Oil steady as Iran sanctions offset trade war impact
london — Oil prices steadied on Friday as concerns that a global trade dispute will slow economic growth and demand for fuel were balanced by US sanctions against Iran that look set to tighten supply.
Benchmark Brent crude oil was unchanged at $72.07 a barrel by 0945GMT. US light crude was down five cents at $66.76 a barrel.
Escalating trade disputes are casting a shadow over the outlook for economic growth and pushing up the dollar, the currency in which oil is traded internationally, making it more expensive for consumers using other currencies.
Major emerging economies including China, India and Turkey have seen their currencies slump.
“Oil, like other commodities, is responding to dollar strength this morning,” Harry Tchilinguirian, head of oil strategy at French bank BNP Paribas in London, told the Reuters Global Oil Forum.
For the week, Brent is set for a near two per cent fall, while US light crude is heading for a drop of nearly three per cent.
“The market seems to be focused on fears of reduced demand from China, partially due to the effects of the trade wars between China and the United States,” said William O’Loughlin, investment analyst at Australia’s Rivkin Securities.
In the latest round of levies, China said it would impose additional tariffs of 25 per cent on $16 billion worth of US imports.
Although crude was removed from the list, replaced by refined products and liquefied petroleum gas, analysts say Chinese imports of US crude will fall significantly.
But these worries are balanced by the introduction of US sanctions against Iran, which from November will include oil exports and are likely to tighten global supply.
72.07 $ Per barrel was the price of Brent crude in London