Oil prices fall amid concerns over escalating trade tensions
Brent crude futures were down 22 cents, or 0.31 percent, at IUSD 69.97 a barrel.
US West Texas Intermediate crude lost 27 cents, or 0.39 percent, to USD 68.11 a barrel.
The drop in oil prices comes amid escalating trade tensions between the US and Brazil, with the US president threatening to impose tariffs of up to 50 percent on Brazilian exports to the US market.
In contrast, Brazilian President Luiz Inacio Lula da Silva warned that his country may have a "reciprocal" response to these massive tariffs, which Washington intends to implement starting next August.
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Times of Oman
a day ago
- Times of Oman
Trump announces 30% tariffs on EU goods as trade talks stall
Washington DC: The United States is set to impose a 30% tariff on all goods from the European Union from August 1, US President Donald Trump said on his Truth Social platform on Saturday. The EU had been prepared for such a move, which comes a day after Trump told Canada's Prime Minister Mark Carney that he would impose a 35% tariffs on Canadian imports. The 27-member bloc and the US failed to reach an agreement to strike a comprehensive trade deal, including zero-for-zero tariffs on industrial goods. In addition to the tariffs on EU goods, Trump posted another letter to his platform, declaring a 30% tariff rate on goods from Mexico beginning August 1 as well. The US president said the trade relationship with the EU has been "unfortunately, far from Reciprocal." As such, "we will charge the European Union a Tariff of only 30%," he said. Trump has frequently described tariffs as charges on other countries. However, the burden falls on consumers within the US, as tariffs make imported goods more expensive and thus less competitive. "Please understand that the 30% number is far less than what is needed to eliminate the Trade Deficit disparity we have with the EU," he added, referring to the difference in goods imported from the EU and goods exported to the EU. Trump invited the bloc to negotiate further, writing in his letter to European Commission President Ursula von der Leyen that high tariff rates would be dropped if "the European Union, or countries within the EU, decide to build or manufacture within the United States." Trump has spent the week sending letters to trading partners, announcing new rates for a number of countries like Japan, South Korea, Canada and Brazil. Trump imposed a 20% import tax on all EU-made products in early April as part of a set of tariffs targeting countries with which the US has a trade imbalance. Hours after the nation-specific duties took effect, Trump put them on hold until July 9 at a standard rate of 10% in a bid to calm turbulent financial markets and allow time for negotiations. But the president expressed frustration at talks with the EU. In May, he threatened to impose a tariff rate of 50% on EU goods into the US. That would cause a price hike on everything from Italian leather goods to French cheese to German electronics in the US. Then Trump announced that universal tariffs that were due to kick in July 9 would be delayed until at least the beginning of August. The EU currently faces 50% US tariffs on its steel and aluminium exports, 25% on cars and car parts and 10% on most other products. How has the EU reacted? Ursula von der Leyen said the EU is prepared to take the necessary steps to safeguard its economic interests if the US proceeds with the 30% tariff rate. In a statement, the European Commission President said that the bloc remained ready "to continue working towards an agreement by August 1." "We will take all necessary steps to safeguard EU interests, including the adoption of proportionate countermeasures if required," she added. French President Emmanuel Macron said his government shares the European Commission's "very strong disapproval" of Trump's announcement, which came despite "weeks of intense engagement." "France fully supports the European Commission in the negotiations, which will now intensify," Macron posted on X, adding that he still hopes "a mutually acceptable agreement" will be reached before August 1. The French president added that the bloc would need to speed up "the preparation of credible countermeasures" if no agreement is reached before the new tariffs take effect. The EU has the ability to enact the Anti-Coercion Instrument (ACI) which allows it to retaliate against countries seeking to pressure its members. It has been repeatedly brought up as a possible response to Trump's threats. The ACI can limit access to companies from those countries to public procurement tenders and target services trade or investment. Germany's Economy Minister Katherina Reiche, meanwhile, warned that the US tariffs "would hit European exporting companies hard." She also said that they would have a "strong impact" on the US economy and consumers, as she urged for a "pragmatic outcome" to be reached "quickly."
Observer
a day ago
- Observer
Gaza truce talks stall over Israel withdrawal; 17 killed in aid hub
GAZA: Talks aimed at securing a ceasefire in Gaza are stalling over the extent of Israeli forces' withdrawal from the Palestinian enclave, Palestinian and Israeli sources familiar with the negotiations in Doha said on Saturday. The indirect talks over a US proposal for a 60-day ceasefire are nonetheless expected to continue, the sources said. In Gaza, medics said 17 people trying to get food aid were killed on Saturday when Israeli troops opened fire, the latest mass shooting around a US-backed aid distribution system that the UN says has resulted in 800 people killed in six weeks. Witnesses who spoke to Reuters described people being shot in the head and torso. Reuters saw several bodies of victims wrapped in white shrouds as family members wept at Nasser Hospital. The Israeli military said its troops had fired warning shots, but that its review of the incident had found no evidence of anyone hurt by its soldiers' fire. Delegations from Israel and Hamas have been in Qatar for a week in a renewed push for an agreement which envisages a phased release of hostages, Israeli troop withdrawals and discussions on ending the war. US President Donald Trump, who hosted Israeli Prime Minister Benjamin Netanyahu over the past week, had said he hoped for a deal soon. But the Israeli and Palestinian sources described longstanding issues that remain unresolved. A Palestinian source said that Hamas had rejected withdrawal maps which Israel had proposed that would leave around 40 per cent of Gaza under Israeli control, including all of the southern area of Rafah and further territories in northern and eastern Gaza. Two Israeli sources said Hamas wanted Israel to retreat to lines it held in a previous ceasefire before it renewed its offensive in March. The Palestinian source said matters regarding aid and guarantees on an end to the war were also presenting a challenge. The crisis could be resolved with more US intervention, the source said. Hamas has long demanded an agreement to end the war before it would free remaining hostages; Israel has insisted it would end the fighting only when all hostages are released and Hamas is dismantled as a fighting force and administration in Gaza. — AFP
Times of Oman
a day ago
- Times of Oman
Oman's economy to grow to 2.2% by the end of this year
Muscat: The real growth rate of the Omani economy will rise from 1.7 percent by the end of 2024 to 2.2 percent by the end of this year (the final year of the Tenth Five-Year Plan, according to the Ministry of Economy's Economic Forecasts 2025 report. The report further indicated Oman's gross domestic product (GDP) at constant prices could rise from OMR38.3 billion at the end of 2024 to OMR39.2 billion at the end of 2025. This is attributed to the improved performance of oil activities, which resumed growth during the year by 1.3 percent, after witnessing a decline by 3 percent at the end of last year. The contribution of oil activities to the GDP is expected to rise from OMR11.9 billion in 2024 to OMR12 billion by the end of this year. Non-oil activities are expected to grow by 2.7 percent this year compared to 3.9 percent in 2024. The report further expects continued rise in the added value of non-oil activities, reaching OMR28.6 billion by the end of 2025, compared to OMR27.9 billion in 2024. In the medium term, the team's forecasts indicate that Oman's economic growth momentum will continue in 2026 as well as in 2027, amid the ongoing implementation of strategic projects in the non-oil sectors and the expected increase in oil production. The report further indicated that inflation rate, based on the consumer price index (CPI) in the, is likely to see a small increase reaching 1.3 percent by the end of this year compared to 0.6 percent in 2024. The ministry said that this rate will remain within the target range of the Tenth Five-Year Plan (2021-2025), with the government continuing to subsidise prices of basic goods and services and the expectation of relative stability in commodity prices in global markets. Regarding the global economic front, the International Monetary Fund (IMF) made significant adjustments to its economic growth forecasts in its April 2025 World Economic Outlook, lowering its global economic growth forecast for the current year from 3.3 percent in its January 2025 report to 2.8 percent in its April 2025 report. This reflects the direct and indirect impacts of new policies on global trade and global demand amidst heightened risks that require a continuous reassessment of forecasts, policies, and economic priorities. The IMF's recent revisions cover most global economies at varying levels. The Fund expects advanced economies to grow at a slower pace from 1.8 percent in 2024 to 1.4 percent in 2025, driven by cautious expectations for the US economy, which is the main driver of growth in this group. In the developing and emerging markets group, the IMF lowered its growth forecast to 3.7 percent in 2025, compared to 4.3 percent in 2024. This decline reflects increased pressure on supply chains due to higher tariffs. This reduction was significantly concentrated in the Chinese economy due to declining US demand for Chinese exports, the continuing repercussions of the real estate crisis, and weak levels of consumption and investment. Regionally, although the International Monetary Fund lowered its growth forecasts for the Middle East and North Africa (Mena) region, the IMF was more optimistic compared to other economic groups. Growth in the region's economies is expected to rise to approximately to 3 percent in 2025, compared to 2.4 percent in 2024. The improved growth in the region is attributed to the recovery in the growth rate of the economies of the Gulf Cooperation Council (GCC) countries, with expectations of rising oil production levels and continued improvement in the non-oil sectors, supported by the expansion of strategic investments in economic diversification and renewable energy projects. Regarding the outlook for global economic growth, the future trajectory of the global economy is likely to be influenced by developments in protectionist trade policies, leading to increased levels of uncertainty and market volatility. If tariffs escalate, this could lead to a significant slowdown in global growth and trade, with repercussions for governments' financial policies and the interest rate orientations of major central banks. The report indicated that, under the fundamental changes announced by the United States this year to its tariff regime, a 10 percent base tariff will be applied to imports of goods from all countries, with an additional 'reciprocal tariff' applied to approximately 90 countries. The additional tariffs use an unconventional methodology to achieve the concept of 'reciprocity,' as they are calculated based on multiple criteria, most notably the volume of bilateral trade and the structure of customs duties imposed on US goods in those countries' markets. Regarding the impact of this policy on the economies of the GCC countries, the imposed customs tariff of 10 percent is among the lowest compared to other targeted economies. Therefore, the direct impact of these new customs tariffs is expected to be relatively limited. However, there remains the possibility of indirect effects resulting from reciprocal tariffs between the United States and its trading partners, which could collectively negatively impact global economic activity levels. Potential impacts may include fluctuations in oil prices, in addition to disruptions in global supply chains. The report explained that by analysing foreign trade data between the Sultanate of Oman and the United States of America during 2014-2024, the balance of trade generally tends in favour of the American economy, with the exception of 2020, 2021, and 2022, when the trade exchange movement between the two countries achieved a trade surplus in favour of the Sultanate of Oman during these years. However, the Omani economy, like other global economies, may be vulnerable to indirect repercussions from tariffs. Potential shifts in the global market could impact the Omani economy's trading partners. Slowing global growth is expected to lead to lower oil prices and reduced demand for oil. Tariffs could also exacerbate inflationary pressures in the US economy, potentially prompting the Federal Reserve to back down or postpone plans to cut interest rates, leading to higher imported inflation. The report explained that, in the context of global trade variables and their potential impact on trade flows, global supply chains, and import and export costs, the Sultanate of Oman is an attractive investment destination, given its strategic geographic location linking Asian, African, and European markets. It also possesses advanced infrastructure and free zones that attract foreign investment. Re-export levels can also be increased by leveraging this unique geographic location and advanced infrastructure, as it can attract the exchange of goods from countries affected by customs duties and re-export them to target markets.
