Oil prices slipped on Monday, heading for a modest quarterly loss, despite a warning from US 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 30 cents, or 0.4%, to $72.46 a barrel by 0330 GMT, while US West Texas Intermediate crude declined 33 cents, or 0.5%, to $69.03 a barrel.
Front-month Brent, which was down 26 cents, or 0.4%, at $73.36, expires later on Monday. Both benchmarks were on track to end the month slightly lower, and post their first quarterly drop in two quarters.
Trump said on Sunday he was “pissed off” at Russian President Vladimir Putin and will impose 25%-50% secondary tariffs on buyers of Russian oil if he feels Moscow is hindering his efforts to end the war in Ukraine.
Trump said he could impose the new trade measures within a month.
“There are a couple of ways to read the headlines and the price sell-off. The first is that the market isn’t buying into Trump’s threats and doesn’t believe it,” IG market analyst Tony Sycamore said.
“The second is that Trump’s threats, if enacted, would be another step down the pathway towards a trade war, which will weigh on global growth and demand for crude oil.”
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. Meanwhile, the OPEC+ group, which comprises OPEC and allies led by Russia, is set to begin its program of monthly increases in oil production in April.
The group will likely continue to raise oil output in May, Reuters reported last week.
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“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 US 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.
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