WTI crude oil prices rose 2.65% to $71.20 due to fears surrounding Trump’s potential tariffs on Russian oil and military threats against Iran. Brent crude also saw gains. Geopolitical negotiations regarding Russia-Ukraine and Iran’s nuclear program are influencing the market, with industry forecasts predicting gradual price increases for WTI over the next several years.
On Monday, U.S. benchmark crude oil prices surged by 2.65%, with West Texas Intermediate (WTI) reaching $71.20, an increase of $1.84 by 11:47 a.m. ET. This rise is attributed to concerns over former President Donald Trump’s potential tariff threats against Russian oil buyers and the looming possibility of military action against Iran. Similarly, Brent crude also experienced gains, rising by 1.47% to $74.71.
Two significant geopolitical negotiations are influencing these market dynamics: first, a ceasefire agreement concerning the Russia-Ukraine conflict, and second, a new arrangement regarding Iran’s nuclear capabilities. Trump indicated that he might impose secondary sanctions on Russia’s energy sector if there is no ceasefire reached with respect to the ongoing war.
In an interview with NBC, Trump stated, “If Russia and I are unable to come to an agreement to stop the violence in Ukraine, and if I believe Russia is responsible… I will impose secondary tariffs on all Russian oil exports.” He also rebuked remarks made by President Putin questioning the validity of Ukrainian President Volodymyr Zelensky’s government, asserting that a leadership change in Ukraine might be necessary for peace talks to advance.
Market concerns intensified as Trump threatened on the same day to initiate bombings in Iran should a new nuclear deal fail. “If they don’t make a deal, there will be bombing, the likes of which they have never seen before,” he remarked during a telephone interview, despite acknowledging ongoing negotiations and reiterating a 25% tariff threat toward Iran.
Iran, however, has formally rejected the notion of direct negotiations with the United States, declaring that its willingness to engage depends on American actions. In a separate development, a recent Dallas Fed Energy Survey reported that oil and gas executives anticipate an average price of $68 per barrel for WTI over the next six months, $70 over the next twelve months, and an increase to $74 over two years, with a potential rise to $80 in five years.
In summary, the recent surge in WTI prices is driven by geopolitical tensions surrounding U.S.-Russia relations and a possible conflict with Iran. Trump’s warnings of tariffs and military action have spurred market reactions, emphasizing the significance of these global events on oil prices. Additionally, the outlook provided by industry experts suggests a cautious yet optimistic long-term price trajectory for crude oil.
Original Source: oilprice.com
