Oil prices dip as China retaliates with new tariffs
Oil prices on the New York commodity exchange are falling after China imposed tariffs on American goods, including oil and liquefied natural gas. In addition to concerns about a trade war, investors are also worried about U.S. sanctions on Iran, report brokers.
A barrel of West Texas Intermediate crude for November delivery costs $72.65 on the NYMEX in New York, a decrease of 0.07%. Brent on ICE for December is priced at $76.05 per barrel, down by 0.20%.
Concerns about a trade war in the markets
Over the weekend, U.S. President Donald Trump signed an order imposing tariffs on goods from Canada, Mexico, and China.
The order includes 25% tariffs on goods from Canada and Mexico, with the exception of petroleum products, which are subject to a lower 10% tariff. An additional 10% tariff is also on Chinese goods. The tariffs on Canada and Mexico have been suspended for one month.
Meanwhile, China imposed tariffs on a range of U.S. products and announced an investigation into Google shortly after Donald Trump announced a 10% tariff on Chinese goods.
Authorities in Beijing imposed a 15% tariff on U.S. oil exports and liquefied natural gas and a 10% charge on American oil and agricultural equipment.
Alongside the trade war between the U.S. and China, investors are concerned about U.S. sanctions on Iran after President Trump signed an order on Tuesday to return to a policy of "maximum pressure" on Iran.
Trump said the sanctions order is very harsh on Iran but added that he would prefer not to impose them.
Donald Trump decided on 'maximum pressure' on Iran
Although the text of the document is not yet known, the "maximum pressure" policy on Iran during President Trump's first term included harsh sanctions against Tehran, including sanctions on the trade of Iranian oil.
Trump stated that he does not want to be tough on Iran, but he must be, as it is too close to obtaining nuclear weapons.
The American president expressed readiness for talks with Tehran and Iranian leaders but stressed that he cannot allow the acquisition of nuclear weapons.
The president also commented on the tariffs imposed on China on Tuesday. Regarding China's retaliatory tariffs on cars, oil, gas, and coal, he said they were "okay."
Despite previous announcements that he would discuss this matter on Tuesday with Chinese President Xi Jinping, Trump said the conversation would occur "at the appropriate time" but noted that he is "not in a hurry."
Analysts point out that oil could quickly lose all its profits since the beginning of the year due to concerns about global economic growth—related to U.S. tariffs on its trading partners.
Meanwhile, in the U.S., oil reserves are growing significantly, according to data from the American Petroleum Institute (API). U.S. inventories of this raw material increased by 5 million barrels last week, calculated API.
