Oil prices fell on Wednesday (July 30th) as investors awaited developments on US President Donald Trump's tighter deadline for Russia to end the war in Ukraine and his threat of tariffs on countries that trade its oil.

The most active Brent crude futures fell 58 cents, or 0.81%, to $71.10 a barrel at 10:14 a.m. GMT, while US West Texas Intermediate crude fell 58 cents, or 0.84%, to $68.63. The September Brent crude contract, which expires on Wednesday, fell 59 cents, or 0.81%, to $71.92.

Both contracts had hit their highest prices since June 20th on Tuesday.

Trump said on Tuesday that he would begin imposing measures against Russia, such as 100% secondary tariffs on trading partners, if Russia did not make progress in ending the war within 10 to 12 days, ahead of the previous 50-day deadline.

China and India are the main beneficiaries of Russian crude oil, with India being more vulnerable, PVM Associates analyst John Evans said in a note. "Alternative crude oil must be supplied, and although Saudi Arabia and its OPEC members are willing and able to fill the gap, the time required to address this delay will add further support to near-term price strength," Evans added.

JP Morgan analysts wrote that while China is unlikely to comply with US sanctions, India has signaled it will, which could impact Russia's 2.3 million barrels per day (bpd) of oil exports. "The supply risk premium of $4 to $5 per barrel injected in recent days is expected to persist unless Putin takes conciliatory measures," said Vandana Hari, founder of oil market analysis provider Vanda Insights.

The United States has also warned China, Russia's largest oil buyer, that it could face significant tariffs if it continues buying, Treasury Secretary Scott Bessent said at a press conference in Stockholm. However, Barclays analyst Amarpreet Singh does not expect Russian barrels to leave the market anytime soon.

Low energy prices have been a priority for the Trump administration, and Russia's efforts to evade Western sanctions since its invasion of Ukraine have made its exports resilient to price cap mechanisms, Singh said. (alg)

Source: Reuters