Oil edges down as market contemplates potential sanctions, tariffs
Brent crude futures fell 5 sen to US$69.16 a barrel by 0000 GMT, while US West Texas Intermediate crude futures fell to US$66.89, down 9 sen.
Both contracts settled more than US$1 lower in the previous session.
Trump announced new weapons for Ukraine on Monday, and threatened sanctions on buyers of Russian exports unless Moscow agrees to a peace deal in 50 days.
Oil prices had climbed at the news of potential sanctions, but later gave up these gains as the 50-day deadline raised hopes that sanctions could be avoided, and traders dwelled on whether the US would actually impose steep tariffs on countries continuing to trade with Russia.
"The pause eased concerns that direct sanctions on Russia could disrupt crude oil flows. Sentiment was also weighed down by rising trade tensions," ANZ senior commodity strategist Daniel Hynes wrote in a note to clients.
Trump said on Saturday he would impose a 30 per cent tariff on most imports from the European Union and Mexico from August 1, adding to similar warnings for other countries and leaving them less than three weeks to hammer out framework deals that could lower the threatened tariff rates.
Tariffs risk slowing down economic growth, which could sap global fuel demand and drag oil prices lower.
Elsewhere, oil demand is set to stay "very strong" through the third quarter, keeping the market snugly balanced in the near term, the Organisation of Petroleum Exporting Countries' secretary general said, according to a Russian media report.
Goldman Sachs on Monday raised its oil price outlook for the second half of 2025, pointing to potential supply disruptions, shrinking oil inventories in Organisation for Economic Co-operation and Development countries, and production constraints in Russia.
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