LONDON: Oil prices steadied near five-week highs on Tuesday as threats by U.S. President Donald Trump to impose secondary tariffs on Russian crude and attack Iran countered worries about the impact of a trade war on global growth.
Brent futures were up 9 cents, or 0.1%, at $74.86 a barrel at 0926 GMT, after rising to above $75 a barrel earlier in the session. U.S. West Texas Intermediate crude futures rose 8 cents, or 0.1%, to $71.56.
The contracts settled at five-week highs a day earlier.
“While stricter sanctions on Iran, Venezuela, and Russia ould constrain global supply, the U.S. tariffs are likely to dampen global energy demand and slow economic growth, which in turn will affect oil demand further out on the curve,” SEB analyst Ole Hvalbye said.
“As a result, betting on a clear direction for the market has been – and remains – challenging,” he added.
Trump on Sunday told NBC News that he was very angry with Russian President Vladimir Putin and would impose secondary tariffs of 25% to 50% on Russian oil buyers if Moscow tried to block efforts to end the war in Ukraine.
Tariffs on buyers of oil from Russia, the world’s second largest oil exporter, would disrupt global supply and hurt Moscow’s biggest customers, China and India.
Oil approaches one-month highs
Trump also threatened Iran with similar tariffs and bombings if Tehran did not reach an agreement with the White House over its nuclear program.
A Reuters poll of 49 economists and analysts in March projected that oil prices would remain under pressure this year from U.S. tariffs and economic slowdowns in India and China, while OPEC+ increases supply.
Slower global growth would dent fuel demand, which might offset any reduction in supply due to Trump’s threats.
Prices found some support after Russia ordered Kazakhstan’s main oil export terminal to close two of its three moorings amid a standoff between Kazakhstan and OPEC+ – the Organization of the Petroleum Exporting Countries, plus allies led by Russia – over excess production.
Kazakhstan will have to start cutting oil output as a result, two industry sources told Reuters. Another source said that repair work at the Caspian Pipeline Consortium terminal will take more than a month.
The market will be watching an April 5 OPEC+ ministerial committee meeting to review policy. Sources told Reuters OPEC+ was on track to proceed with a production hike of 135,000 barrels per day in May. OPEC+ had already agreed a similar hike in production for April.
Meanwhile, five analysts surveyed by Reuters estimated on average that U.S. crude inventories fell by about 2.1 million barrels in the week to March 28.
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