Greenland & Trump's Tariffs Keep Oil Markets Cautious
Oil prices remained stable in the Asian session on Monday after last week's wild swings due to concerns about Iranian supply risks. Market focus has now shifted to US President Donald Trump's tariff threats against Europe, which are linked to his push to acquire Greenland.
In early trading, Brent for March contracts held around $64.10 per barrel. WTI was not traded due to the US market holiday, resulting in quieter activity and limited price movements.
Last week, oil prices surged sharply amid concerns that unrest in Iran could disrupt supplies from the Middle East—a region that accounts for a significant portion of global oil production. However, the increase later "shrank" as the market began to assess the risk of supply disruptions as less severe than feared.
Pressure eased after Trump stated there would be no US military intervention in the near future, causing the geopolitical risk premium that had been attached to oil prices to slowly dissipate. As a result, prices fell back from their peaks before stabilizing towards the end of the week.
Now, the spotlight has shifted to trade: Trump has threatened tariffs on eight European countries (including France, Germany, the UK, and several Nordic countries) that reject his Greenland plan. Trump announced 10% tariffs starting February 1, potentially increasing to 25% in June if no deal is reached—opening the door to a potential transatlantic trade conflict.
Europe is reportedly preparing a response, ranging from halting trade talks to reviving a large-scale retaliatory tariff package, even the option of using “anti-coercion” retaliatory instruments. With the World Economic Forum in Davos also taking place this week, the market expects geopolitical and trade noise to intensify—while market participants remain on the lookout for a US interest rate cut, which could boost oil demand if financial conditions ease.
5 Key Points:
- Oil prices stabilized after last week's volatility stemming from Iranian supply concerns.
- Brent held around $64.10, WTI closed for a US holiday.
- Iran risks eased after Trump said there was no imminent military intervention.
- Focus shifts to Trump's tariff threats to Europe regarding Greenland: 10% (February 1) - 25% (June).
- Europe ready to retaliate; Tensions could rise as world leaders gather at the WEF Davos. (asd)
Source: Newsmaker.id
