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Trump's tariffs are approaching, and US crude oil stops falling and rises hidden worries, and oil prices will usher in a critical window!
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Hello everyone, today XM Foreign Exchange will bring you "[XM official website]: Trump's tariffs are eouu.cning, US crude oil stops falling and rises hidden worries, and oil prices will usher in a critical window period!". Hope it will be helpful to you! The original content is as follows:
During the Asian and European trading session on Wednesday (August 6), U.S. crude oil futures fluctuated up 1.23%, and are now trading at US$65.76 per barrel, ending the decline for four consecutive trading days. As Trump imposed tariffs on countries buying Russian oil approached, bullish forces have rebounded significantly today.
The Trump administration's tariffs on countries that purchase Russian oil are expected to be changed to take effect on August 8 this week 10 days after July 29. The policy was originally set as "If Russian President Putin does not reach peace with Ukraine within 50 days, 100% tariffs will be imposed on countries that purchase Russian oil." The deadline is now advanced. Trump's foreign envoy Steve Witkov will travel to Russia to eouu.cnmunicate on Wednesday.
This tariff is mainly applied to imports from Asian importers. According to energy data eouu.cnpany Vortexa, India imports crude oil from Russia accounts for 36% of its market; at the same time, the two countries are also one of the United States' largest trading partners, and official U.S. data shows that the United States imported $526 billion worth of goods from these two countries last year.
In the Russian-Ukrainian conflict in 2022, Asian importers increased their purchases of Russian crude oil, after Western countries drastically reduced their imports of Russian fuel, causing their prices to fall. In addition, when Trump first announced his tariff plan on July 15, U.S. crude oil futures briefly fell 2%, reflecting the market's doubts about the actual implementation of the policy.
Tariff policy itself: If strictly implemented, it may force Asian importers to reduce Russian oil imports and be forced to turn to high-priced crude oil in the Middle East, which will in turn trigger a global supply shortage of 1.5 million barrels per day., thereby pushing up global oil prices.
The response strategy of Asian importers: it may evade sanctions through third-country transshipment (such as India imports Russian oil through the UAE), weakening the actual effect of US tariffs.
Russia's export adjustment: It may partially offset the supply gap by dumping crude oil at a discount of more than US$20 per barrel to Southeast Asian and African countries (such as Ural crude oil is discounted by US$20 for a long time eouu.cnpared to Brent crude oil).
The market questioned the sustained policy: The US economy is highly dependent on goods from Asian importers, and imposing tariffs on Asian goods may push up the prices of consumer goods (such as iPhones). As Giovanni Stanovo, a eouu.cnmodity analyst at UBS Wealth Management, said, "American consumers will be dissatisfied with this." This pressure could force tariffs to be lifted due to domestic economic pain, exacerbating policy repetition.
Two-way pull on crude oil prices: concerns about supply gap may push up oil prices; while Asian importers evade sanctions and Russia's discount exports have suppressed price increases, forming a long-short game.
The US crude oil market is indirectly under pressure: Tariffs may push up the cost of electromechanical equipment imported from Asia, thereby pushing up the cost of shale oil extraction and weakening the United States' own ability to increase production. Clayton Seger, a senior researcher in energy and geopolitics at the Center for Strategic and International Studies on the bipartisan think tank, also pointed out that the expected tariffs "will lead to intensifying U.S. inflation" and put American eouu.cnpanies in higher import costs.
The market volatility has risen: the repetitiveness of policies (such as after Trump announced the tariff plan on July 15, oil prices rose first and then fell, and eventually fell due to investors' expectations that negotiations may be reached within the 50-day buffer period) makes oil prices highly sensitive to policy details (implementation strength, exemption clauses), and it is difficult to form a clear trend in the short term.
Summary: As of August 8 this week, oil prices will usher in a critical window period, and special attention is needed. Crude oil prices will fluctuate in the contradiction between "supply gap risk" and "doubtful policy effectiveness", and the market "rise first and then fall" on July 15 may repeat. If Asian importers explicitly reduce Russian oil imports or the spread of geopolitical risks, oil prices may rise in stages; if channels for avoiding sanctions are unobstructed or the United States softens policies due to domestic pressure (such as Trump may cancel them soon after the implementation of punishment measures), oil prices may fluctuate the center of the fluctuation may move downward.
In the medium and long term, we need to continue to pay attention to the game between the response measures of Asian importers and the US economic tolerance, and policy repetition is still the core variable that dominates the uncertainty of the crude oil market.
The above content is about "[XM official website]: Trump's tariffs are eouu.cning, US crude oil stops falling and rising, and oil prices will usher in a critical window period!" All content is carefully eouu.cnpiled and edited by the editor of XM Forex. I hope it will be helpful to your transactions! Thanks for the support!
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