Oil Prices Pare Early Morning Losses Driven By Trump’s Proposal Of 50% Tariffs On EU: Traders Eye US-Iran Talks

Oil prices witnessed a see-saw movement on Friday after declining early morning on U.S. President Donald Trump’s proposal for a 50% tariff on the European Union beginning June 1 and a potential output hike by the OPEC+. However, prices pared the early morning losses and rebounded by mid-morning.

Brent futures maturing in July dipped 0.62% in early morning trade but then reversed to trade higher by 0.76% to $64.95 per barrel on Friday. At the same time, WTI futures maturing in July rebounded to trade 0.92% higher at $60.77 per barrel.

Trump accused the European Union of deploying various unfair practices such as high VAT taxes, corporate penalties, and regulatory barriers, and said the bloc was formed for the primary purpose of taking advantage of the U.S. on trade.

“Our discussions with them are going nowhere,” Trump said. “Therefore, I am recommending a straight 50% tariff on the European Union, starting on June 1, 2025. There is no tariff if the product is built or manufactured in the United States.”

Meanwhile, oil traders also expect that OPEC+ could unwind the remaining 2.2 million barrels per day (bpd) voluntary production cut by the end of October.

According to a Reuters report, the group has already hiked output targets by about 1 million bpd for April, May, and June.

Investors are also monitoring Friday's developments in the U.S.-Iran nuclear negotiations in Rome, which could determine the fate of Iran's oil supply.

Iranian Foreign Ministry spokesman Esmaeil Baghaei reportedly told state TV in Rome that the current round of talks is very sensitive. “... we need to see what issues will be raised by the other party ... and based on that, we will proceed with our positions,” he said, according to a Reuters report.

PVM oil analyst Tamas Varga told Reuters that the growing conviction of OPEC+ adhering to the accelerated output increase throughout July and the ongoing U.S.-Iran nuclear talks add to the bearish sentiment.

The United States Oil Fund LP (USO) and the ProShares Ultra Bloomberg Crude Oil (UCO) traded over 1% higher on Friday morning but pared the early morning losses at the time of writing.

Also See: Workday Stock Slides Despite Earnings Beat As Wall Street Turns Cautious On Outlook: Retail Turns Extremely Bullish

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