Crude Oil Prices Surge Amid Trump’s Threats on Russia and Iran
U.S. crude oil prices rose 2.65% due to fears of tariff threats on Russian oil and military action against Iran. Trump indicated possible sanctions on Russian oil if violence in Ukraine continues while also threatening to bomb Iran. The Dallas Fed Energy Survey forecasts rising WTI prices in the upcoming years.
On Monday, U.S. benchmark crude oil prices surged by 2.65%, with West Texas Intermediate (WTI) reaching $71.20, reflecting a rise of $1.84 as of 11:47 a.m. ET. This increase was driven by apprehensions surrounding potential tariffs on Russian oil buyers from former President Trump, alongside concerns of military action against Iran. Brent crude also saw an uptick of 1.47%, landing at $74.71.
The situation is complicated by two geopolitical issues: a proposed ceasefire regarding the Russia-Ukraine conflict and a new agreement concerning Iran’s nuclear activities. Trump indicated that if a ceasefire is not achieved with Russia, secondary sanctions on Russia’s energy sector could be imposed. “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,” Trump stated during an NBC interview.
Trump also criticized Russian President Putin’s remarks, which questioned the legitimacy of Ukrainian President Volodymyr Zelensky’s government and suggested that legitimate peace talks would require changes in Ukrainian leadership. Putin has been adamant that elections must precede any ceasefire agreement.
Markets were further unsettled by Trump’s Monday threats to take military action against Iran if a new nuclear agreement fails to materialize. “If they don’t make a deal, there will be bombing,” Trump warned during a phone call with NBC, while simultaneously extending a 25% tariff threat towards Iran.
Iran’s government has officially rejected the notion of engaging in direct negotiations with the U.S., stating that their willingness to communicate is contingent on U.S. actions. Meanwhile, the Dallas Fed Energy Survey indicated that oil and gas executives predict WTI will average $68 per barrel over six months, $70 over 12 months, and rise to $74 over two years, potentially reaching $80 within five years.
In summary, the increase in oil prices is significantly influenced by geopolitical tensions, particularly related to Russia and Iran. The potential for tariffs and military action as articulated by former President Trump has raised concerns in the market. Further, energy executives foresee gradual increases in WTI prices over the coming years, reflecting ongoing global uncertainties.
Original Source: oilprice.com
