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Oil extends gains amid Trump tariff wave
Oil prices settled higher on Monday as investors weighed U.S. President Donald Trump’s latest threat to impose new tariffs on all steel and aluminum imports, which could hit economic growth and fuel demand.
Brent crude futures rose $1.21, or 1.62%, to settle at $75.87 a barrel.
West Texas Intermediate crude rose $1.32, or 1.86%, to settle at $72.32 a barrel.
The rise came after three weeks of declines on fears of a global trade war.
Trump’s threats and their impact on markets
Trump said he would unveil a 25% tariff on all steel and aluminum imports on Monday, in a further escalation of his trade policy.
A week ago, Trump imposed tariffs on Canada, Mexico and China, but suspended them on neighboring countries the next day, prompting investors to be cautious about his new threats.
Investors have realized that the tariff threats could last for weeks or months, with the possibility of being lifted or increased in the near future, so they are avoiding a quick response, Tony Sycamore, a market analyst at IG, told Reuters.
China’s retaliatory tariffs on some U.S. exports are set to go into effect on Monday, with no sign of progress in trade talks between Washington and Beijing.
Meanwhile, oil and gas traders are seeking exemptions from Beijing for imports of U.S. crude oil and liquefied natural gas.
U.S. pressure on Russia and Iran
Trump also said the United States was making progress with Russia to end the war in Ukraine, but he did not disclose details of his talks with Russian President Vladimir Putin.
On the sanctions front, U.S. measures imposed on Russian oil trade on Jan. 10 have disrupted Moscow’s supplies to China and India, two of its biggest customers. Washington also ratcheted up pressure on Iran last week, with the U.S. Treasury imposing new sanctions on individuals and tankers involved in shipping millions of barrels of Iranian oil annually to China.
