Oil surges as tension in Iran escalates

Brent crude’s price has surged after US President Donald Trump vowed 25% tariff on countries doing business with Iran.

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Trump said he is imposing a 25% tariff on goods from countries that are still “doing business” with Iran, in a move to ramp up pressure on the Islamic Republic, amid nationwide protests demanding a change in regime.

“Effective immediately, any country doing business with the Islamic Republic of Iran will pay a tariff of 25% on any and all business being done with the United States of America,” Trump wrote on social media platform Truth Social.

Iranian Foreign Minister Abbas Araghchi has warned the US of immediate retaliation, after Trump threatened to take military action, as the OPEC member continued its crackdown on protestors, Al Jazeera Arabic reported.

Iran is the fourth-largest OPEC member, producing around 3.2 million b/d of crude oil. The news has moved Brent’s price higher, “raising the possibility of some form of intervention by the US,” two analysts from ING Bank noted.

The decision could strain Washington’s commercial ties globally, given Iran’s trade links with neighbouring countries, as well as major economies including India, Turkey and China.

“China is a key buyer of Iranian oil. Whether this secondary tariff threat is sufficient to push China away from Iranian oil remains to be seen,” ING Bank’s analysts added.

Iranian Parliament Speaker Mohammad Bagher Ghalibaf also warned that Washington would face significant retaliation, should it, or Israel, step in amid the unrest.

By Aparupa Mazumder

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