[BENGALURU] Brent and West Texas Intermediate (WTI) crude climbed more than US$1 on Friday (Apr 11) after US Energy Secretary Chris Wright said the US could end Iran’s oil exports as part of an effort to bring the Islamic Republic to terms over its nuclear program.
Brent crude futures settled at US$64.76 a barrel, up US$1.43 or 2.3 per cent. US WTI crude finished at US$61.50 a barrel, up US$1.43 or 2.4 per cent. “Strict enforcement of restrictions on Iranian crude exports would reduce global supply,” said Andrew Lipow, president of Lipow Oil Associates. “I suspect China will continue to buy oil from Iran.”
Wright’s comments provided upward momentum for oil prices, following volatile price swings this week as US President Donald Trump’s new tariff regime forced traders to reassess the geopolitical risks facing the crude market.
“The US being a geopolitical risk is new for the market,” said John Kilduff, partner with Again Capital. “We’ll have this reordering of the chessboard like we did after Russia invaded Ukraine.”
China announced on Friday it will impose a 125 per cent tariff on US goods starting on Saturday, up from the previously announced 84 per cent, after Trump raised tariffs against China to 145 per cent on Thursday.
Trump this week paused heavy tariffs against dozens of other trading partners, but a prolonged dispute between the world’s two biggest economies is likely to reduce global trade volumes and disrupt trading routes, weighing on global economic growth and reducing demand for oil.
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“Although the implementation of some tariffs, excluding those on China, was delayed by 90 days, the market damage had already been inflicted, leaving prices struggling to regain stability,” said Ole Hansen, head of commodity strategy at Saxo Bank.
The US Energy Information Administration on Thursday lowered its global economic growth forecasts and warned that tariffs could weigh heavily on oil prices. It reduced its US and global oil demand forecasts for this year and next year.
China’s 2025 economic growth is expected to fall relative to last year’s pace, a Reuters poll showed, as US tariffs raise pressure on the world’s top oil importer.
The impact of tariffs could be “catastrophic” for developing countries, the director of the United Nations’ trade agency said.
ANZ Bank analysts forecast oil consumption will decline by 1 per cent if global economic growth falls below 3 per cent, said senior commodity strategist Daniel Hynes. REUTERS
