Brent loses as Trump threatens 10% tariff on eight European nations

The front-month ICE Brent contract has declined by $0.50/bbl on the day from Friday, to trade at $63.58/bbl at 09.00 GMT.

IMAGE: Getty Images

Upward pressure:

Brent crude has gained some support amid elevated geopolitical risks in the Middle East.

The US Treasury announced sanctions on Iran’s Secretary of the Supreme Council for National Security and 18 individuals and entities, including a UAE-based shipping firm.

Market participants believe that a potential US intervention in the region could disrupt oil flows from the OPEC member nation.

“The US continues to boost its military presence in the Middle East. At least one aircraft carrier is moving to the region,” ANZ Bank’s senior commodity strategist Daniel Hynes remarked.

Downward pressure:

Brent crude’s price has moved lower following the re-emergence of tariff friction between the US and major European nations.

In a social media post, US President Donald Trump threatened to impose a 10% tariff on eight European countries for opposing US control of Greenland.

The US will charge a 10% import tax on all goods from Denmark, Norway, Sweden, France, Germany, the UK, the Netherlands and Finland from 1 February.

The tariff would increase to 25% on 1 June if no deal is reached by then on the “complete and total purchase of Greenland” by the US, Trump said.

Market analysts warn that high tariffs could dampen global economic growth, eroding oil demand and putting downward pressure on prices.

The headwinds facing Brent are “only getting stronger with President Trump’s latest threat of tariffs on several European countries,” two analysts from ING Bank remarked.

By Aparupa Mazumder

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