Trade tensions drop oil prices amid US‑China tariff conflict
Oil prices on US exchanges, after initially short-lived increases, are falling again. CNBC reported that futures on Thursday fell by more than 4 per cent. This decline is attributed to concerns about the escalation of the trade war between the United States and China.
A barrel of West Texas Intermediate oil for May delivery on the NYMEX in New York fell on Thursday to just under $60, and a Brent barrel on ICE for June delivery dropped to approximately $62,50, according to CNBC.
Oil prices began to decline again after rising momentarily following Donald Trump's change in stance on tariffs. On Wednesday, the US President announced a 90-day pause on implementing increased tariffs, excluding China. During this period, tariffs for nearly all US trading partners are set at 10 per cent.
Although oil prices on exchanges briefly increased, they soon began to fall again due to the anticipated escalation of the trade war between China and the US. China is the world's largest importer of crude oil, and higher US tariffs could adversely influence fuel and petrochemical consumption in the country.
Zhou Mi, an analyst at the Chaos Research Institute assesses that given that it is unlikely the US-China trade war will deescalate soon, yesterday's rebound in oil prices on the markets will not develop into a more sustained trend.
China prepares retaliation
The Chinese government decided on Wednesday to raise retaliatory tariffs on imported US goods from 34 to 84 per cent. This was in reaction to the US administration's implementation of tariffs totalling 104 per cent.
China's position is clear and consistent: the door to talks is open, but dialogue must be conducted on an equal basis with mutual respect, stated He Yongqian, a spokeswoman for the Ministry of Commerce in Beijing, on Thursday.
During the press conference, the spokeswoman strongly condemned the actions of US President Donald Trump, who imposed tariffs totalling 125 per cent on imports of Chinese products. She highlighted that although "in a tariff war or trade war, there are no winners," China will "fight to the end" in response to Washington's subsequent decisions.
