Oil prices climbed on Friday but pulled back from session highs after U.S. President Donald Trump warned of potential sanctions on Russia if it fails to reach a cease-fire with Ukraine.
Market Reaction to Trump’s Sanction Threat
Trump stated on Truth Social that he was “strongly considering” sanctions on Russian banks and tariffs on Russian products due to ongoing military actions in Ukraine.
Brent crude futures rose $1.04, or 1.5%, to settle at $70.50 per barrel, while U.S. West Texas Intermediate (WTI) futures increased 68 cents, or 1.02%, closing at $67.04.
Earlier in the session, Brent surged to $71.40 and WTI touched $68.22 after Russian Deputy Prime Minister Alexander Novak indicated that OPEC+ would proceed with its planned April output increase but might later consider production cuts.
OPEC+ and Supply Concerns
Oil market analysts noted that volatility surrounding OPEC+ production plans and potential Russian sanctions had a greater impact on prices than other geopolitical factors.
“If you don’t like the price of oil, wait a minute,” said Phil Flynn, senior analyst at Price Futures Group.
Flynn added that the market’s focus on Russia overshadowed developments related to cease-fire talks between Israel and Hamas.
Onyx Capital Group’s Harry Tchilinguirian emphasized that OPEC+ remains conditional on “market conditions,” suggesting production adjustments could be made depending on future demand trends.
Additional Market Influences
Brent crude prices had earlier fallen to their lowest level since December 2021 following a rise in U.S. crude inventories and OPEC+ confirming its decision to increase April output by 138,000 barrels per day.
Meanwhile, U.S. Treasury Secretary Scott Bessent indicated that the U.S. aims to significantly curb Iranian crude exports, with reports that the administration is considering inspecting Iranian oil tankers at sea as part of its effort to push Iran’s oil exports to near zero.
Trade Policy Uncertainty and Economic Impact
Global markets remain highly sensitive to fluctuating U.S. trade policies. On Thursday, Trump suspended a 25% tariff on most goods from Canada and Mexico until April 2, though steel and aluminum tariffs will take effect on March 12.
Rystad Energy’s Mukesh Sahdev noted that while the tariff delay offers temporary relief, the market remains in a delicate balance between policy uncertainty and concerns over oil oversupply.
Economic Outlook Amid Policy Shifts
The latest U.S. jobs report showed that job growth picked up in February, with the unemployment rate increasing to 4.1%. However, analysts warn that uncertainty over trade policies and deep federal spending cuts could weaken labor market resilience in the coming months.
