UBS Chief Investment Officer Mark Hafaele has highlighted the seriousness of U.S. President Donald Trump’s recent threats regarding Russian oil. Over the weekend, Trump warned that he might impose tariffs on Russian oil if Moscow disrupts negotiations concerning Ukraine.
This statement has left oil markets in a state of anticipation, wondering whether the threat is genuine or merely a bluff. Hafaele pointed to Trump’s earlier decision to impose a 25% secondary tariff on nations buying oil or gas from Venezuela, which is set to take effect on April 2.
He indicated that if similar tariffs were implemented on Russian or Iranian crude, it could significantly complicate the already challenging landscape for major oil consumers such as India and China. The potential for increased energy costs due to these tariffs is a pressing concern.
Moreover, Hafaele emphasized that such geopolitical tensions support UBS’s expectations for oil prices to stabilize around $80 per barrel over the next two quarters. In light of these uncertainties, UBS has reiterated its preference for gold as a safeguard against geopolitical risks and inflation.
As the situation unfolds, market participants will closely monitor Trump’s actions and their potential ramifications for global energy markets. The interconnectedness of oil prices and geopolitical developments continues to be a focal point for investors as they navigate this intricate environment.