Oil slips amid tariff uncertainty

Singapore — Oil prices fell on Monday as concern about the effect of US import tariffs on global economic growth and fuel demand, as well as rising output from Opec+ producers, cooled investor appetite for riskier assets.

Brent crude fell 31c, or 0.4%, to $70.05 a barrel by 4.45am GMT after settling up 90c on Friday. US West Texas Intermediate (WTI) crude was at $66.69 a barrel, down 35c, or 0.5%, after closing 68c higher in the previous trading session.

WTI declined for a seventh successive week, the longest losing streak since November 2023, while Brent was down for a third consecutive week after US President Donald Trump imposed then delayed tariffs on its key oil suppliers Canada and Mexico while raising taxes on Chinese goods. China retaliated against the US and Canada with tariffs on agricultural products.

“Tariff uncertainty is a key driver behind the weakness,” ING analysts said in a note, adding that oil price cuts from Saudi Arabia and deflationary signals from China also hurt sentiment.

IG analyst Tony Sycamore said other factors weighing on oil prices include concerns about US growth, the potential lifting of US sanctions on Russia, and Opec+ opting to increase output.

“Nonetheless, with much of the bad news likely factored in, we expect weekly support around $65/$62 to hold firm before a recovery back to $72.00,” he said in a client note in reference to the WTI price.

Oil prices clawed back some loss on Friday after Trump said the US would increase sanctions on Russia if the latter failed to reach a ceasefire with Ukraine.

The US is also studying ways to ease sanctions on Russia’s energy sector if Russia agrees to end its war with Ukraine, two people familiar with the matter told Reuters.

Meanwhile, oil cartel Opec and allies including Russia, collectively known as Opec+, said it would proceed with oil output hikes from April.

Russian deputy prime minister Alexander Novak on Friday said Opec+ could reverse the decision in the event of market imbalance.

Adding to supply concerns, Saudi Arabia cut prices for crude grades it sells to Asia for the first time in three months in April.

Last week, Trump said he wanted to negotiate a deal with Opec member Iran to prevent the latter seeking nuclear weapons — though Iran has said it is not seeking such weapons.

Trump was pursuing a “maximum pressure” campaign against Iran under which the US on Saturday rescinded a waiver that allowed Iraq to pay Iran for electricity, a state department spokesperson said.

Iran’s supreme leader, Ayatollah Ali Khamenei, on Saturday said his country would not be bullied into negotiations.

Reuters