Oil slides on Iran nuclear talks, fresh US tariff uncertainty

[SINGAPORE] Oil prices slid 1 per cent on Monday (Feb 23) with the US and Iran headed for a third round of nuclear talks, easing concerns about a potential conflict, while US President Donald Trump created uncertainty for global growth and fuel demand with a new round of tariff hikes.

Brent crude futures slid 75 US cents, or 1.05 per cent, to US$71.01 a barrel by 8.55 am while US West Texas Intermediate (WTI) crude futures were at US$65.74 a barrel, down 74 US cents, or 1.11 per cent.

Trump said on Saturday that he would raise a temporary tariff from 10 to 15 per cent on US imports from all countries, the maximum level allowed under the law, after the US Supreme Court struck down his previous tariff programme.

“The tariff news over the weekend has resulted in some risk aversion flows this morning, which can be viewed in the price of gold and US equity futures and this is weighing on the crude oil price,” IG Markets analyst Tony Sycamore said.

The tariff decision offset growing concerns of a military conflict between the US and Iran, which pushed Brent and WTI prices up more than 5 per cent last week.

Iran and the US will hold a third round of nuclear talks on Thursday in Geneva, Oman’s Foreign Minister Badr Albusaidi said on Sunday.

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Sycamore said the announcement supported his view that the US and Iran are currently engaged in a diplomatic game of cat and mouse.

“I don’t believe that the US wants to attack Iran, given the risks it brings in terms of regional destabilisation and, closer to home, voter discontent ahead of the November midterms,” Sycamore said.

Iran has indicated it is prepared to make concessions on its nuclear programme in return for the lifting of sanctions and recognition of its right to enrich uranium, a senior Iranian official said. REUTERS