Oil falls as Trump gives Russia 50 days to avoid new sanctions

NEW YORK: Oil prices edged lower 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 Trump’s tariffs.

Brent crude futures fell 79 cents, or 1.12%, to $69.57 a barrel by 1:04 pm EDT (1704 GMT). US West Texas Intermediate crude futures were down $1.07, also 1.56%, to $67.38.

Trump announced new weapons for Ukraine and threatened to hit buyers of Russian exports with sanctions unless Russia agrees to a peace deal in 50 days. Oil prices rallied early, on expectations that Washington would impose steeper sanctions. But prices retreated as traders weighed the 50-day deadline.

“The market took it as a negative because there seemed to be a lot of time to negotiate,” said Phil Flynn, senior analyst with Price Futures Group. “The fear of immediate sanctions on Russian oil is further off in the future than the market thought this morning.” Last week, Trump said he was due to make a “major statement” on Russia on Monday, having expressed his frustration with Russian President Vladimir Putin due to the lack of progress in ending the war in Ukraine.

Russia’s seaborne oil product exports in June were down 3.4% from May at 8.98 million metric tons, data from industry sources and Reuters calculations showed. A bipartisan US bill that would hit Russia with sanctions gained momentum last week in Congress. European Union envoys, meanwhile, are on the verge of agreeing an 18th package of sanctions against Russia that would include a lower oil price cap. Investors were also eyeing the outcome of US tariff talks with key trading partners.

The European Union and South Korea said on Monday they were working on trade deals with the US that would soften the blow from looming tariffs as Washington threatens to impose hefty duties from August 1. EU member states find Trump’s tariff threat “absolutely unacceptable”, Danish Foreign Minister Lars Lokke Rasmussen said on Monday during a joint press conference with EU’s Trade Chief Maros Sefcovic in Brussels. Providing some support, China’s June oil imports increased 7.4% on the year to 12.14 million barrels per day, the highest since August 2023, according to customs data released on Monday.