Oil pauses rally as markets weigh Trump's ultimatum to Russia
Most active Brent crude futures rose 8 cents, or 0.12%, to $71.81 a barrel by 0419 GMT, while U.S. West Texas Intermediate crude gained 8 cents, or 0.12%, to $69.29 a barrel.
The Brent crude September contract expiring on Wednesday was up 18 cents at $72.69 per barrel.
Both contracts had settled on Tuesday at their highest since June 20.
On Tuesday, Trump said he would start imposing measures on Russia, such as secondary tariffs of 100% on trading partners, if it did not make progress on ending the war within 10 to 12 days, moving up from an earlier 50-day deadline.
"The $4 to $5 per barrel of supply risk premium injected in recent days can be expected to be sustained, unless Putin makes a conciliatory move," said Vandana Hari, founder of oil market analysis provider Vanda Insights.
The United States had warned China, the largest buyer of Russian oil, it could face huge tariffs if it kept buying, Treasury Secretary Scott Bessent told a news conference in Stockholm, where the U.S. was holding trade talks with the EU.
JP Morgan analysts said in a note that while China was not likely to comply with U.S. sanctions, India has signalled it would do so, putting at risk 2.3 million barrels per day of Russian oil exports.
The United States and the European Union averted a trade war with a deal for 15% U.S. tariffs on European imports, easing concerns about the impact of trade tension on economic growth and offering support to oil prices.
In Venezuela, foreign partners of state oil company PDVSA are still waiting for U.S. authorisation to operate in the sanctioned country after talks last week, which could return some supply to the market, so easing pressure for prices to rise.
"The oil market is keeping an eye on the U.S. trade deals and talks and on the Fed, but those are marginal influences on sentiment," Hari added.
Despite President Donald Trump's objections, the U.S. Federal Reserve is expected to hold interest rates steady at its policy meeting later on Wednesday.
On Tuesday, the International Monetary Fund raised global growth forecasts slightly for 2025 and 2026, but warned the world economy faced major risks, such as a rebound in tariff rates, geopolitical tension and larger fiscal deficits.
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