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- China imposes 125% tariff on US goods, escalating trade war
- EIA lowers global economic growth and oil demand forecasts
April 11 (Reuters) – Brent and West Texas Intermediate crude climbed more than $1 on Friday after U.S. Energy Secretary Chris Wright said the United States 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 $64.76 a barrel, up $1.43, or 2.26%. U.S. West Texas Intermediate crude finished at $61.50 a barrel, up $1.43 or 2.38%.
“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 U.S. President Donald Trump’s new tariff regime forced traders to reassess the geopolitical risks facing the crude market.
“The U.S. 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% tariff on U.S. goods starting on Saturday, up from the previously announced 84%, after Trump raised tariffs against China to 145% 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.
“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 U.S. Energy Information Administration on Thursday lowered its global economic growth forecasts and warned that tariffs could weigh heavily on oil prices. It reduced its U.S. 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 U.S. 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% if global economic growth falls below 3%, said senior commodity strategist Daniel Hynes.
Reporting by Erwin Seba, Robert Harvey and Sudarshan Varadhan, additional reporting by Arunima Kumar Editing by David Goodman, Kirsten Donovan, Jane Merriman, Nia Williams and Rod Nickel
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