Oil Prices Ease Despite Trump’s Warning on Russian Tariffs
Oil Prices Decline Amid Market Caution
Oil prices saw a slight decline on Monday, heading toward a modest quarterly loss despite U.S. President Donald Trump’s warning of potential secondary tariffs on buyers of Russian oil.
- The June Brent crude futures dropped $0.17 (0.2%), settling at $72.59 per barrel.
- West Texas Intermediate (WTI) crude also dipped $0.18 (0.3%), reaching $69.18 per barrel.
- The front-month Brent contract, expiring later in the day, edged up $0.08 (0.1%) to $73.71 per barrel.
Both crude benchmarks closed lower on Friday but managed a third consecutive weekly gain. However, for the month, oil prices remained nearly flat, marking the first quarterly decline in two quarters.
Trump’s Threat of Tariffs on Russian Oil Buyers
President Trump expressed frustration over Russia’s stance on the Ukraine conflict, threatening new tariffs on nations purchasing Russian oil.
- He stated he was “pissed off” at President Vladimir Putin and could impose tariffs between 25% to 50% on Russian crude buyers.
- Trump indicated that these tariffs could be implemented within a month if Russia continued to obstruct ceasefire efforts.
Despite these strong statements, investors remained skeptical about the feasibility of such measures and their impact on global oil supply.
Market Awaits OPEC+ Production Increase
The OPEC+ alliance, comprising OPEC members and Russia-led allies, is set to increase oil production in April, adding further uncertainty to price movements.
- Analysts predict that OPEC+ will continue raising output in May, as reported by Reuters.
- This expected supply boost is counteracting concerns over potential disruptions from Trump’s tariff threats.
According to Yuki Takashima, an economist at Nomura Securities, Trump’s remarks failed to lift oil prices, as market participants weighed the impact of the OPEC+ production hike alongside global economic conditions.
Saudi Arabia May Cut Oil Prices for Asia
Top oil exporter Saudi Arabia may lower its crude prices for Asian buyers in May to a three-month low, following recent benchmark price declines.
- This move is likely aimed at maintaining competitiveness amid shifting global oil demand.
Kurdish Oil Exports Remain Stalled
Talks to restart Kurdish oil exports via the Iraq-Turkey pipeline have faced further delays, sources told Reuters.
- Disagreements over payment terms and contract clarity have stalled negotiations.
- This ongoing dispute has resulted in a two-year halt in crude exports from Iraqi Kurdistan to Turkey’s port of Ceyhan.
Trump’s Stance on Iran Adds to Market Uncertainty
Beyond Russia, Trump also issued a warning to Iran, threatening bombing and secondary tariffs if Tehran fails to negotiate with Washington over its nuclear program.
- These tensions introduce another geopolitical risk that could impact global energy markets.
With multiple factors influencing supply and demand, analysts expect WTI crude to fluctuate between $65 and $75 per barrel in the near term, as investors assess the broader market impact of U.S. policies and OPEC+ production changes.