West Texas Intermediate (WTI), the U.S. crude oil benchmark, is trading around $65.45 in the early Asian session on Tuesday, extending its decline amid fears that U.S. tariffs on Canada, Mexico, and China could weaken global economic growth and curb energy demand.
Last week, President Donald Trump signed an executive order exempting Canadian and Mexican goods from tariffs under the United States-Mexico-Canada Agreement (USMCA) while increasing duties on Chinese imports. In response, China imposed retaliatory tariffs on agricultural products from both the U.S. and Canada.
The ongoing uncertainty surrounding U.S. trade policies and the potential for a global economic slowdown are weighing on WTI prices. “There are recession talks for the U.S., and it’s very concerning for the macro picture,” said John Kilduff, partner at Again Capital in New York.
However, potential U.S. sanctions on Iran and Russia could offer some support to crude prices. The Trump administration is seeking to cut off Iranian oil exports in an effort to pressure Tehran into scaling back its nuclear program. In response, Iran’s Supreme Leader, Ayatollah Ali Khamenei, stated on Saturday that his country would not be coerced into negotiations.
