Oil prices edged higher on Monday, recovering from last week’s declines driven by fears of a global trade war. Brent crude futures climbed 1% to $75.40 a barrel, while U.S. West Texas Intermediate crude rose by the same percentage to $71.72 a barrel. Despite the recent downward trend, investors seemed to brush off the latest tariff threats from U.S. President Donald Trump regarding steel and aluminium imports.
Harry Tchilinguiran, head of research at Onyx Capital, noted that market sentiment remains tied to tariff uncertainties, which influence risk appetite and have broader implications for the oil sector. Trump’s plan to impose 25% tariffs on steel and aluminium imports represents another significant escalation in his trade policy approach. While the president recently announced tariffs on Canada, Mexico, and China, he quickly suspended those on Canada and Mexico, adding to market volatility.
Although concerns persist that trade restrictions could slow global economic growth and energy demand, some analysts believe investors are adapting to the ongoing tariff headlines. Tony Sycamore from IG remarked that the market is beginning to realise that such announcements may be retracted or intensified unpredictably, making it impractical to react negatively to every development.
China’s retaliatory tariffs on U.S. exports are set to take effect, with no breakthrough yet in negotiations between Beijing and Washington. Oil and gas traders are lobbying for waivers on U.S. crude and liquefied natural gas imports into China. Meanwhile, Trump stated that the U.S. is making progress with Russia on resolving the Ukraine conflict but provided no details on his discussions with Russian President Vladimir Putin. Sanctions imposed on Russian oil trade in January disrupted Moscow’s crude supply to key buyers, including China and India.
Washington also intensified pressure on Iran last week, with new U.S. Treasury sanctions targeting individuals and tankers involved in exporting Iranian crude to China. Analysts at Citi believe sanctions on Iran and stalled nuclear deal negotiations present upside risks for oil prices, even as Trump seeks to push energy costs lower.
Looking ahead, oil markets face mixed signals. Citi forecasts Brent crude to average between $60 and $65 per barrel in the second half of 2025, predicting Trump’s persistent efforts to reduce energy prices will exert a bearish influence on the market. Despite geopolitical uncertainties, investors are watching for further developments that could shift supply and demand dynamics.
Challenger Energy Group Plc (LON:CGE) is an Atlantic-margin focused energy company, with production, development, appraisal, and exploration assets in the region. Challenger Energy’s primary assets are located in Uruguay, where the Company holds two high impact offshore exploration licences, totalling 19,000km2 (gross) and is partnered with Chevron on the AREA-OFF 1 block. Challenger Energy is quoted on the AIM market of the London Stock Exchange.
