Oil prices remained stable on Monday as investors adopted a cautious approach following U.S. President Donald Trump’s threats to impose secondary tariffs on Russian oil buyers and potential military action against Iran if it does not reach a nuclear deal.
By 11:25 GMT, the more active June Brent crude futures rose by 11 cents, or 0.15%, to $72.87 a barrel, while U.S. West Texas Intermediate (WTI) crude gained 8 cents, or 0.12%, reaching $69.44 a barrel. Front-month Brent, trading at $74.06, is set to expire later on Monday.
Oil prices initially fell during the session before recovering and stabilizing at their current levels.
Giovanni Staunovo, an analyst at UBS, noted that the market was closely monitoring Trump’s threat of secondary tariffs on Russian and Iranian oil, though he indicated that these measures were not likely to be implemented immediately. “However, there is a rising risk of larger supply disruptions in the future,” Staunovo added.
Trump’s remarks on Sunday expressed frustration with Russian President Vladimir Putin, stating that he would impose 25%-50% secondary tariffs on buyers of Russian oil if Moscow hindered efforts to end the war in Ukraine. China and India, key buyers of Russian crude, would be crucial to the success of any such sanctions.
In addition, Trump warned Iran with potential military action and secondary tariffs if Tehran failed to reach an agreement with Washington over its nuclear program.
Some analysts believe Trump may not follow through on his threats, which has helped cap oil prices. IG analyst Tony Sycamore suggested that the market does not expect Trump to take action, noting that any tariffs imposed could escalate into a trade war, potentially harming global growth and oil demand.
Several Chinese traders also remained unfazed by the latest threats, with some dismissing Trump’s brinkmanship as routine. “We expect WTI to stay in a range of $65 to $75 for now as the market evaluates the impact of Trump’s tariffs on oil supply, the global economy, and the supply dynamics from the U.S. and OPEC+,” said Yuki Takashima, an economist at Nomura Securities.
Meanwhile, talks regarding the resumption of Kurdish oil exports through the Iraq-Turkey pipeline have faced obstacles due to ongoing disputes over payments and contracts, sources familiar with the matter reported.
