Brent crude oil futures fell toward $75 per barrel on Tuesday after China announced a package of tariffs on a range of U.S. products in response to President Donald Trump's latest trade measures, heightening fears of a prolonged trade war between the world's two largest economies.
Oil down as tensions between US and China rise
The escalating tensions raised concerns over global energy demand, as trade disruptions and economic uncertainty could weigh on industrial activity and fuel consumption.
China’s finance ministry stated it will impose tariffs of 15% on coal and liquefied natural gas (LNG) imports from the U.S. and 10% on crude oil, farm equipment, and certain automobiles, effective February 10. The move came in retaliation for the U.S. implementing a 10% tariff on all Chinese goods starting today, further straining trade relations and adding to market uncertainty.
Tariffs effect
Meanwhile, President Trump temporarily delayed planned levies on Canada and Mexico by a month after both nations agreed to enhance border enforcement and take stronger measures against illegal immigration and drug smuggling. The decision provided short-term relief to North American trade flows but did little to ease broader geopolitical tensions affecting global markets.
Elsewhere, OPEC and its allies, including Russia, upheld their existing oil production plans at a review meeting on Monday, despite Trump's repeated calls for increased output to bring down crude prices. The decision signaled the group’s commitment to balancing supply in the face of market volatility, even as demand outlooks remain uncertain due to geopolitical risks and fluctuating economic conditions. Additionally, supply concerns lingered amid ongoing conflicts in the Middle East, particularly in the Red Sea region, where attacks on shipping vessels have raised fears of potential supply chain disruptions.
