(Bloomberg) -- Oil fell below $65 a barrel as Saudi Arabia and Russia prepared for a clash with allied crude producers over whether to lift output and as China and the U.S. exchanged trade threats.

Futures in New York dropped as much as 1.4 percent after a 2.7 percent decline Friday. Iran says Venezuela and Iraq will join it in blocking a proposal to increase production that’s backed by Saudi Arabia and Russia when OPEC and its allies meet in Vienna this week. The Chinese government said Friday it would impose tariffs on a variety of U.S. goods, including crude oil and gasoline, in response to U.S. President Donald Trump’s $50 billion levy on Chinese imports.

Crude has dropped more than 10 percent from late May amid signs Saudi Arabia and Russia are seeking to lift output curbs that have eliminated a global surplus and boosted prices. Meanwhile, traders are trying to digest the impact from both the U.S. and China issuing tariffs on goods and the threat of a broader trade war between the world’s two largest economies.

West Texas Intermediate crude for July delivery fell as much as 89 cents to $64.17 a barrel on the New York Mercantile Exchange and traded at $64.35 at 9:06 a.m. in Tokyo. The contract declined $1.83 to $65.06 on Friday. Total volume traded was about 8 percent above the 100-day average.

Brent futures for August settlement lost as much as 44 cents to $73 a barrel on the London-based ICE Futures Europe exchange. The contract dropped $2.50 to $73.44 on Friday. The global benchmark crude traded at a $8.97 premium to WTI for the same month.

To contact the reporter on this story: Tsuyoshi Inajima in Tokyo at tinajima@bloomberg.net

To contact the editors responsible for this story: Pratish Narayanan at pnarayanan9@bloomberg.net, Aaron Clark, Anna Kitanaka

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