WTI price jumps to around $71.35 in Tuesday’s Asian session.
Trump warned of possible secondary tariffs on Russian oil buyers.
A weakening economic outlook could dampen oil demand and cap the upside for the WTI price.
West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $71.35 during the early Asian session on Tuesday. The WTI price rises on supply worries after US President Donald Trump threatens Russia with oil tariffs.
Trump said on Sunday that he was "pissed off" at Russian President Vladimir Putin and would impose secondary tariffs of 25% to 50% on buyers of Russian oil if he feels Moscow is blocking his efforts to end the war in Ukraine. Trump also threatened Iran over the weekend with bombing and secondary tariffs if Tehran did not come to an agreement with Washington over its nuclear program.
"(Trump's) threat on secondary tariffs on Russian and Iranian oil is a factor oil market participants are tracking, although he has indicated he is not planning to introduce them for now," said UBS analyst Giovanni Staunovo. "But, there is a rising risk of larger supply risks down the road.”
On the other hand, concerns over a global economic downturn intensified ahead of Trump’s auto and reciprocal tariffs, which are set to take effect on Wednesday. Trump said late Monday that his reciprocal tariffs plan will target all other countries when it is unveiled Wednesday, adding more uncertainty to the much-anticipated trade policy just days before its implementation.
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