The oil market is frozen in anticipation of Trump’s new tariffs
2 April 10:09
Oil prices stabilized on Wednesday amid low trading activity after falling the previous day, Komersant ukrainskyi reports citing Reuters. The market is waiting for new tariffs from the US, which are to be announced at 22:00 Kyiv time. These tariffs could deepen the global trade war, potentially limiting demand for crude oil.
Futures for Brent crude oil rose by 1 cent to $74.50 per barrel as of 05:46 Kyiv time after yesterday’s decline of 0.4%. Futures for US West Texas Intermediate crude rose 3 cents to $71.23 after falling 0.4%.
The drop in prices was thus offset by Trump’s threats to impose secondary tariffs on Russian oil, as well as the tightening of sanctions against Iran on Monday as part of his administration’s “maximum pressure” campaign to reduce Iranian exports.
It is worth noting that on Monday, prices reached their highest level in five weeks
Trump’s “day of liberation”
The White House confirmed on Tuesday that US President Donald Trump will impose new tariffs on Wednesday, but did not provide any details on the size and scope of these trade barriers.
“Oil prices rose by almost 2% in March but remained stable as markets await clarification on Trump’s plans for universal tariffs. Low trading volumes in the oil market reflect growing concerns about these tariffs, despite some positive demand signals from mainland China,”
– said Priyanka Sachdeva, senior market analyst at Phillip Nova.
For several weeks, Trump has been calling April 2 “Liberation Day” that will bring new tariffs that could shake up the global trading system. The White House announcement is scheduled for 22:00 Kyiv time.
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Stocks in the US
Oil and fuel stocks in the US provide a contradictory picture of supply and demand in the world’s largest producer and consumer.
According to sources citing the American Petroleum Institute, crude oil inventories in the US increased by 6 million barrels in the week ended March 28. However, gasoline stocks declined by 1.6 million barrels, and distillate stocks fell by 11,000 barrels, the sources said.
Forecasts and expectations
“The announcement (on tariffs) could affect prices both upwards and downwards, although the balance of risks is tilted to the downside, given that weaker-than-expected tariff measures are unlikely to cause a significant increase in Brent prices, while stronger-than-expected measures could cause a significant sell-off,”
– BMI analysts said in a note.
“If the tariff pressure proves successful for Trump and contributes to a ceasefire between Russia and Ukraine, there is a scenario in which these punitive measures could be short-lived, with tariffs potentially favorable for crude oil and negative for refined products. For now, oil prices remain subdued, awaiting the official reaction of major importing countries to the new proposed tariffs,”
– said Janiv Shah, Vice President, Commodity Markets, Rystad Energy.
