U.S. crude oil prices surged 2.65% to $71.20 due to geopolitical tensions involving Trump’s tariff threats on Russia and military action against Iran. A ceasefire deal on the Russia-Ukraine conflict and negotiations pertaining to Iran’s nuclear program are crucial factors. Oil executives forecast rising prices with WTI expected to average $68 in six months and $80 in five years.
On Monday, U.S. benchmark crude oil prices experienced a notable increase of 2.65%, with West Texas Intermediate (WTI) reaching $71.20, an increase of $1.84 at 11:47 a.m. ET. This surge is attributed to fears surrounding President Trump’s potential implementation of further tariff threats on Russian oil, alongside concerns regarding military actions related to Iran. Brent crude oil also saw an uptick, rising 1.47% to $74.71.
Two significant geopolitical factors are influencing this market movement: a ceasefire negotiation over the Russia-Ukraine conflict and a new agreement concerning Iran’s nuclear program. In a statement made late Sunday, President Trump indicated that he would consider imposing secondary sanctions on Russia’s energy sector if a ceasefire agreement is not reached regarding the ongoing war in Ukraine.
Trump expressed, “If Russia and I are unable to come to an agreement to stop the violence in Ukraine, and if I believe Russia is responsible — which may not be the case — but if I believe they are to blame, I will impose secondary tariffs on all Russian oil exports,” during an interview with NBC. Additionally, he reacted to comments made by Russian President Vladimir Putin, who questioned the legitimacy of Ukrainian President Volodymyr Zelensky’s administration, implying that leadership changes in Ukraine may be essential for a peace agreement.
Further escalating market anxieties, Trump threatened military action against Iran if a new nuclear deal is not finalized. “If they don’t make a deal, there will be bombing,” he stated in a telephone interview with NBC, warning of unprecedented bombings. Despite these threats, Trump acknowledged that negotiations were ongoing, yet he extended a 25% indirect tariff threat against Tehran.
This escalation follows Iran’s official rejection of direct negotiations with the U.S., stating that its willingness to engage depends on the U.S.’s actions. Concurrently, the Dallas Fed Energy Survey indicated that oil and gas executives anticipate WTI prices to average $68 per barrel over the next six months, $70 per barrel over the next year, and $74 for two years, with expectations of hitting $80 within five years.
In summary, recent geopolitical developments have exerted considerable influence on oil prices, particularly with the threats made by President Trump regarding both Russia and Iran’s energy sectors. The prospects of additional tariffs and military action have contributed to market volatility, while industry executives project a rising trajectory for oil prices over the coming years.
Original Source: oilprice.com
