A view shows oil pump jacks outside Almetyevsk in the Republic of Tatarstan, Russia June 4, 2023.
Oil prices rose nearly 2% on Monday after posting their third straight week of losses, even though investors remained worried that U.S. President Donald Trump might start a trade war.
Brent crude futures settled at $1.21, or 1.6%, at $75.87 a barrel, while U.S. West Texas Intermediate crude rose $1.32, or 1.9%, to $72.32.
The gains come after futures fell 2.8% last week, pressured by global trade worries.
"It's tariff uncertainty which is the name of the game. This affects risk appetite in general and has spillover effects into oil," said Harry Tchilinguiran at Onyx Capital. "After last week's declines, some people may be buying into the dip."
Trump is expected to sign an executive order on tariffs later on Monday or Tuesday, according to a source familiar with the situation, in a move that could increase the risk of a multi-front trade war. Wall Street's main indexes closed higher on Monday.
A week ago he announced tariffs on Canada, Mexico and China, but suspended those for the neighbouring countries the next day.
Tariffs could dampen global economic growth and energy demand.
"The market has realized tariff headlines are likely to continue in the weeks and months ahead," said IG analyst Tony Sycamore, adding that there was an equal chance they could be walked back or even increased at some point in the near future.
"So perhaps investors are coming to the conclusion it's not the best course of action to react negatively to every headline."
China's retaliatory tariffs on some U.S. exports are due to take effect on Monday, with no sign yet of progress in talks between Beijing and Washington.
Oil and gas traders are seeking waivers from Beijing for U.S. crude and liquefied natural gas (LNG) imports.
Also buoying prices, Russia's Federal Antimonopoly Service may initiate a one-month ban on gasoline exports by large producers in order to stabilize wholesale prices ahead of the crop-sowing season, state news agency TASS reported on Friday.
"Tighter supplies of exported Russian crude and gasoline have Middle East cash crude prices moving higher in the early trade today," said Dennis Kissler, senior vice president of trading at BOK Financial.
Trump said on Sunday that the U.S. is making progress with Russia to end the Ukraine war. Russia's point man for relations with the U.S. said on Monday that all of President Vladimir Putin's conditions must be met in full before the war can end.
Sanctions imposed on Russian oil trade on January 10 disrupted Moscow's supplies to its top clients, China and India.
Washington also stepped up pressure on Iran last week, with the U.S. Treasury imposing new sanctions on a few individuals and tankers that help to ship Iranian crude oil to China.
"These sanctions on Iran and Russia, they are biting. This is tightening the market," said SEB analyst Bjarne Schieldrop. Rising natural gas prices are also contributing to oil price gains by boosting demand for cheaper fuels, he added.
Meanwhile, U.S. crude oil and gasoline stockpiles were expected to have risen last week, while distillate inventories likely fell.
