Oil steadied after U.S. President Donald Trump dialled back comments on Russia that triggered the biggest price jump since January, while markets count down to the arrival of tariffs.
Brent crude for June traded below US$75 a barrel, after the contract gained 2.8% on Monday. U.S. equity futures retreated and gold extended its increase as traders awaited details on Trump’s reciprocal tariff plan, in what he has dubbed “Liberation Day.”
Trump also threatened so-called “secondary tariffs” on buyers of Russian oil, potentially hurting flows from one of the world’s top three producers. But he later softened the tone against President Vladimir Putin. Disruptions would risk widespread ramifications.
Indian refiners have rushed to seek crude supplies in recent days after Trump’s threat of penalties on Russia. That’s added to a more positive short-term outlook for prices, with key timespreads pointing to a tighter market and derivatives tied to the vital North Sea benchmark surging.
“There is a full slate of supply-disrupting themes, most still developing in real time,” RBC analysts including Brian Leisen and Helima Croft wrote in a note.
“That being said, there is now more downside demand risk than many were anticipating at the end of last year. Potential market impacts have effectively become less clear, which has weighed on broad participation in the oil space.”
Crude ended the first quarter of the year almost exactly where it started, despite significant swings in prices as traders were buffeted by conflicting drivers including geopolitical risk, forecasts for a glut and increased supply from OPEC+ from this month.
While tighter sanctions on Iran and Russia could crimp supply, tariffs from the U.S. may hurt global growth and energy demand.
Alex Longley and Yongchang Chin, Bloomberg News
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