West Texas Intermediate (WTI) crude oil prices rose to approximately $70.80 during the early Asian session on Tuesday, extending its recovery as market participants focused on potential supply disruptions.
US Imposes New Sanctions on Iran
The US government introduced fresh sanctions on Monday, with the Treasury and State Departments targeting multiple entities and individuals, including the head of Iran’s National Oil Company. The move is fueling concerns of supply constraints, which have contributed to the uptick in WTI prices. The sanctions are expected to add pressure to an already tight global supply situation, particularly in the Middle East.
Tariff Concerns and Global Trade War Risks
Despite the sanctions, traders remain cautious, keeping an eye on upcoming developments regarding US tariff policies. President Donald Trump confirmed that tariffs on imports from Mexico and Canada will proceed when a one-month delay expires next week. Fears of escalating trade tensions and the potential for a global trade war could limit any further price gains for crude oil, adding a layer of uncertainty to market sentiment.
US-Russian Relations and Potential Peace Talks
Additionally, thawing US-Russian relations and the prospect of peace talks over the ongoing Russia-Ukraine conflict may place downward pressure on WTI prices. A resolution could pave the way for reduced sanctions on Russia, potentially leading to a full resumption of Russian oil exports. Such a scenario could ease supply tightness and exert downward pressure on prices.
As global geopolitical tensions remain fluid, oil traders are likely to continue navigating a complex environment marked by both supply concerns and trade-related risks.
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