President Donald Trump’s trade war has created uncertainty in the oil market, causing drastic fluctuations in crude oil prices and decreasing investor confidence. Following Trump’s announcement of tariffs on numerous countries in April, U.S. crude oil prices hit a low but rebounded after he announced a 90-day pause on high tariffs. However, the uncertainty surrounding negotiations with numerous countries still looms.
The fluctuating tariffs have caused the U.S. benchmark crude oil prices to fall, threatening Trump’s goal of boosting domestic production. Shale oil companies, which currently need oil prices above $65 per barrel to drill profitably, are at risk of reducing their activity if prices remain in the low $60s range. The steel tariffs imposed by Trump could also increase costs for new wells and further strain the industry.
The unpredictable nature of Trump’s tariff policy has led to criticism from oil producers and a significant drop in stock prices for companies in the industry. However, Energy Secretary Chris Wright believes that the administration’s efforts to reduce uncertainty and lower producers’ costs could ultimately benefit the industry. Despite the short-term fear and uncertainty caused by the tariffs, Wright remains optimistic about the long-term prospects for oil producers in the U.S.
Note: The image is for illustrative purposes only and is not the original image of the presented article.
