(Bloomberg) — Oil gave up earlier gains to trade little changed as Russia tested the effectiveness of US sanctions on its crude, countering the risks to supplies from President Donald Trump’s threat of universal tariffs.
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West Texas Intermediate was little changed near $73 a barrel, following a 2% decline on Monday.
Russia is sending cargoes of sanctioned oil to India on tankers that have been blacklisted by the US Treasury, setting up a test of Moscow’s ability to circumvent the restrictions. The nation’s exports of oil products are set to hit an 11-month high of about 2.3 million barrels a day, according to data compiled by Bloomberg.
Elsewhere, oil loadings from two key ports in eastern Libya have resumed, the chairman of the nation’s state oil company said. The protest group had previously demanded two major ports to halt crude loadings, which could affect hundreds of thousands of barrels of exports.
Crude had gained as much as 1.6% earlier in the session after Trump said Monday night that he favored across-the-board tariffs “much bigger” than 2.5% and charges on some foreign-made goods in the “near future,” listing products including steel, aluminum and copper.
“Today’s price action reflects a risk-asset bounce, offset by easing Libya supply concerns and reports that sanctioned Russian vessels are heading to India,” said Rebecca Babin, senior energy trader at CIBC Private Wealth Group. The questions “surrounding Trump make it tough to accurately price the fundamentals.”
Crude markets have had a bumpy start to the year as US sanctions on Russian oil and cold weather ratcheted prices higher and sent barrels in the Middle East soaring. Analysts have grown more optimistic on the outlook, with Bank of America Corp. saying it no longer sees a large surplus this year.
Looking ahead, oil traders expect OPEC and allies to stick with their current supply policy at a review meeting next week, resisting pressure from Trump to boost production and bring down crude prices. At present, the group intends to bring back output in monthly tranches starting from April.
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