Oil prices record limited gains despite the attack on "Hamas" and Trump's tariff pressures
Global oil markets witnessed a modest increase in prices on Wednesday, September 10, driven by two geopolitical factors: the Israeli attack on Hamas leaders in Doha and U.S. President Donald Trump's request for Europe to impose tariffs on Russian oil buyers. However, weak fundamental expectations for the market limited the extent of these gains.
Brent crude futures recorded an increase of 61 cents (0.90%), reaching $67 per barrel. Meanwhile, U.S. West Texas Intermediate crude futures rose by 60 cents (0.96%), recording $63.23 per barrel.
This increase followed previous gains of 0.6% at settlement on Tuesday, in response to the Israeli attack targeting Hamas leaders in Qatar, which the Qatari Prime Minister considered a "threat to peace talks." Trump's statements also provided another impetus, as two sources mentioned that he urged the European Union to "impose a 100% tariff on China and India" as part of a strategy to pressure Russian President Vladimir Putin.
China and India are major buyers of Russian oil, which has helped support Moscow's coffers since its invasion of Ukraine in 2022.
Despite these factors, the price response was limited. The two crude types sharply rose by 2% immediately after the attack, but later retreated after the United States informed Qatar that such an event "would not be repeated on its territory."
Tony Sycamore, a market analyst at IG, comments on this weakness in a note: "The modest reaction in crude oil prices to this news, along with doubts about President Trump's statements regarding the possibility of tightening sanctions on Russian oil buyers, makes crude oil vulnerable to price declines."
On one hand, analysts at the London Stock Exchange Group believe that trade actions could push prices higher, noting that: "Expanding tariffs to include other major buyers like China could disrupt Russian crude oil exports and create a global supply shortage, indicating a potential rise in oil prices."
However, they caution: "Nevertheless, there remains uncertainty about how far the administration will go, as strict measures could conflict with efforts to control inflation and impact the Fed's decision to lower interest rates."
Traders are awaiting the Federal Reserve meeting next week, with expectations of an interest rate cut, which could boost economic activity and increase demand for oil.
However, on the other hand, the U.S. Energy Information Administration warned that global prices will face significant pressures in the coming months due to rising inventories with increased production from OPEC and its allies, reflecting weakness in the actual fundamentals of the market.
