Oil held a decline on Tuesday amid concerns the brewing trade war between major crude consumers the U.S. and the European Union will curb fuel demand.
Brent crude futures for September delivery fell 0.7 percent to $68.73 a barrel in European trade, while WTI crude futures for September delivery were down 0.7 percent at $65.49.
A cautious undertone prevailed as investors looked for any signs of progress in talks ahead of a key deadline that could bring steep tariffs for U.S. trading partners that fail to strike deals.
The proposed duties include a 25 percent levy on Japan, a 35 percent tariff on Canada, and a 50 percent duty on Brazil.
Media reports suggest that the European Union is preparing to respond with a suite of retaliatory measures under its Anti-Coercion Instrument (ACI) following U.S. President Donald Trump's threat to impose a 30 percent tariff on EU goods from 1 August.
Elsewhere, the prospect of an interim trade deal between the U.S. and India before the August 1 deadline have dimmed due to persistent disagreements over key agricultural and dairy products.
Analysts warn that the trade deal impasse could hurt economic activity and thus crude oil demand.
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Market Analysis
December 26, 2025 08:42 ET Third quarter economic growth data from some major economies including the U.S. were the main news in this holiday shortened week. GDP growth and industrial production data from the U.S. helped to boost morale, while the consumer confidence survey results were less upbeat. In Europe, the quarterly economic growth data from the U.K. drew attention, while the minutes of the Australian central bank’s latest policy session was in focus in Asia.