Oil prices remained largely flat on August 1, 2025, as traders weighed the economic impact of fresh U.S. tariffs against persistent concerns about disruptions to Russian crude supplies. This tug-of-war kept energy markets cautious following a sharp 1% drop in the previous session.

Brent crude futures edged up by 4 cents to $71.74 a barrel, while U.S. West Texas Intermediate (WTI) rose just 1 cent to $69.27, as of 1201 GMT. Despite Friday's muted movement, both benchmarks are on track for strong weekly gains—Brent up 4.9% and WTI surging 6.4%.

The earlier part of the week was dominated by geopolitical headlines, after U.S. President Donald Trump threatened tariffs on buyers of Russian oil, targeting major importers like India and China in a bid to intensify pressure on Moscow amid the Ukraine conflict. The move sparked fears of potential supply constraints, temporarily lifting crude prices.

However, investor focus has shifted to the broader macroeconomic implications of Trump’s new, sweeping tariff hikes on U.S. trading partners. These measures are expected to slow global trade, potentially reducing oil consumption and demand growth. Additionally, concerns around elevated interest rates and sluggish economic expansion are also capping the upside in crude.

Traders remain cautious, balancing geopolitical supply risks against the dampening effect of tariffs and tightening financial conditions on global fuel demand. The next moves in both oil markets and monetary policy will be key to the direction of energy prices in the coming weeks.