Oil Prices Surge as Trump Threatens Tariffs on Russia and Bombing Iran
WTI crude oil prices rose by 2.65% to $71.20 amid concerns of potential U.S. tariffs on Russian oil and military threats against Iran. President Trump is contemplating secondary sanctions if a ceasefire with Russia is not achieved, while also warning of bombings against Iran should a new nuclear deal fail. Energy executives predict rising WTI prices over the next few years.
On Monday, U.S. benchmark crude oil prices experienced a significant increase of 2.65%, with West Texas Intermediate (WTI) reaching $71.20, an increase of $1.84 by 11:47 a.m. ET. This surge is attributed to concerns over President Trump potentially imposing additional tariffs on Russian oil buyers, coupled with fears of military action against Iran. Brent crude also saw a rise, climbing 1.47% to $74.71.
The geopolitical landscape involves two critical deals: one concerning a ceasefire in the Russia-Ukraine conflict, and the other regarding Iran’s nuclear program negotiations. On Sunday, President Trump indicated that he might impose secondary sanctions on Russia’s energy sector should a ceasefire not mutually be reached between the U.S. and Russia. He stated, “If Russia and I are unable to come to an agreement to stop the violence in Ukraine… I will impose secondary tariffs on all Russian oil exports.”
President Trump has expressed his frustration over Russian President Vladimir Putin’s comments regarding the legitimacy of the Ukrainian government, suggesting potential leadership changes to facilitate a peace agreement. Putin has maintained that any ceasefire must be preceded by elections in Ukraine.
Furthermore, Trump threatened military action against Iran if a new nuclear deal does not materialize, asserting, “If they don’t make a deal, there will be bombing… the likes of which they have never seen before.” He indicated that negotiations are ongoing; however, he extended a threat of a 25% indirect tariff against Tehran.
Iran has officially declined to participate in direct negotiations, stating their willingness to discuss would depend on U.S. actions. Meanwhile, oil and gas executives surveyed in the latest Dallas Fed Energy report anticipate WTI prices averaging $68 per barrel over six months, $70 over twelve months, and reaching $80 per barrel in five years.
In summary, crude oil prices have experienced a notable increase due to geopolitical tensions involving President Trump’s tariff threats against Russian oil and potential military action against Iran. The ongoing discussions around the Russia-Ukraine ceasefire and Iran’s nuclear program remain significant factors influencing market sentiments. Additionally, projections by energy executives indicate a steady increase in WTI prices over the coming years, reflecting expectations of a stabilizing market, contingent on geopolitical developments.
Original Source: oilprice.com
