Oil prices were little changed on Friday (August 1st) and headed for weekly gains as investors weighed the impact of further import tariffs imposed by US President Donald Trump and the threat of sanctions.

Brent crude futures fell 26 cents, or 0.36%, to $71.44 a barrel at 12:12 GMT. US West Texas Intermediate crude fell 18 cents, or 0.26%, to $69.08.

Crude oil prices stabilized on Friday after falling more than 1% in the previous session, although Brent and WTI remained on track for weekly gains of 4.4% and 6%, respectively.

Investors have been focused on the potential impact of US tariffs on oil prices this week, with tariffs on most US trading partners set to take effect next Friday. Trump signed an executive order on Thursday imposing tariffs ranging from 10% to 41% on US imports from dozens of foreign countries and territories that failed to reach a trade deal before the August 1 deadline, including Canada, India, and Taiwan.

Partners that successfully secured trade deals include the European Union, South Korea, Japan, and the United Kingdom. "We think the conclusion of a trade deal that more or less satisfies the market, with a few exceptions, has been the main driver of the oil price rally in recent days, and further progress in future trade negotiations with China could provide a further boost to oil market confidence," said Suvro Sarkar of DBS Bank.

Prices were also supported this week by Trump's threat to impose 100% secondary tariffs on buyers of Russian crude as he seeks to pressure Russia to halt its war in Ukraine. This has fueled concerns about potential disruptions to oil trade flows and the withdrawal of some oil from the market.

"Completely replacing Russian oil supplies is impossible, therefore effective sanctions would lead to significantly higher oil prices," said Commerzbank analyst Carsten Fritsch.

J.P. Morgan analysts said on Thursday that Trump's threat of sanctions against China and India over purchases of Russian oil could jeopardize Russia's 2.75 million barrels per day (bpd) of seaborne oil exports. China and India are the world's second- and third-largest consumers of crude oil, respectively. However, some analysts remain concerned that US levies will limit economic growth by raising prices, which could weigh on oil demand. (alg)

Source: Reuters