Oil prices settled lower on Friday after the US delayed plans for reciprocal tariffs and as prospects grew of a peace deal between Russia and Ukraine, which could ease global crude supply concerns.
Brent, the benchmark for two thirds of the world’s oil, closed 0.37 per cent lower at $74.74 a barrel on Friday. West Texas Intermediate (WTI), the gauge that tracks US crude, was down 0.77 per cent at $70.74 a barrel.
For the week, Brent gained 0.11 per cent while WTI lost about 0.37 per cent, Reuters reported.
There was concern that the US would introduce President Donald Trump's promised reciprocal tariffs on trading partners this week.
But on Thursday, Mr Trump directed commerce and economic officials to study reciprocal tariffs on nations that impose duties on American goods, with their recommendations due by April 1, raising hopes that any new duties would not take effect until then.
“Studying tariffs case by case requires time and the tariffs won’t be effective until April. I don’t know if you could call it good news, but the markets’ reaction suggests that the latter has been perceived as good news,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
On February 4, the US announced a 30-day delay on planned tariffs on goods from Mexico and Canada, following discussions with the leaders of both countries, who agreed to take steps to boost border security and address the flow of drugs and migrants into the US.
However, a 10 per cent duty on all goods imported from China into the US took effect as scheduled.
Earlier this week, Mr Trump ordered a 25 per cent import tax on all steel and aluminium entering the US, set to take effect on March 12.
Oil prices fell more than 2 per cent in the past two sessions on growing hopes of a peace deal between Ukraine and Russia after three years of conflict.
Russia, one of the world's largest crude producers, has been subject to energy-related sanctions since its invasion of Ukraine in February 2022.
To bypass western restrictions and a price cap on its oil, a large share of Russia's crude exports is being transported through a global “dark fleet” of ships, which has faced stricter US sanctions in recent weeks.
This week, Mr Trump and Russian President Vladimir Putin spoke on phone and agreed to begin discussions on ending the war.
“An end to the war could support an increase in Russian exports, although our analysts do not expect US-Russia talks will lead to any near-term end to the fighting,” BMI, a Fitch Solutions company, said in a research note on Thursday.
Possible peace talks will follow rounds of sanctions that Washington has issued since October on vessels and entities involved in the oil trade with Iran and Russia, disrupting crude flows to major importers such as China and India.
However, the impact of the sanctions on global oil supply has been limited so far, the International Energy Agency said in a report on Thursday.
“Fresh US sanctions on Russia and Iran roiled markets at the start of the year but they have yet to materially impact global oil supply. Iranian crude oil exports are only marginally lower while Russian flows, so far, continue largely unaffected,” the Paris-based agency said.
The IEA’s data showed that Russia's oil production rose slightly to 9.22 million barrels per day in January this year from 9.12 million bpd in December.
Meanwhile, Moscow’s oil and fuel export revenue rose to $15.8 billion last month, a $900 million increase from December.
The IEA also said that improved Opec+ compliance with agreed targets is slowly “chipping away” at this year’s projected supply surplus.
The producer alliance reaffirmed on February 3 that it plans to start unwinding voluntary cuts of 2.2 million bpd from April, noting that the “additional voluntary production adjustments have ensured the stability of the oil market.”
