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Oil prices drop despite Trump's warnings about possible tariffs against Russian buyers

Oil prices fell on Monday and are heading towards a small quarterly loss, despite warnings from U.S. president Donald Trump about secondary tariffs if he believes that Moscow is preventing him from ending the war in Ukraine.

Brent crude futures for June, the more active contract, fell 17 cents or 0.2% to $72.59 a barge by 0028 GMT. Meanwhile, U.S. West Texas Intermediate oil declined 18 cents or 0.3% to $69.18 a barge. Brent front-month, up 8 cents or 0.1% at $73.71, expires on Monday.

Both benchmarks recorded a weekly gain for the third time in a row on Friday. Both benchmarks were on course to finish the month almost flat and report their first quarterly decline in two quarters.

Donald Trump, the U.S. president, said on Sunday that he is "pissed" with Russian President Vladimir Putin. He will impose secondary duties of 25 to 50 percent on Russian oil buyers if he believes Moscow is preventing him from ending the war in Ukraine.

His harsh comments about Putin show his frustration over the lack of progress on a ceasefire. Trump claimed he would be able to impose new trade measures in a month.

Investors are cautious about Trump's comments, which were meant to increase oil prices. However, doubts over their feasibility, and the upcoming OPEC+ output increase beginning in April, keep them on edge.

He said: "We expect WTI will stay between $65 and $75 as the market evaluates the impact of Trump's tariffs on the oil supply, global economy and the U.S. supply.

The OPEC+ group, made up of OPEC, Russia and its allies, will begin its monthly increase in oil production program in April. Last week, it was reported that the group would likely continue to increase oil production in May.

Saudi Arabia, the world's largest oil exporter, may reduce its crude prices to Asian buyers by a third-month low in May, following the sharp declines in benchmark price this month, traders have said.

Two sources who have direct knowledge of this matter, but spoke on the condition of anonymity, said that the talks to restart Kurdish crude oil exports via the Iraq-Turkey pipe are stalled due to a lack clarity regarding payments and contracts.

Negotiations, which began in late February, failed to resolve a standoff of nearly two years that had halted the flow of goods from Iraqi Kurdistan, in the northern part of the country, to Turkey's Mediterranean Port of Ceyhan.

Trump threatened Iran with secondary tariffs and bombings on Sunday if Tehran failed to reach an agreement with Washington regarding its nuclear program. Reporting by Yuka Obaashi

(source: Reuters)