Investing.com – Oil prices steadied on Friday despite the intensifying trade tension between the U.S. and China.
Brent Oil Futures for October delivery edged up slightly by 0.01% to $72.08 per barrel at 12:25AM ET (04:25 GMT). Meanwhile, Crude Oil WTI Futures for September delivery remained at $66.81 a barrel.
The Chinese Ministry of Commerce announced a 25% tariff on $16 billion worth of U.S. goods including passenger cars and motorcycles on Wednesday. Beijing’s announcement came after the Trump administration confirmed a list of $16 billion worth of Chinese goods that would be hit with tariffs in the previously day. China’s Ministry of Commerce said in a statement that the U.S.’s decision is “very unreasonable,” and that China has no choice but to retaliate.
“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 U.S,” said William O’Loughlin, investment analyst at Australia’s Rivkin Securities.
Meanwhile, some experts remained optimistic that the recent trade dispute would not significantly impact the outlook of oil prices. Jeff Currie, global head of commodities research at Goldman Sachs (NYSE:GS), told CNBC in an interview that “The reason why [China didn’t slap tariffs on U.S. crude exports] is it can be redirected. You’re not going to impact oil because there’s so many producers, so many consumers.”
In other news, Iran threatened to disrupt oil shipments through the Strait of Hormuz, a waterway for oil exports from the Middle East after the U.S. implements the economic sanctions announced on Tuesday. The sanctions include crude sanctions that will limit Iran’s oil exports from November onwards.
“If Iran decided it had nothing left to lose because U.S. sanctions are effectively killing Iranian oil exports and prioritized looking strong at home over all else, there would be a large, short-term spike in the price of oil,” said Jacob Shapiro, director of analysis at Geopolitical Futures.
Elsewhere, Iraq’s crude production surged to its highest level in 13 months in July to 4.46 million barrels per day, according to the Iraqi State Oil Marketing Organization (SOMO). The country has also increased its exports to 3.5 million barrels per day in July.
Kurdistan is also reported to exceed SOMO’s estimation and exported over 316,000 barrels per day last month.