exports from the Tartus terminal on the country’s western coast for the first time in years, the Energy Ministry said. In a statement, the ministry said 600,000 barrels of heavy crude oil were exported on Monday from the Tartus terminal aboard the tanker Nissos Christiana for the benefit of B Serve Energy Company.

The ministry described the shipment as part of government directives and state oil company plans “to strengthen Syria’s presence in foreign oil markets,” saying further export operations are planned in the coming period. The statement hailed the move as an important step in revitalizing the oil sector and expanding cooperation with international companies.

In June, Syria resumed exports of non-crude petroleum products from the Baniyas refinery in Tartus province, sending an initial shipment of 30,000 metric tons to international markets.

Baniyas, about 35 km north of Tartus, is home to Syria’s largest refinery and a specialized oil port.

Before Syria’s civil war in 2011, oil accounted for 20% of the country’s GDP, half of its exports, and more than 50% of state revenues. The country produced 390,000 barrels per day in 2010, but output fell sharply to around 40,000 bpd in 2023.

During 14 years of unrest, Syria relied heavily on Iranian oil shipments for electricity generation, but supplies were cut after the ouster of Bashar al-Assad in December 2024.

Assad, Syria’s leader for nearly 25 years, fled to Russia, ending the Ba’ath Party regime, which had been in power since 1963. A new transitional administration led by President Ahmad al-Sharaa was formed in January. #Oil Price Retreat on Weak U.S. Demand Outlook#Money Market Rates Surge as CBN Tightens Liquidity