09:23 AM EST, 03/03/2025 (MT Newswires) -- Oil prices rose early on Monday, a day before the promised imposition of U.S. tariffs on goods from the country's largest trading partners, while geopolitical issues remain in focus following a fiery meeting Friday between Ukraine President Volodymyr Zelensky and U.S. President Donald Trump.

West Texas Intermediate crude oil for April delivery was last seen up US$0.40 to US$70.16 per barrel, while May Brent crude was up US$0.43 to US$73.24.

Trump has promised to impose 25% tariffs on imports of goods from Canada and Mexico beginning on Tuesday, along with a 10% levy on energy imports from Canada, which supplies about 20% of U.S. oil demand. Trump is also raising the tariff on imports from China to 20% from 10%. Canada and Mexico have said they will impose retaliatory tariffs on American imports, threatening a large-scale trade war that could boost inflation and slow growth in all three countries.

The economic uncertainty and concerns over rising supply is prompting funds to abandon oil holdings, with Friday's Commitment of Traders report for the week ending Feb.25 showing long positions for oil at a 15-year low.

"The selling of crude oil was particularly aggressive, not least in WTI, where the net long on the main CME-traded contract slumped to a near 15-year low at just 67.6k contracts, a far cry from the 250k contracts hedge funds held on 21 January. During this five-week period, the combined net long in WTI (CME and ICE) and Brent has almost halved to 260k contracts, as the technical outlook continued to deteriorate amid worries about a global trade war's impact on demand and OPEC+ considers when to start tapering production cuts," Ole Hansen, head of commodity strategy at Saxo Bank noted.

Prospects for successful peace talks to end Russia's war in Ukraine dimmed on Friday after a televised Oval Office meeting between Zelensky, Trump and Vance erupted into a shouting match are still being assessed, with Trump seeming to throw his support to Russia, raising the prospect of easing sanction on Russia's oil exports.

"After Friday's shocking scenes from the Oval Office, one could actually hear the sounds of popping corks in the Kremlin and the humming of an increasing number of oil rigs in Siberia...After the first month in office, it has become obvious that the administration will continue its confrontational policies on several fronts, including oil. We believe it will impede oil demand but what's more important is how influential forecasters assess the past 5 weeks," PVM Oil Associates noted.