Iran's 25% Tariff Threat Rekindles Oil Tension
Oil prices hit their highest level since November after US President Donald Trump threatened to impose 25% tariffs on goods from countries that continue to do business with Iran, following a wave of deadly unrest in the OPEC member nation. Brent traded near $64 per barrel after surging more than 6% in the last three sessions, while WTI remained below $60.
This rise marked a reversal after oil had fallen for five consecutive months due to market concerns about a global supply glut. However, earlier this year, the situation changed: US intervention in Venezuela and escalating tensions in Iran led market participants to re-attach a risk premium to oil prices, even though Tehran authorities claimed the protests had begun to subside.
While trading remained calm on Tuesday due to the lack of clarity regarding Trump's policy details, the tariff threat is considered to have the potential to trigger larger knock-on effects—particularly the risk of a renewed trade war with China. This is significant because China is the world's largest oil importer and also a major buyer of Iranian oil. Fearing a sudden price spike, traders have sought protection by increasing Brent call options to very high levels.
On the supply side, the potential disruption to Iranian exports is not significant—it accounts for less than 2% of global demand—but it is enough to alleviate concerns about oversupply. Iranian oil stocks at key export terminals have also reportedly fallen since the beginning of the year, indicating a shift in supply amid the turmoil. Meanwhile, supplies from Kazakhstan have also been disrupted by bad weather, facility maintenance, and infrastructure damage related to drone attacks, adding to the market's caution. (az)
Source: Newsmaker.id
