Oil prices eased on Monday as markets digested President Donald Trump’s decision to raise a temporary tariff on imports to 15%, a move that analysts and traders said increases uncertainty about global growth and fuel demand.

According to Reuters, Brent fell to about US$71.31 a barrel and US crude to roughly US$65.98 by 2315 GMT, reversing part of last week’s gains that had been driven by rising tensions between the United States and Iran. The tariff increase, announced after the US Supreme Court struck down Mr Trump’s earlier tariff programme, represents the maximum levy permitted under the statute and is scheduled to take effect immediately, with exemptions for critical minerals, metals, pharmaceuticals and USMCA-compliant goods from Canada and Mexico, The Guardian reported on February 21, 2026.

Market participants said the tariff move counterbalanced supply-driven upside from geopolitical risk. “The jump in risk premium linked to potential US–Iran hostilities had pushed benchmarks higher last week; the tariff hike has brought those gains under pressure by dimming the demand outlook,” a trader told Reuters.

The latest tariff step is the most recent in a sequence of policy actions that have unsettled oil markets over the past year. Anadolu Agency coverage in April and January 2025 linked earlier rounds of US reciprocal tariffs to falls in crude as investors feared curbs on trade would sap fuel consumption. Those pieces also noted that planned production increases from several OPEC+ members have repeatedly weighed on sentiment by enlarging near-term supply prospects.

Industry forecasters warn the policy mix could have longer-term consequences for production dynamics. Forbes summarised Wood Mackenzie analysis in May 2025 indicating that sustained price weakness, alongside tariff-driven volatility and cost pressures, risks flattening US oil output in 2025 and prompting a modest decline in 2026 unless prices recover. That outlook underlines how trade policy can ripple through investment decisions in the shale patch and elsewhere.

Analysts said the immediate market response will balance three forces: the demand drag from higher trade barriers, the potential for renewed geopolitical risk to lift risk premia, and OPEC+ supply intentions. “For now, the tariff announcement has tilted the balance toward weaker demand expectations, but any escalation in geopolitical tensions could quickly reverse that,” an oil analyst at a major bank said.

Government and corporate statements surrounding the tariff change emphasise legal constraints and targeted exemptions. According to The Guardian, the administration carved out certain strategic product categories from the blanket increase, a detail traders flagged as limiting but not eliminating broader economic impact.

With prices still sensitive to both policy shifts and geopolitics, market watchers said volatility is likely to persist in the near term as participants reassess consumption forecasts, production plans and the evolving US trade stance.

Source: Noah Wire Services