Oil retreated, pausing last month's rally as traders position themselves for impending US tariff announcements.

Brent slid close to $74 a barrel after slipping slightly on Tuesday. US President Donald Trump is set to announce his tariff measures later on Wednesday, and the sweeping duties will take immediate effect, according to his top spokeswoman.

Several proposals are said to be under consideration, including a tiered tariff system with a set of flat rates for different countries, as well as a more customized "reciprocal" plan. Wide-ranging measures remained on the table even as the announcement approached.

"We expect a wait-and-see stance in the oil market today until more clarity emerges on Trump's tariff plans," said Arne Lohmann Rasmussen, chief analyst at A/S Global Risk Management. "That said, there is a risk that the oil price may decline today, driven by concerns that tariffs will significantly hinder growth."

The tariffs add to a deluge of conflicting drivers since Trump came into office. Sanctions threaten to curb supply from Russia and Iran, even as a production boost by OPEC and its allies starting this month exacerbates concerns a glut is looming later this year. 

The US might further tighten the screws on Russia.

A group of 50 Republican and Democratic senators introduced a sanctions package on the third-largest oil producer and countries that buy its fuel if President Vladimir Putin refuses to engage in good-faith ceasefire negotiations with Ukraine, or breaches an eventual agreement.

Elsewhere, the industry-funded American Petroleum Institute reported US crude inventories rose by a hefty 6 million barrels last week, according to a document seen by Bloomberg. Levels at Cushing, Oklahoma — the delivery point for West Texas Intermediate — rose by 2.2 million barrels, according to the report, which would be the largest build since January 2023 if confirmed by official data later on Wednesday.

Source: Bloomberg