What Global Factors Are Sending Oil Prices Down?

Crude prices fell across global markets on August 29, 2025, as risk-off sentiment prompted investors to trim exposure to asset markets. Both crude and gasoline came under pressure, reflecting growing uncertainty and a reaction to lackluster economic updates.

Weaker-than-expected data weighed on energy demand projections. The US consumer sentiment index and Chicago PMI both surprised to the downside, while notable contractions in Germany’s retail sales and Japan’s industrial production added to global growth fears.

Economic Headwinds Meet Asset Flight

Several economic indicators signaled deeper challenges for energy demand. Germany’s retail sales posted their steepest drop in two years, while US manufacturing sentiment remained subdued.

Japan recorded its worst industrial decline in eight months, amplifying jitters around commodity consumption and price support.

Investors responded by shifting assets away from riskier commodities like oil. The sell-off in equities heightened the move, leaving crude vulnerable to further pricing weakness in the near term.

Did you know?
In the week ending August 22, 2025, Vortexa noted that global crude stored on stationary tankers surged 11% week-over-week, reaching 96.77 million barrels, the highest in months.

Tanker Inventory Swings Compound Pressure

More crude is being stored on stationary tankers worldwide, according to Vortexa’s latest week-over-week data. At 96.77 million barrels, the surge in available supply outpaces immediate demand, exacerbating downward pressure on prices and highlighting imbalances in global shipping and storage.

Additional supply-side concerns stem from OPEC+ decisions to raise output beginning September 1. The bloc aims for a gradual restoration of capacity, which could keep inventories high into 2026 as deferred production comes back online.

ALSO READ | Goldman Sachs predicts oil crash to low $50s by 2026

Geopolitical Tensions and Sanctions Risks

Potential new sanctions on Russian energy exports loom large after calls from European leaders to target companies supporting Moscow. While supply is at risk of short-term disruptions, ongoing war has yet to reverse broader declines in crude futures. The market remains watchful for further developments.

Energy investors now confront a cross-current of macro pressures, highlighting the importance of monitoring both policy and fundamentals in coming weeks.