Oil prices experienced a slight decline on Monday, signaling a modest quarterly loss. This occurred despite a warning from U.S. President Donald Trump, who stated he might impose secondary tariffs on buyers of Russian oil if he believes that Moscow is obstructing his efforts to resolve the conflict in Ukraine.

By 0710 GMT, Brent crude futures for June fell by 21 cents, or 0.3%, settling at $72.55 per barrel. Meanwhile, U.S. West Texas Intermediate crude decreased by 27 cents, or 0.4%, to $69.09 per barrel. The front-month Brent contract, also down 12 cents or 0.2%, traded at $73.51 and is set to expire later on Monday.

Both oil benchmarks are on track to close the month slightly lower, marking their first quarterly decline in two quarters. "Trump's warning of secondary tariffs on Russian and Iranian oil is something the oil market is closely monitoring, although he has indicated these tariffs won't be implemented immediately," noted UBS analyst Giovanni Staunovo. He added, "However, the risk of larger supply disruptions in the future is rising."

On Sunday, Trump expressed his frustration with Russian President Vladimir Putin, threatening to impose secondary tariffs ranging from 25% to 50% on Russian oil buyers if he perceives that Moscow is hindering his peace efforts in Ukraine.

Additionally, Trump issued a warning to Iran regarding potential bombings and secondary tariffs should Tehran fail to reach an agreement with the U.S. over its nuclear program. IG analyst Tony Sycamore remarked that oil prices fell despite Trump’s comments, as market participants did not believe the threats would be realized. He noted that should tariffs be enacted, it could escalate tensions into a trade war, negatively impacting global growth and crude oil demand.

The OPEC+ group, which includes OPEC and its allies led by Russia, is expected to commence its monthly oil production increases in April, with continued output rises anticipated in May, as reported by Reuters. Economist Yuki Takashima from Nomura Securities predicted that WTI prices would range between $65 and $75 while the market assesses the potential impact of Trump’s proposed tariffs on oil supply and the global economy, along with the supply situation from the U.S. and OPEC+.

In related news, top oil exporter Saudi Arabia may reduce its crude prices for Asian customers in May to a three-month low, following significant declines in benchmark prices throughout the month, according to traders. Additionally, Iran has lowered the price of its light crude for Asian buyers to $3.95 per barrel above the Oman/Dubai average for April.

Discussions to resume Kurdish oil exports through the Iraq-Turkey pipeline have encountered hurdles, with ongoing uncertainties surrounding payments and contracts, according to two sources familiar with the situation.On Monday, oil prices slightly decreased, signaling a potential modest quarterly loss. This trend occurred amidst warnings from U.S. President Donald Trump about possibly imposing secondary tariffs on Russian oil buyers if he believes that Moscow is obstructing his attempts to conclude the war in Ukraine. By 0710 GMT, June Brent crude futures traded down by 21 cents, or 0.3%, at $72.55 per barrel, while U.S. West Texas Intermediate (WTI) crude saw a decline of 27 cents, or 0.4%, down to $69.09 per barrel. Front-month Brent also slipped, down by 12 cents, or 0.2%, standing at $73.51, just before it expires later in the day. Both crude benchmarks were poised to close the month in the red, marking their first quarterly dip in two quarters.

UBS analyst Giovanni Staunovo pointed out that Trump's tariff threats on Russian and Iranian oil are being closely monitored by oil market participants, though he noted that the President has stated he does not plan to implement them at this time. Even so, there's an increasing risk of larger supply worries moving forward. Trump expressed his frustration regarding Russian President Vladimir Putin during a Sunday address, where he declared his intention to impose secondary tariffs ranging from 25% to 50% on purchasers of Russian oil if Russia does not facilitate the resolution of the Ukraine conflict.

Additionally, Trump threatened Iran with severe measures, including potential bombing and secondary tariffs if Tehran fails to reach an agreement with the United States concerning its nuclear program. However, IG analyst Tony Sycamore mentioned that the oil market's response was relatively muted despite Trump's threats. This suggests a prevalent skepticism among traders regarding the likelihood of Trump's following through with his proposed actions. Sycamore added that if such measures were implemented, they could instigate a trade war, adversely affecting global growth and crude oil demand.

Meanwhile, the OPEC+ coalition, including OPEC and its allies led by Russia, is slated to resume its monthly oil production increases in April, with expectations that they will continue this trend into May. Yuki Takashima, an economist at Nomura Securities, indicated that WTI is likely to oscillate between the $65 to $75 range as the market evaluates the impact of potential Trump tariffs on oil supply and the broader global economy, alongside monitoring the supply dynamics from both the U.S. and OPEC+.

Additionally, top oil exporter Saudi Arabia is anticipated to reduce its crude prices for Asian customers in May, potentially marking a three-month low—this decision aligns with the significant drop in benchmark prices seen throughout the month. Similarly, Iran has adjusted the price of its light crude for Asian buyers to $3.95 a barrel above the Oman/Dubai average for April.

On a separate note, discussions regarding the resumption of Kurdish oil exports via the Iraq-Turkey pipeline are facing obstacles. Two sources familiar with the situation reported ongoing uncertainty regarding payments and contracts, which has complicated negotiations.

In summary, the current state of the oil market is characterized by cautious observation of geopolitical tensions involving major crude producers, fluctuating prices, and impending production adjustments by OPEC+. The market appears to be bracing for a nuanced landscape influenced by both supply chain considerations and economic forecasts, compounded by the potential imposition of tariffs that could further complicate global oil dynamics.