Oil slips as Trump repeats name for OPEC to scale back costs

By Florence Tan

SINGAPORE (Reuters) – Oil costs fell greater 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.

Brent crude 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 name for the Group of the Petroleum Exporting Nations to chop oil costs to harm oil-rich Russia’s funds and assist convey an finish to the warfare in Ukraine.

“One strategy to cease it shortly is for OPEC to cease making a lot cash and drop the value of oil … That warfare will cease straight away,” Trump mentioned.

Trump has additionally threatened to hit Russia “and different taking part international locations” 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 vitality costs.

Nevertheless, OPEC and its allies together with Russia has but to react to Trump’s name, with OPEC+ delegates pointing to a plan already in place to start out elevating 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 count on a giant hit to Russian manufacturing as greater freight charges have incentivized greater 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 maintain buying the oil.

“As the final word objective of sanctions is to scale back Russian oil revenues, we assume that Western policymakers will prioritize maximizing reductions on Russian barrels over decreasing Russian volumes,” the analysts mentioned in a be aware.

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

“The applying of sanctions on the Russian vitality sector as leverage in future negotiations might go both approach, indicating {that a} zero danger premium isn’t acceptable,” they added in a be aware.

Extra commerce disruption is predicted 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. navy 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 agency Kpler confirmed.

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