Prices for crude oil are sliding lower amid heightened trade tensions and as U.S. President Donald Trump threatens tighter sanctions on Russia over the war in Ukraine.
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West Texas Intermediate (WTI) crude oil, the U.S. standard, is down 1% and trading at $65.65 per barrel. Brent crude oil, the international benchmark, is down 0.87% and trading at $67.91 a barrel amid negative news on the trade and geopolitical fronts.
The situation is dragging lower the stocks of major oil producers and refiners such as Chevron (CVX), Shell (SHEL), and ExxonMobil (XOM). Crude prices are under pressure after President Trump threatened 35% tariffs on neighboring Canada and 30% tariffs on imports from the European Union (EU) and Mexico starting Aug. 1.
Russian Sanctions and OPEC+
The additional tariffs have heightened trade tensions and risk slowing global economic growth and energy demand. At the same time, President Trump has said he will tighten economic sanctions on Russia unless President Vladimir Putin ends the war in Ukraine within 50 days.
There is media speculation that President Trump will impose new sanctions on Russian energy exports. President Trump could also support a Senate bill that would levy 500% duties on China and India if they make any purchases of Russian crude oil or other energy products.
Additionally, there are reports that OPEC+ is considering a pause in further production increases starting in October, following its next increase in output this September of 548,000 barrels per day. OPEC+ is reportedly growing concerned about a slowdown in global oil demand in the second half of this year that could lead to a supply glut.
Is CVX Stock a Buy?
The stock of Chevron has a consensus Moderate Buy rating among 17 Wall Street analysts. That rating is based on 10 Buy, five Hold, and two Sell recommendations assigned in the last three months. The average CVX price target of $161.59 implies 7.68% upside from current levels.
