China's tariffs hit US oil as trade tensions rise
Oil prices on the New York commodity exchange are dropping after China imposed tariffs on American goods, including oil and liquefied natural gas. Brokers report that investors are also worried about US sanctions on Iran.
On the NYMEX in New York, a barrel of West Texas Intermediate crude oil for November deliveries costs $72.65, a decrease of 0.07 percent. Brent on ICE for December is priced at $76.05 per barrel, down 0.20 percent.
Concerns about a trade war in the markets
Over the weekend, US President Donald Trump signed an order imposing tariffs on goods from Canada, Mexico, and China.
The order includes 25 percent tariffs on goods from Canada and Mexico, with the exception of petroleum products, which are subject to a lower 10 percent tariff. An additional 10 percent tariff is also applied to Chinese goods. The tariffs on Canada and Mexico have been suspended for one month.
Meanwhile, China imposed tariffs on a range of US products and announced an investigation into Google shortly after Donald Trump announced a 10 per cent tariff on Chinese goods.
Authorities in Beijing imposed a 15 percent tariff on US oil exports and liquefied natural gas and a 10 percent charge on American oil and agricultural equipment.
Alongside the trade war between the US and China, investors are concerned about US sanctions on Iran after US President Donald 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 Donald 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 could not allow this acquisition.
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 US tariffs on its trading partners.
Meanwhile, in the US, oil reserves are growing significantly, according to data from the American Petroleum Institute (API). US inventories of this raw material increased by 5 million barrels last week, calculated API.
