Oil was up by about 1 per cent on Wednesday as investors focused on developments on US President Donald Trump’s tighter deadline for Russia to end the war in Ukraine and his tariff threats to countries that trade its oil.
The price of Brent crude appreciated by 73 cents or 1.01 per cent to $73.24 a barrel and the US West Texas Intermediate (WTI) crude moved up by 79 cents or 1.14 per cent to $70.06 a barrel.
President Trump said he would start imposing measures on Russia, such as secondary tariffs of 100 per cent on trading partners if it did not make progress in ending the war in Ukraine within 10 to 12 days, moving up from an earlier 50-day deadline.
He imposed a 25 per cent tariff on goods imported from India starting from August 1, along with an unspecified penalty for buying Russian weapons and oil.
The US also warned China, the largest buyer of Russian oil, that it could face huge tariffs if it kept buying.
Market analysts noted that while China was unlikely to comply with US sanctions, India has signaled it would do so, which could affect 2.3 million barrels per day of Russian oil exports.
Traders are also watching how the evolving US position could affect broader coordination between the US and the European Union (EU). While the US and EU recently announced a $750 billion energy cooperation deal, the framework has faced logistical constraints and credibility questions as Russian crude continues flowing to Asia through layered intermediaries.
Meanwhile, US crude inventories rose by 7.7 million barrels, the Energy Information Administration said, while US gasoline stocks fell by 2.7 million barrels. Distillate stockpiles, which include diesel and heating oil, rose by 3.6 million barrels.
The EIA’s data release follows figures from the American Petroleum Institute (API) that were released a day earlier, which suggested that crude oil inventories grew by 1.539 million barrels.
The US Federal Reserve held interest rates steady in a split decision that gave little indication of when borrowing costs might be lowered, a decision that doesn’t favour the US President.
The Federal Reserve’s Chairman, Mr Jerome Powell also added it was too soon to say whether the central bank will cut its interest rate target in September.