Oil prices steadied on Tuesday as threats by U.S. President Donald Trump to impose secondary tariffs on Russian oil and to attack Iran fed supply concerns, but a trade war fed worries that energy demand could slow.
Brent futures were down 4 cents, or 0.05 per cent, at $74.73 a barrel at 12:08 p.m. ET (1608 GMT). The session high was above $75 a barrel. U.S. West Texas Intermediate crude futures fell 6 cents, or 0.08 per cent, to $71.42.
On Monday, the contracts settled at five-week highs.
“The market is supported by Trump’s threatened sanction and secondary tariffs on Venezuela, Iran and Russia,” said Andrew Lipow, president of Houston-based Lipow Oil Associates. But U.S. reciprocal tariffs, effective April 2, may slow global economic growth and dampen energy demand, he said.
Trump on Sunday said he would impose secondary tariffs of 25 per cent to 50 per cent 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.
Trump also threatened Iran with similar tariffs and also with bombings if Tehran did not reach an agreement with the White House over its nuclear program.
“As a result, betting on a clear direction for the market has been – and remains – challenging,” SEB analyst Ole Hvalbye said.
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 repair work at the Caspian Pipeline Consortium terminal will take more than a month.
The market will watch 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 agreed to 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.