Oil Markets Drop on Trade Tensions, but Fundamentals Hold Steady

• Tariff volatility is disrupting markets, but fundamentals remain steady. The recent selloff in oil prices is driven more by headline anxiety than long-term structural shifts in demand or supply.• Diesel demand holds while gasoline weakens. While gasoline demand has shown early signs of softening, diesel consumption remains above last year’s levels, pointing to a more stable industrial and freight environment.• Supply response may set the floor. With U.S. shale breakevens near $65 per barrel, current prices under $60 are unsustainable long-term and could prompt production cutbacks that rebalance the market.