Oil pauses rally as markets weigh Trump's ultimatum to Russia
Oil prices took a breather in Asian trade on Wednesday after the previous session's spike of more than 3%, as investors awaited developments from U.S. President Donald Trump's tighter deadline for Russia to end the war in Ukraine.
Most active Brent crude futures rose 8 cents, or 0.12%, to $71.81 a barrel by 0419 GMT, while U.S. West Texas Intermediate crude gained 8 cents, or 0.12%, to $69.29 a barrel.
The Brent crude September contract expiring on Wednesday was up 18 cents at $72.69 per barrel.
Both contracts had settled on Tuesday at their highest since June 20.
On Tuesday, Trump said 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.
"The $4 to $5 per 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 had warned China, the largest buyer of Russian oil, it could face huge tariffs if it kept buying, Treasury Secretary Scott Bessent told a news conference in Stockholm, where the U.S. was holding trade talks with the EU.
JP Morgan analysts said in a note that while China was not likely to comply with U.S. sanctions, India has signalled it would do so, putting at risk 2.3 million barrels per day of Russian oil exports.
The United States and the European Union averted a trade war with a deal for 15% U.S. tariffs on European imports, easing concerns about the impact of trade tension on economic growth and offering support to oil prices.
Source: Reuters
