Oil prices went down by more than $1 on Monday as investors weighed new threats from US President Donald Trump for sanctions on buyers of Russian oil that may affect global supplies, while still worried about tariffs by the Donald Trump administration.
Brent crude declined by $1.15 or 1.63 per cent to $69.21 per barrel and the US West Texas Intermediate (WTI) crude lost $1.47 or 2.15 per cent to close at $66.98 a barrel.
President Trump announced new weapons for Ukraine and threatened to slap new sanctions on buyers of Russian exports unless it agrees to a peace deal in 50 days.
The American President has pledged to send additional Patriot air-defense systems to Ukraine, a policy shift coinciding with what he promised would be a major statement regarding the US’ approach to Russia.
He also criticized Mr Vladimir Putin, the latest in a series of negative remarks toward the Russian president.
Russia’s seaborne oil product exports in June were down 3.4 per cent from May at 8.98 million metric tons, data showed.
Meanwhile, traders weighed whether the US would actually impose steep tariffs on countries that continue to trade with Russia. China and India are among the top destinations for Russian crude oil exports.
However, market analysts say the chances of doing imposing 100 per cent tariffs on China are slim to none as it would lead to inflation.
Meanwhile, the European Union is on the verge of agreeing an 18th package of sanctions against Russia that would include a lower oil price cap.
Also, investors were also eyeing the outcome of US tariff talks with key trading partners with the European Union and South Korea on Monday, saying that they were working on trade deals with the US. that would soften the blow from looming tariffs ahead of the August 1 deadline.
Providing some support, China’s June oil imports increased 7.4 per cent on the year to 12.14 million barrels per day, the highest since August 2023, according to customs data released on Monday.
The International Energy Agency (IEA) said last week the global oil market may be tighter than it appears in the short term. However, the agency boosted its forecast for supply growth this year, while trimming its outlook for growth in demand, implying a market in surplus.