Oil Prices Forecast Shaped by U.S. Tariffs and Trade Deal Gaps
Crude prices steadied Friday after dropping over 1% the day before, as investors evaluated the economic fallout of a newly signed executive order by President Donald Trump. The order imposes 10% to 41% tariffs on imports from countries like India, Canada, and Taiwan that failed to reach trade agreements by the August 1 deadline. Tariff-exempt partners include the EU, South Korea, Japan, and the U.K.
While the immediate market reaction has been muted, analysts caution that these levies could raise domestic prices, slow economic growth, and indirectly dent oil demand. The latest U.S. inflation data already suggests rising costs from earlier tariffs, adding weight to concerns about sustained price pressure.
Geopolitical Risk: Russian Crude Buyers Face Threats of Sanctions
Beyond tariffs, supply risk is in focus after President Trump threatened 100% secondary sanctions on buyers of Russian crude, escalating pressure on countries like China and India.
JP Morgan analysts estimate these threats could endanger up to 2.75 million barrels per day of Russian seaborne exports. With China and India ranking as the world’s second- and third-largest crude consumers, any disruption could significantly tighten global supply and fuel bullish sentiment.