Background on Donald Trump and His Relevance
Donald Trump, the former President of the United States, continues to make headlines even after his term ended. His recent speech at the United Nations (UN) has once again brought him into the spotlight, particularly due to his stern warnings against Russia and his appeal to European nations to cease oil purchases from Moscow.
Trump’s Speech and Its Impact on Oil Prices
Oil prices soared on Tuesday, following Trump’s speech at the UN where he reiterated his threats against Russia and urged Europeans to stop buying oil from Moscow. According to John Kilduff of Again Capital, “Trump’s harsh words against Russia today triggered a surge in oil prices.”
- Brent crude: The oil price for November delivery in the North Sea rose by 1.59%, reaching $67.63.
- West Texas Intermediate: The US oil benchmark, for November delivery, increased by 1.81% to $63.41.
Trump stated before the UN General Assembly, “If Russia fails to reach an agreement to end its war with Ukraine, the US is ready to impose significant tariffs.” He further added that Europe must follow suit and stop all energy purchases from Russia.
Since the start of the conflict in 2014, the European Union has drastically reduced its reliance on Russian hydrocarbons. However, Hungary and Slovakia still purchase approximately 200,000 barrels of Russian crude daily through a pipeline. Washington aims to affect Moscow’s oil revenues to compel negotiations with Ukraine.
Kilduff explained, “If a specific measure is implemented to prevent Russian oil from reaching the global market, prices will rise. There’s a lot of volatility in the market due to these threats.”
Additional Factors Influencing Oil Prices
Besides Trump’s threats, the Organisation for Economic Co-operation and Development (OECD) upwardly revised its projected global growth for 2025 from 2.9% to 3.2%. This revision is viewed positively for energy demand, further boosting oil prices.
Moreover, the OECD anticipates that the global economy will withstand the storm of tariffs better than initially expected.
Key Questions and Answers
- What caused the recent surge in oil prices? The primary reason was Donald Trump’s renewed threats against Russia during his UN speech, urging Europe to stop purchasing oil from Moscow.
- How are Trump’s threats impacting Russia? The US aims to affect Russia’s oil revenues, intending to pressure Moscow into negotiating an agreement with Ukraine.
- What other factors influenced oil prices? The OECD’s upward revision of the global growth projection for 2025 to 3.2% also contributed to rising oil prices.
