Oil prices slipped on Monday after U.S. President Trump called on OPEC to reduce prices following the announcement of wide-ranging measures to boost U.S. oil and gas output in his first week in office.
Brent crude futures dropped 53 cents, or 0.68%, to $77.97 a barrel by 0430 GMT after settling up 21 cents on Friday.
U.S. West Texas Intermediate crude was at $74.16 a barrel, down 50 cents, or 0.67%.
Trump on Friday reiterated his call for the Organization of the Petroleum Exporting Countries to cut oil prices to hurt oil-rich Russia's finances and help bring an end to the war in Ukraine.
"One way to stop it quickly is for OPEC to stop making so much money and drop the price of oil ... That war will stop right away," Trump said.
Trump has also threatened to hit Russia "and other participating countries" with taxes, tariffs and sanctions if a deal to end the war in Ukraine is not struck soon.
Russian President Vladimir Putin said on Friday that he and Trump should meet to talk about the Ukraine war and energy prices.
"They are positioning for negotiations," said John Driscoll of Singapore-based consultancy JTD Energy, adding that this creates volatility in oil markets.
He added that oil markets are probably skewed a little bit to the downside with Trump's policies aimed at boosting U.S. output as he seeks to secure overseas markets for U.S. crude.
"He's going to want to muscle into some of the OPEC market share so in that sense he's kind of a competitor," Driscoll said.
However, OPEC and its allies including Russia have yet to react to Trump's call, with OPEC+ delegates pointing to a plan already in place to start raising oil output from April.
Both benchmarks posted their first decline in five weeks last week as concerns eased about sanctions on Russia disrupting supplies.
Goldman Sachs analysts said they do not expect a big hit to Russian production as higher freight rates have incentivized higher supply of non-sanctioned ships to move Russian oil while the deepening in the discount on the affected Russian ESPO grade attracts price-sensitive buyers to keep purchasing the oil.
"As the ultimate goal of sanctions is to reduce Russian oil revenues, we assume that Western policymakers will prioritize maximizing discounts on Russian barrels over reducing Russian volumes," the analysts said in a note.
Still, JP Morgan analysts said some risk premium is justified given that nearly 20% of the global Aframax fleet currently faces sanctions.
"The application of sanctions on the Russian energy sector as leverage in future negotiations could go either way, indicating that a zero risk premium is not appropriate," they added in a note.
On another front, the U.S. swiftly reversed plans to impose sanctions and tariffs on Colombia, after the South American nation agreed to accept deported migrants from the United States, the White House said in a statement late on Sunday.
Sanctions could have disrupted oil supply, as Colombia last year sent about 41% of its seaborne crude exports to the U.S., according to data from analytics firm Kpler.
