Oil prices fell on Wednesday as investors awaited developments on U.S. 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 most active Brent crude futures lost 58 cents, or 0.81%, to $71.10 a barrel by 1014 GMT while U.S. West Texas Intermediate crude slipped by 58 cents, or 0.84%, to $68.63.
The Brent crude September contract that expires on Wednesday was down 59 cents, or 0.81%, at $71.92.
Both contracts had settled on Tuesday at their highest since June 20.
Trump had said on Tuesday that he would start imposing measures on Russia, such as secondary tariffs of 100% on trading partners, if it did not make progress on ending the war within 10 to 12 days, moving up from an earlier 50-day deadline.
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China and India are the main beneficiaries of Russian crude, with the latter being more vulnerable, PVM Associates analyst John Evans said in a note.
“Alternative crudes will have to be sourced and while Saudi Arabia and its OPEC cohort would be more than willing and able to fill in, the time it takes to solve the lag will add another prop to near-term price strength,” Evans added.
JP Morgan analysts wrote that while China was unlikely to comply with U.S. sanctions, India has signaled it would do so, which could affect 2.3 million barrels per day (bpd) of Russian oil exports.
“The $4 to $5 a barrel of supply-risk premium injected in recent days can be expected to be sustained unless Putin makes a conciliatory move,” said Vandana Hari, founder of oil market analysis provider Vanda Insights.
The United States also warned China, the largest buyer of Russian oil, that it could face huge tariffs if it kept buying, Treasury Secretary Scott Bessent told a news conference in Stockholm.
Barclays analyst Amarpreet Singh, however, does not expect Russian barrels to leave the market any time soon.
Low energy prices have been a priority for the Trump administration and Russia working around Western sanctions since its invasion of Ukraine has made its exports resilient to the price cap mechanism, Singh said.
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