Oil fell as broader markets weakened on worse-than-expected US inflation data and crude traders cashed out after prices reached a six-week high.

While West Texas Intermediate slipped 1.1% on Thursday to settle below $70 a barrel, snapping a three day rally, prices are largely still range-bound as traders await clearer signals on balances for supply and demand.

“Investors are just being cautious not to overextend the rally until we have more clarity on: one OPEC, two Russia — through the weekend,” as well as the looming Aug. 1 US tariff deadline, said Frank Monkam, head of macro trading at Buffalo Bayou Commodities.

US President Donald Trump said he would impose a tariff on India’s exports and a penalty for its energy purchases from Russia from Aug. 1, the latest in a series of comments in which he expressed his anger at the lack of ceasefire in Ukraine.

While the market impact of disrupting Indian purchases could be significant, as Moscow would have to find new buyers if it loses one of its largest customers, the relatively muted price movements offer a sign that there’s little expectation Trump will follow through for now.

It’s the latest sign of an oil market that increasingly only reacts when there is a meaningful disruption to supply. While Trump has repeatedly threatened steps that might hurt output in producer nations from Venezuela to Iran and Russia since taking office, there’s so far not been a substantial hit to global supply, even when the US bombed Iran’s nuclear facilities.

India’s refiners are seeking clarity from the government in New Delhi. A senior executive at a major processor said his company would try and source more crude from the Middle East and Africa, while also looking to the government for guidance on how it should proceed.

“Finding a replacement of Russian crude on the global market would be difficult,” Goldman Sachs analysts including Yulia Zhestkova Grigsby wrote in a report. “Although the exact details of potential economic penalties remain unclear, investors focus on the risks from a potential 100% tariff on countries that import Russian oil.”

Trump’s threat came hours before the US issued its most sweeping Iran-related sanctions in seven years, targeting an international shipping network controlled by prominent oil trader Hossein Shamkhani, whose father is a senior adviser to Supreme Leader Ayatollah Ali Khamenei.

While those designations marked the biggest escalation in measures since Trump returned to office, US officials said they don’t expect the restrictions to lead to any sustained disruption to global oil markets, noting that much of the oil sold by the network goes to China.

Collectively, the measures are a reminder of the type of headline-driven volatility oil traders are currently having to grapple with.

Trump has also imposed an Aug. 1 deadline for nations to settle on trade deals with the US — with South Korea and the European Union recently reaching agreements.

Those risks have made it harder for some of the world’s top physical traders to make money. Shell Plc’s Chief Executive Officer Wael Sawan said on Thursday that his company had adopted a risk-off approach in crude in the previous quarter as a result of the larger swings, echoing comments from the bosses of other oil majors in recent weeks.

Oil Prices

• WTI for September delivery fell 1.1% to settle at $69.26 a barrel.

• Brent for October dipped 1.1% to settle at $71.70 a barrel.

Source : Bloomberg