Oil prices remain at a one-month high due to US trade restrictions
28 March 07:35
The global oil market is in a state of tension due to tough geopolitical and trade decisions of the United States. As of Friday, oil prices are near a one-month high, which is a consequence of the recent actions of the administration of US President Donald Trump, "Komersant Ukrainian" reports with reference to Reuters.
Thus, futures for Brent crude oil are at $73.95 per barrel, and the US WTI is at $69.84 per barrel. These figures are the result of the introduction of 25 percent US duties on goods from countries that buy Venezuelan oil and the tightening of US sanctions against Iranian oil trade.
New trade restrictions have caused significant changes in the global oil market. In particular, trade in Venezuelan oil with China has stopped, and the Indian company Reliance Industries, according to sources, plans to suspend oil imports from Venezuela.
The US Energy Information Administration recorded a decrease in crude oil reserves by 3.3 million barrels to 433.6 million barrels, which exceeded analysts’ expectations.
Forecast
However, despite the current rise in prices, experts are cautious.
Analysts believe that large-scale US trade restrictions pose significant risks of an economic downturn, which could negatively affect global oil demand. Therefore, they do not predict a steady long-term rise in oil prices in the current geopolitical context.
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Trump’s trade wars
Donald Trump’s administration has imposed trade restrictions on China, Mexico, and Canada, the three largest trading partners of the United States. The US government imposed an import duty of 25% of the value of goods from Canada and Mexico, and a 20% duty on goods from China. An additional duty is imposed on Canadian energy products.
These measures have caused concern among U.S. companies that depend on metals imports from Canada and Mexico. They are expected to look for alternative sources of supply, in particular in the Middle East, India, Chile, and Peru, which could lead to higher prices for aluminum and copper in the United States.
In addition, Canadian consumers have responded to the imposition of duties by boycotting American goods, canceling trips to the United States and refusing to buy American alcohol.
Economists warn that such trade disputes could slow global economic growth and cause inflation. Stock markets in the Gulf countries earlier reacted with a decline due to fears of a possible trade conflict. The cryptocurrency market also collapsed earlier.
The latest tariff initiatives of the US president include a 200% duty on French wine and 25% on goods from countries that buy Venezuelan oil. It is this last step that has a decisive impact on the markets this week.
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