Oil prices are up on Monday morning as investors digest the latest tariff threat issued by U.S. President Trump. He announced that all steel and aluminum imports would be subject to 25% tariffs.
This comes just a week after he announced tariffs on Canada, Mexico and China, then suspended those for the neighboring countries the next day.
Brent crude futures climbed 54 cents, or 0.7%, to $75.20 a barrel by 0734 GMT while U.S. West Texas Intermediate crude was at $71.50 a barrel, up 50 cents, or 0.7%. The market posted its third consecutive weekly decline last week on concerns about a global trade war.
China’s retaliatory tariffs on some U.S. exports are due to take effect on Monday. So far there is no sign of any thawing of relations between Washington and Beijing.
Despite the climb in oil prices, investors appear to be taking a cautious approach to the new tariffs for now, said Tony Sycamore, a Sydney-based analyst at IG.
“The market has realised tariff headlines are likely to continue in the weeks and months ahead,” he said, adding that there was an equal chance they could be walked back or even increased at some point in the near future.
“So perhaps investors are coming to the conclusion it’s not the best course of action to react to every headline negatively.”