On April 1st, the international oil market showed weakness, despite U.S. President Trump's recent threat to impose high "secondary tariffs" on Russian oil buyers. The market reacted coolly to this. As of 10:27 am Beijing time, Brent crude futures for June delivery fell 0.45% to $72.44 per barrel; U.S. WTI crude fell 0.43% to $69.05 per barrel. The soon-to-expire nearest-month Brent contract dropped 0.48% to $73.28.
Although both major benchmark oil prices fell last Friday, they have risen on a weekly basis for the past three weeks, reflecting a short-term mixed market sentiment. However, the quarterly performance may record its first decline since 2022, highlighting concerns about global economic recovery and energy demand.
On March 31st, Trump stated that if Russia is deemed to be obstructing efforts to end the Ukraine conflict, he will impose secondary tariffs of 25% to 50% on its oil buyers. He expressed being "frustrated" with Putin and hinted that these measures could take effect within a month.
However, the market reacted indifferently. Nomura Securities economist Yuki Takashima noted, "Theoretically, Trump's remarks should drive up oil prices, but there are doubts about its enforceability. In addition, the upcoming OPEC+ production increases also weaken the impact of geopolitical risks on supporting oil prices."
OPEC+ plans to gradually ease previous production cuts from April, restoring some output. According to Reuters, the alliance may continue to expand supply in May, becoming an important factor affecting oil price trends.
Analysts believe that in the context of Trump's policies not yet implemented and OPEC+ preparing for a production increase, oil prices may continue to fluctuate in the short term. Takashima expects WTI crude to fluctuate between $65 and $75, as the market assesses the potential impact of U.S. tariff policy on the supply chain.
Despite ongoing geopolitical risks, factors such as global demand weakness and slowing economic growth limit the upward space for oil prices. Investors are currently closely watching whether OPEC+ will further expand capacity and if Trump will officially implement high tariff policies on Russian oil buyers, developments which may dominate short-term market sentiment.
