Crude oil prices rose on Monday following US President Donald Trump’s threats to impose 25% to 50% tariffs on Russia’s oil exports and other OPEC+ countries. Despite the increase, geopolitical tensions may take a backseat to economic concerns, as fears of recession could dampen oil demand.
The West Texas Intermediate (WTI) and Brent futures jumped 0.6% at market open before retreating due to risk-off sentiment. Trump’s auto tariffs are set to take effect on Wednesday, which has intensified global economic concerns. The threat of “bombing” on Iran if the country refuses to make a nuclear deal also raised geopolitical tensions.
Oil prices have risen approximately 5% since mid-March following the US strike on Houthis militants in Yemen. Trump’s comments over the weekend added further pressure on crude prices, as he threatened to impose tariffs on countries purchasing Venezuela’s oil and Russia’s oil exports.
The Organisation of the Petroleum Exporting Countries (OPEC) is set to begin unwinding its voluntary oil production cuts of 2.2 million barrels per day in April. However, Trump’s tariff threats may reduce supplies from key OPEC+ members, potentially offsetting the planned increase in output.
Analysts warn that economic concerns, including fears of higher inflation and weaker growth, could outweigh supply-side factors. The threat of recession has raised concerns about oil demand, which could dampen prices. Despite this, geopolitical tensions remain a driving force behind crude oil prices.
Source: https://www.euronews.com/business/2025/03/31/how-could-the-european-central-bank-react-to-trumps-trade-tariffs