Oil prices climbed in the global commodity market on Monday, propelled by US President Donald Trump’s decision to delay imposing hefty tariffs on the European Union.
This tariff postponement, combined with escalating geopolitical tensions from the Russia-Ukraine conflict, has fueled a bullish outlook for crude oil prices.
The international benchmark, Brent crude, edged up by 0.01%, reaching $64.46 per barrel. Meanwhile, the US benchmark, West Texas Intermediate (WTI), gained approximately 0.2%, trading at $61.69 per barrel, compared to $61.56 in the prior session.
The White House announced that Trump extended the deadline for a 50% tariff on EU imports to July 9, following a phone call with European Commission President Ursula von der Leyen.
Von der Leyen confirmed the discussion, stressing that the EU is poised to act “swiftly and decisively” in trade negotiations with the US. She added that securing a favorable trade deal would necessitate the additional time until July 9.
Previously, Trump had warned of implementing the EU tariffs as early as June 1, citing unfair trade practices that he argued disadvantaged American businesses. The delay marks a temporary reprieve in US-EU trade tensions, though deep-seated disputes over tariffs, subsidies, and regulations remain unresolved.
This shift has bolstered oil prices by lifting global economic sentiment and strengthening expectations for sustained energy demand.
Simultaneously, intensifying violence in Ukraine is adding a significant risk premium to the oil market. Ukrainian officials reported that at least 12 people were killed and over 60 injured early Sunday in a second night of widespread Russian drone attacks.
The Ukrainian Air Force intercepted 266 of 298 drones launched by Russia, along with 47 missiles, according to their statement. Russia’s Defense Ministry countered that it executed a “massive” strike targeting Ukrainian military-industrial sites and strategic communication hubs.
This surge in conflict has amplified supply concerns, further driving the upward momentum in crude oil prices.
However, market caution persists due to fears of a potential oversupply in the oil sector. The OPEC+ coalition, comprising OPEC members and key non-OPEC producers, is slated to convene on June 1 to deliberate a possible output increase. Such a move could reshape oil price trends depending on the cartel’s final decision.
Trump’s tariff delay and the Russia-Ukraine conflict are key catalysts behind the recent oil price surge, though OPEC+’s upcoming meeting looms as a critical factor for future market dynamics.
