By Arunima Kumar

HOUSTON (Reuters) -Oil prices were up on Friday but retreated from session highs after U.S. President Donald Trump threatened sanctions on Russia if it fails to reach a cease-fire with Ukraine.

Trump said in a post on Truth Social that he was "strongly considering" sanctions on Russian banks and tariffs on Russian products because its armed forces continue attacks in Ukraine.

Brent crude futures were up $1.10, or 1.58%, to $70.56 a barrel by 1605 GMT (10:05 CST). U.S. West Texas Intermediate futures were up $1.06, or 1.6%, at $67.42.

In early trade, Brent jumped as high as $71.40, while WTI hit $68.22 after Russia's Deputy Prime Minister Alexander Novak told reporters that the OPEC+ producer group will go ahead with its April increase but may then consider other steps, including reducing production.

"If you don't like the price of oil, wait a minute," said Phil Flynn, senior analyst with the Price Futures Group.

Flynn said oil prices moves on OPEC+ and possible Russia sanctions overwhelmed other news, including delays in Israel and Hamas seeking a permanent cease-fire.

"I think it's been overwhelmed by Russia news," Flynn said. "It's all Russia, Russia, Russia."

For the week, Brent was down 3.8%, set for its biggest weekly decline since the week of November 11. WTI is set to finish as much as 3.6% down for its biggest weekly drop since the week of January 21.

"The caution expressed by Mr Novak is simply another way of reiterating OPEC+'s conditionality clause relative to 'market conditions'. These conditions will dictate whether or not they keep to the plan of incrementally winding down their voluntary cuts," said Harry Tchilinguirian at Onyx Capital Group.

Brent prices fell to their lowest since December 2021 on Wednesday after U.S. crude inventories rose and OPEC+ announced its decision to increase output quotas.

The group had said it intended to proceed with a planned April output increase, adding 138,000 barrels per day to the market.

In other supply news, comments from U.S. Treasury Secretary Scott Bessent indicated that the U.S. aims to reduce Iranian crude exports to a trickle.

Trump's administration is considering a plan to inspect Iranian oil tankers at sea, Reuters reported on Thursday, citing sources familiar with the matter, continuing efforts to drive down Iranian oil exports to zero.

Global markets have been whipsawed by fluctuating trade policy in the U.S., the world's biggest oil consumer.

On Thursday Trump suspended the 25% tariffs he had imposed on most goods from Canada and Mexico until April 2, though steel and aluminum tariffs would still take effect on March 12.

While the delay in tariffs offers some relief, the market is still walking a tightrope between policy uncertainty and oversupply concerns, Rystad Energy's Mukesh Sahdev said in a note on Thursday.

In the U.S., job growth picked up in February and the unemployment rate edged up to 4.1%, but growing uncertainty over trade policy and deep federal government spending cuts could erode the labor market's resilience in the months ahead.

(Reporting by Erwin Seba, Arunima Kumar, Mohi Narayan and Colleen Howe; additional reporting by Paul Carsten in LondonEditing by David Goodman, Kirsten Donovan and David Gregorio)