Oil prices eased on Monday and headed for a modest quarterly loss, despite a warning from U.S. President Donald Trump that he may impose secondary tariffs on buyers of Russian oil if he feels Moscow is blocking his efforts to end the war in Ukraine.
The more active June Brent crude futures fell 21 cents, or 0.3 per cent, to $72.55 a barrel by 0710 GMT, while U.S. West Texas Intermediate crude declined 27 cents, or 0.4 per cent, to $69.09 a barrel. Front-month Brent, which was down 12 cents, or 0.2 per cent, at $73.51, expires later on Monday.
Both benchmarks were on track to end the month slightly lower and to post their first quarterly drop in two quarters.
“(Trump’s) threat on secondary tariffs on Russia and Iranian oil is a factor oil market participants are tracking, although he has indicated he is not planning to introduce them for now,” said UBS analyst Giovanni Staunovo. “But, there is a rising risk of larger supply risks down the road.”
Trump said on Sunday he was “pissed off” at Russian President Vladimir Putin and will impose 25 per cent-50 per cent secondary tariffs on buyers of Russian oil if he feels Moscow is hindering his efforts to end the war in Ukraine.
Trump also threatened Iran on Sunday with bombing and secondary tariffs if Tehran did not come to an agreement with Washington over its nuclear program.
IG analyst Tony Sycamore said the oil price declined despite Trump’s comments because the market did not believe he would follow through with his threats and if enacted, they would be another step toward a trade war that would weigh on global growth and demand for crude oil.
The OPEC+ group, which comprises OPEC and allies led by Russia, is set to begin its programme of monthly increases in oil production in April. The group will likely continue to raise oil output in May, Reuters reported last week.
“We expect WTI to stay in a range of $65 to $75 for now as the market assesses the impact of Trump tariffs on oil supply and global economy, as well as the supply situation from the U.S. and OPEC+,” said Yuki Takashima, an economist at Nomura Securities.
Top oil exporter Saudi Arabia may lower its crude prices for Asian buyers in May to a three-month low, tracking the steep declines in benchmark prices this month, traders said.
Elsewhere, Iran has lowered the price of its light crude oil grade for Asian buyers to $3.95 a barrel above the Oman/Dubai average for April.
Talks to restart Kurdish oil exports through the Iraq-Turkey pipeline have hit a snag as a lack of clarity over payments and contracts persists, two sources with direct knowledge of the matter told Reuters.
