U.S. benchmark crude oil prices surged by 2.65% on Monday, with West Texas Intermediate (WTI) rising to $71.20, up $1.84 as of 11:47 a.m. ET. This spike came amid concerns that President Trump might follow through on his threats of additional tariffs on Russian oil buyers, as well as the potential for military action against Iran.
Brent crude also saw an increase, climbing 1.47% to $74.71.
The price jump is linked to two major geopolitical issues: a ceasefire deal between Russia and Ukraine, and a potential new agreement regarding Iran’s nuclear program.
On Sunday, Trump warned that he could impose secondary sanctions on Russia’s energy sector if the U.S. and Russia fail to agree on a ceasefire over the war in Ukraine.
“If Russia and I are unable to reach an agreement to stop the violence in Ukraine, and if I believe Russia is responsible — which may not be the case — but if I believe they are to blame, I will impose secondary tariffs on all Russian oil exports,” Trump said in an NBC interview. His remarks followed Russian President Vladimir Putin’s statements questioning the legitimacy of Ukrainian President Volodymyr Zelensky’s government and suggesting a change in leadership could be necessary for a peace deal. Putin has consistently said that Ukrainian elections must happen before any ceasefire can be negotiated.
In addition to the situation with Russia, Trump also warned earlier on Monday that he might bomb Iran if a new nuclear deal is not reached.
“If they don’t make a deal, there will be bombing,” Trump told NBC. “It will be bombing the likes of which they have never seen before.” Despite this threat, Trump acknowledged that the U.S. and Iran were still negotiating, but he also reiterated a 25% tariff threat against Tehran.
Trump’s comments come after Iran’s official refusal to engage in direct talks with the U.S., stating that any negotiations would depend on U.S. actions.
Meanwhile, oil executives in the Dallas Fed Energy Survey last week predicted that WTI would average $68 per barrel over the next six months, $70 per barrel over the next year, and $74 per barrel over the next two years. They also expect prices to reach $80 per barrel within five years.
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