Oil slips as Trump repeats call for OPEC to reduce | Commodities

By Florence Tan

SINGAPORE (Reuters) – Oil costs fell more than 1% on Monday after U.S. President Trump known as on OPEC to scale back costs following the announcement of wide-ranging measures to spice up U.S. oil and fuel output in his first week in workplace.

futures dropped 87 cents, or 1.11%, to $77.63 a barrel by 0043 GMT after settling up 21 cents on Friday.

U.S. West Texas Intermediate crude was at $73.77 a barrel, down 89 cents, or 1.19%.

Trump on Friday reiterated his call for the Group of the Petroleum Exporting International locations to cut oil costs to harm oil-rich Russia’s funds and help carry an finish to the warfare in Ukraine.

“One way to stop it quickly is for OPEC to stop making so much money and drop the price of oil … That war will stop right away,” Trump mentioned.

Trump has additionally threatened to hit Russia “and other participating countries” with taxes, tariffs and sanctions if a deal to finish the warfare in Ukraine isn’t struck quickly.

Russian President Vladimir Putin mentioned on Friday that he and Trump ought to meet to speak in regards to the Ukraine warfare and power costs.

Nevertheless, OPEC and its allies together with Russia has but to react to Trump’s call, with OPEC+ delegates pointing to a plan already in place to begin raising oil output from April.

Each benchmarks posted their first decline in 5 weeks final week as issues eased about sanctions on Russia disrupting provides.

Goldman Sachs analysts mentioned they don’t anticipate a huge hit to Russian manufacturing as increased freight charges have incentivized increased provide of non-sanctioned ships to maneuver Russian oil whereas the deepening within the low cost on the affected Russian ESPO grade attracts price-sensitive consumers to keep buying the oil.

“As the ultimate goal of sanctions is to reduce Russian oil revenues, we assume that Western policymakers will prioritize maximizing discounts on Russian barrels over reducing Russian volumes,” the analysts mentioned in a observe.

Nonetheless, JP Morgan analysts mentioned some risk premium is justified given that just about 20% of the worldwide Aframax fleet at the moment faces sanctions.

“The application of sanctions on the Russian energy sector as leverage in future negotiations could go either way, indicating that a zero risk premium is not appropriate,” they added in a observe.

Extra trade disruption is anticipated after Trump introduced on Sunday he’ll impose sweeping retaliatory measures on Colombia, together with tariffs and sanctions, after the nation turned away two U.S. army plane with migrants being deported.

The U.S. is the biggest purchaser of Colombia’s seaborne crude exports at 183,000 barrels per day (bpd) in 2024, or 41% of Colombia’s complete, knowledge from analytics firm Kpler confirmed.

Knowledge from Power Info Administration confirmed the U.S. imported 228,000 barrels per day of crude and merchandise from Colombia in 2023.