
Oil rose after US President Donald Trump suggested that the US may work to curtail crude shipments from Russia, the world’s third-largest producer and a major exporter.
West Texas Intermediate climbed 3.1% to settle above $71 a barrel, the biggest gain since before Trump took office, while Brent’s June contract approached $75. Crude extended its advance on data showing lower-than-expected US production and positioning changes from algorithmic traders.
NBC News reported on Sunday that Trump said he was “very angry” at Russian President Vladimir Putin and would consider “secondary tariffs” to limit the country’s oil exports if it refuses a ceasefire with Ukraine. Any concerted attempt to punish Putin could have a far-reaching effect on the broader crude market. India and China, which have become the key buyers since Moscow’s full-scale invasion of Ukraine, would face particular pressure.
“The market seems to be weighing whether demand risks or supply risks are the bigger concern,” said Rebecca Babin, senior energy trader at CIBC Private Wealth Group. “For now, supply fears are taking the lead, but if broader risk assets continue to weaken, crude may eventually succumb to demand worries.”
Adding to concerns about tight supplies, the Energy Information Administration reported that US production fell to 13.15 million barrels a day in January, the lowest in 11 months and less than estimated in weekly figures. Meanwhile, commodity trading advisers, which tend to exacerbate price swings, liquidated short positions to sit at 27% short in WTI, compared with 54% short on March 26, according to data from Bridgeton Research Group.
Crude also benefited as the S&P 500 pared losses and eventually turned positive for the day.
Russia’s crude exports hit a five-month high in March, and US sanctions on the nation’s oil tanker fleet are showing signs of faltering. Trump also said he’s considering punishing Tehran with unspecified “secondary tariffs” and vowed to inflict “real pain” on Iran if the Houthi military group does not halt attacks on American ships.
Oil Prices:
- WTI for May delivery rose 3.1% to settle at $71.48 a barrel in New York.
- Brent for June settlement climbed 2.8% to settle at $74.77 a barrel.
- The May contract, which expires on Monday, advanced to $74.74 a barrel.
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