Over the weekend, U.S. President Donald Trump threatened tariffs on Russian oil if Moscow blocks a Ukraine deal, and today oil markets are waiting to see if that threat is a bluff.

UBS wealth management CIO Mark Hafaele says the threat cannot be dismissed.

He said Trump last week set the stage with his 25% secondary tariffs on countries buying oil or gas from Venezuela, effective April 2.

“If similar tariffs are enacted and enforced on either Russia or Iranian crude, this could further complicate an already difficult market for big oil consumers like India and China, potentially adding to pressure on energy costs,” wrote Hafaele.

He adds this supports UBS’s expectations for oil to trade closer to $80/bbl over the coming two quarters, as well as its preference for gold as both a geopolitical and inflation hedge.
Source: Reuters