Crude prices saw a slight recovery on Friday but remained on track for steep weekly declines, weighed down by growing concerns over demand amid new trade tariffs and a potential surge in global supply.

As of 08:50 ET (12:50 GMT), Brent crude futures for October delivery were up 0.6% to $66.85 per barrel, while West Texas Intermediate (WTI) futures rose 0.5% to $64.18 per barrel. Despite the modest uptick, both benchmarks were still over 4% lower for the week.

Worst Weekly Performance Since Late June

The sharp drop in oil this week marks its weakest performance since late June. A key driver has been anxiety over weakening global demand, with recent U.S. tariff actions exacerbating fears that international trade flows—and energy consumption—could cool significantly.

Fresh data indicating a softening U.S. labor market added to those worries, raising doubts about fuel demand in the world’s largest economy. However, ongoing inventory drawdowns in the U.S. have helped limit the downside, suggesting that current consumption remains relatively resilient for now.

OPEC+ Output Moves Keep Supply Risks Elevated

On the supply side, markets are still digesting the latest OPEC+ decision to raise output quotas for September. The alliance continues to unwind supply restrictions put in place over the past three years, increasing fears of a market oversupply.

Geopolitical Focus on Russia-Ukraine Talks

Meanwhile, diplomatic developments involving Russia also weighed on sentiment. On Thursday, Moscow confirmed that President Vladimir Putin is set to meet with U.S. President Donald Trump in the coming days, fueling speculation about a possible breakthrough in the Russia-Ukraine conflict.

Although the prolonged war had previously supported oil markets due to the potential for supply disruptions from Russia, the prospect of a ceasefire has weakened that argument.

“However, it is important to note that President Trump’s deadline for a Russia-Ukraine peace deal expires today, leaving open the risk that the U.S. will still tighten sanctions against Moscow,” analysts at ING said in a note.

The U.S. president also introduced new trade measures this week, imposing up to 50% tariffs on India for its purchases of Russian crude. He has similarly threatened tariffs against China, one of Russia’s top oil buyers.

Amid this uncertainty, some Indian state-owned refiners are reportedly reconsidering their purchases of Russian oil.

“Indian exports to the US dwarf the savings that India receives from buying discounted Russian crude oil. Therefore, we believe that India will likely switch to alternative crude supply in order to avoid these additional tariffs. This should lead to increased demand for other grades from the Middle East, continuing to provide support to Dubai relative to Brent,” ING analysts added.

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