Oil prices are on track for their largest monthly decline since September, as escalating trade tensions, particularly from the U.S., have heightened global uncertainty and dampened market sentiment. Global benchmark Brent crude dropped toward $73 per barrel, marking a more than 4% decrease for the last month. Meanwhile, U.S. West Texas Intermediate (WTI) crude fell below $70, reflecting broader concerns over energy demand.
U.S. President Donald Trump’s recent tariff threats have exacerbated market volatility. Trump announced plans to impose restrictions on imports from Canada and Mexico, including a potential 10% tariff on Canadian energy products starting March 4. He also warned of doubling existing tariffs on imports from China, the world’s largest importer of crude. In response, Beijing vowed to implement countermeasures.
The potential impact of these tariffs on crude oil is multifaceted. The U.S. heavily depends on oil imports from Canada and Mexico to supply its refineries, meaning that tariffs could drive up crude costs. Simultaneously, higher tariffs on other goods could slow economic growth, dampen consumer confidence, and weaken energy consumption.
Brent crude and WTI are both poised for their steepest monthly losses in months, with WTI heading toward six consecutive weeks of declines. The downturn is attributed to concerns over U.S. trade policy and weaker-than-expected economic data. On the supply side, Iraq’s Kurdistan region may restart its pipeline exports, but OPEC+ is widely expected to postpone any production increase.
Regarding Ukraine, President Trump stated that negotiations for a peace deal were progressing, although no final agreement had been reached. He added that the U.S. would be a major partner in developing Ukraine’s energy and mineral resources, including oil, gas, and rare earths.
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