Oil prices were little changed on Friday after falling more than 1% in the previous session as traders digested the impact of new higher U.S. tariffs that may curtail economic activity and lower global fuel demand growth.
Brent crude futures rose 4 cents, or 0.06%, to $71.74 a barrel by 1201 GMT.
U.S. West Texas Intermediate crude rose 1 cent, or 0.01%, to $69.27.
Still, Brent prices are set to gain 4.9% for the week while WTI is set to climb 6.4% after U.S. President Donald Trump earlier this week threatened to place tariffs on buyers of Russian crude, particularly China and India, to coax Russia into halting its war against Ukraine.
On Friday though, investors were more focused on Trump’s imposition of new, and mostly higher, tariff rates on U.S. trading partners set to go into effect on August 1.
Trump signed an executive order on Thursday imposing tariffs ranging from 10% to 41% on U.S. imports from dozens of countries and foreign locations including Canada, India and Taiwan that failed to reach trade deals by his deadline of August 1.
Some analysts have warned the levies will limit economic growth by raising prices, which would weigh on oil consumption.
On Thursday, there were signs that existing tariffs are already pressuring prices higher in the U.S., the world’s biggest economy and oil consumer.
U.S. inflation increased in June as tariffs boosted prices for imported goods such as household furniture and recreation products.
This is supporting views that price pressures would pick up in the second half of the year and delay the Federal Reserve from cutting interest rates until at least October.
Maintaining interest rates would also impact oil as the higher borrowing costs can limit economic growth.
At the same time, Trump’s threats to impose 100% secondary tariffs on Russian crude buyers have supported prices because of concerns that would disrupt oil trade flows and remove some oil from the market.
JP Morgan analysts said in a note on Thursday Trump’s warnings to China and India of penalties on their ongoing purchases of Russian oil potentially puts 2.75 million barrels per day of Russian seaborne oil exports at risk.
The two countries are the world’s second- and third-largest crude consumers, respectively.
“The Trump administration, like its predecessors, will likely find sanctioning the world’s second-largest oil exporter unfeasible without spiking oil prices,” the analysts said, referring to Russia.
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