Oil Steady as Trump’s Reciprocal Tariffs Add to Trade Tensions
Oil was steady as the market digested the impact of President Donald Trump’s order on potential reciprocal tariffs on U.S. trading partners.
Brent neared $75 a barrel after a modest drop on Thursday, while West Texas Intermediate was above $71 a barrel. The U.S. president signed a measure to propose new levies on a country-by-country basis. It could take weeks or months to complete, but it raises the prospect of more trade tensions.
Tariffs on Canadian and Mexican crude are set to kick in next month, along with levies on steel, but the U.S. oil industry is confident it can win an exemption from the Trump administration, according to the American Petroleum Institute.
Oil is still headed for a slight gain this week, its first since mid-January, on signs that U.S. sanctions are tightening the flow of Russian crude. However, Trump and his counterpart Vladimir Putin have agreed to talk about ending the war in Ukraine, raising speculation that supply risks could ease.
“Any further escalation in trade tensions, particularly related to new tariffs or retaliatory measures, could impact global economic growth and, as a result, oil demand,” Priyanka Sachdeva, senior market analyst for brokerage Phillip Nova Pte, wrote in a note.
Sanctions on Russia, along with Iran, prompted the International Energy Agency to once again cut its expectations for a global oil surplus this year. The prospect of stronger demand growth in Asia contributed to the IEA’s lower forecast, according to its monthly report released on Thursday.
Source: Bloomberg
