Oil Steadies as Tariff Delay Offsets Lower Risk to Russian Flows
Oil settled little changed, rebounding from the lowest since December, as a hazy timeline surrounding US President Donald Trump’s plans to impose reciprocal tariffs counteracted potentially easing risks to Russian supplies.
West Texas Intermediate ended the session fractionally lower near $71 a barrel after Trump directed his administration to propose new levies on a country-by-country basis that could take weeks or months to complete. The delay reduced concerns that the levies will hamper demand and sparked speculation Trump may not follow through on the measures.
Crude had earlier dropped as low as $70.22 after Trump and Russian President Vladimir Putin agreed to talks on ending the war in Ukraine. A Kremlin spokesperson confirmed that Ukraine will participate in peace talks, raising the prospect that sanctions imposed by the Biden administration may be lifted and that Ukrainian drone attacks on Russia’s industry will abate, allowing Moscow’s crude to again flow freely.
“A potential resolution could significantly ease war-related costs, particularly in the energy sector,” City Index and Forex.com analyst Fawad Razaqzada wrote in a note. In regards to Trump’s tariff threats, “markets have so far taken them as merely a negotiating ploy.”
Trump’s various trade measures have also weighed on sentiment and prices over the past three weeks. The president’s policies risk stoking volatility in global markets and have the potential to create supply-demand imbalances that aren’t reflective of fundamentals, OPEC said in a monthly report on Wednesday. The release also showed that several members are better implementing supply curbs.
WTI for March delivery fell 8 cents to settle at $71.29 a barrel in New York. Brent for April settlement fell by 16 cents to settle at $75.02 a barrel.
Source : Bloomberg
