WTI Prices Surge Following Trump’s Surprise Tariff Pause

WTI

US West Texas Intermediate (WTI) crude oil prices saw a significant rebound after President Donald Trump unexpectedly announced a 90-day pause on most tariffs. This move sent the US light sweet crude benchmark soaring by $5 per barrel within just an hour. As of midday Wednesday, May Nymex WTI was trading at approximately $62.80 per barrel, bouncing back from a four-year low earlier that day.

Trump’s Tariff Pause and Market Reactions

WTI crude prices initially dropped to $55.12 per barrel, marking a 7% decline from Tuesday’s close. This was the lowest price for WTI since February 2021. However, following Trump’s tariff announcement, WTI regained some of its losses, jumping nearly 5% by midday. Despite this recovery, WTI remains about $10 per barrel lower than on April 2, when Trump first unveiled sweeping tariffs on multiple countries.

The pause on tariffs also had a significant impact on US equity markets. Major stock indices, including the S&P 500, Dow Jones Industrial Average, and Nasdaq, all surged by 8-11% following Trump’s announcement. The broader economic concerns stemming from the original tariffs, which had fueled fears of a stagnating US economy, were temporarily alleviated by the tariff suspension.

Impact on Global Tariffs and China's Role

Trump’s tariff action included a 10% baseline tariff on imports from nearly all US trading partners, which took effect on April 5. However, the most significant change was the announcement that tariffs on Chinese imports would be raised to 125%, effective immediately. Trump cited China’s “lack of respect” for global markets as the driving force behind this substantial tariff increase.

The unexpected tariff pause and the escalated pressure on China sent shockwaves through global markets. While the 90-day break on tariffs provides some relief to US trading partners, it is unclear what the long-term impact will be on the global economy, particularly as the trade tensions with China continue to escalate.

Conclusion: A Temporary Relief for Oil Markets

The temporary pause in US tariffs has provided a much-needed relief for WTI prices, which had been in a downward spiral earlier this week. However, the ongoing tension with China and the uncertainty surrounding global trade remain significant factors in determining the future direction of oil prices. As the 90-day pause progresses, market participants will continue to monitor both tariff developments and economic indicators to gauge the stability of global oil markets.

Trump Delays Iran Attacks as Strait of Hormuz Risk Keeps Oil Markets Volatile

Trump

Trump delays Iran attacks, but the energy market still sees high Strait of Hormuz risk. He pushed a threatened strike on Iranian energy plants to 6 April at 8 p.m. ET. Trump said talks were progressing, while Iran continued to dispute that negotiations were happening. As a result, the headline suggested de-escalation, but the market response stayed fragile. 

The immediate oil reaction showed how unstable sentiment remains. WTI briefly fell after Trump’s announcement, then rebounded as traders questioned the durability of any diplomatic pause. Reuters later reported WTI near $99.64 a barrel and Brent at $112.57 as ceasefire doubts persisted. Therefore, oil market volatility still reflects physical risk more than political messaging. 

The larger issue is not only the delay itself. The larger issue is whether Strait of Hormuz flows can normalise. Reuters reported that the waterway carries around 20pc of global oil and gas supplies. That makes any military deadline tied to the strait a direct threat to freight, refining, and industrial input costs worldwide. 

Strait of Hormuz Risk Keeps Energy and Supply Chains Under Pressure

Strait of Hormuz risk remains the core market driver. Even when Trump delays Iran attacks, buyers still face uncertainty over tanker flows and regional infrastructure. That uncertainty affects crude, fuel, petrochemicals, and shipping costs at the same time. Consequently, industrial supply chains cannot treat this as a short-lived political shock. 

Iran’s denial of talks also matters for market confidence. Trump has repeatedly described progress in negotiations, but Iranian officials have publicly rejected that narrative. This gap keeps futures markets vulnerable to sudden reversals. Meanwhile, physical buyers still must plan for disruption, not optimism. 

For metals and mining, the pressure can spread quickly. Higher oil and fuel prices raise mine haulage, smelting, and freight costs. Fertilizer and chemicals can also tighten when Gulf shipping risk rises. Therefore, energy geopolitics can quickly become a raw materials margin problem. 

Trump Delays Iran Attacks, but the Market Still Prices Escalation Risk

Trump delays Iran attacks, yet the delay alone does not remove escalation risk. The new deadline simply extends the period of uncertainty into early April. Traders now have to price both possible diplomacy and possible renewed strikes on Iran energy infrastructure. As a result, the market remains trapped between temporary relief and structural fear. 

This dynamic explains why price moves no longer hold. Initial drops now fade when the physical market doubts a real settlement. Reuters noted that skepticism over ceasefire prospects quickly pulled oil higher again. That pattern suggests risk premiums will stay elevated while the strait remains under pressure. 

The key question is no longer whether rhetoric can move prices. The key question is whether shipping conditions and infrastructure security actually improve. Until that happens, every delay will look more like a trading event than a durable solution. 

The Metalnomist Commentary

This story is bigger than one delayed strike. It shows how energy chokepoints can dominate industrial pricing even before physical damage expands. If Strait of Hormuz risk stays high into April, metals, chemicals, and freight markets will all keep pricing instability. 

EIA Cuts WTI Forecast by $7 on Trade War Fears

Energy Information Administration (EIA)

Energy agency slashes oil demand and production outlook through 2026 amid economic uncertainty

The U.S. Energy Information Administration (EIA) has sharply reduced its West Texas Intermediate (WTI) crude oil forecast due to escalating trade tensions. The benchmark U.S. crude is now expected to average $63.88 per barrel in 2025—down by $6.80 from last month’s estimate—and further decline to $57.48 in 2026, $7.49 below the previous projection.

Trade War Impacts Global Oil Demand

Ongoing trade disputes, especially between the U.S. and China, are significantly curbing global oil consumption. The EIA now expects worldwide demand to be nearly 500,000 barrels per day (b/d) lower in 2025 than forecasted just a month ago. For 2026, the reduction climbs to 620,000 b/d. These cuts reflect growing concerns over economic stagnation tied to U.S. tariffs and China’s retaliatory actions.

The delayed release of the April Short-Term Energy Outlook allowed the EIA to re-run models incorporating President Trump’s latest trade decisions. However, the forecast does not include updates from April 9, when Trump paused the harshest tariffs. Meanwhile, China has imposed new tariffs on U.S. goods, amplifying trade tensions.

Oil Price Forecasts Reflect Broader Weakness

Brent crude also saw significant downward revisions. The international benchmark is now forecast to average $67.68/bl in 2025 and $61.48/bl in 2026. These cuts align with a weakening demand outlook and lower expected production.

The EIA emphasized that its outlook remains “subject to significant uncertainty,” particularly as geopolitical and economic developments evolve rapidly. Banks and market analysts are also trimming their oil price forecasts, indicating broader skepticism in the market.

Lower Supply and Demand Across the Board

The EIA also cut its estimates for both global and U.S. oil production. Global output is expected to reach 104.1mn b/d in 2025 and 105.35mn b/d in 2026, down by 70,000 and 43,000 b/d respectively. In the U.S., domestic production is projected at 13.51mn b/d in 2025 and 13.56mn b/d in 2026—each figure 100,000 to 200,000 b/d lower than prior estimates.

U.S. consumption has been reduced to 20.38mn b/d for 2025 and 20.49mn b/d for 2026, down by 70,000 and 110,000 b/d respectively. These revisions underline the broad impact of trade policies and economic uncertainty on the energy sector.

As oil markets remain highly sensitive to macroeconomic shifts, all eyes are on future U.S.-China negotiations and their influence on crude pricing.

Metal Futures Plunge Amid Rising Global Trade Tensions

LME

New US Tariffs and China's Retaliatory Measures Drive Sell-Off in Base Metals

Base metals on the London Metal Exchange (LME) saw a significant decline on Friday as the global trade environment became more volatile. The new US tariffs and China’s retaliatory actions sparked concerns about a potential full-scale trade war and its implications for global economic growth. This turmoil led to a sharp sell-off not only in metals but also in global equities, oil prices, and the wider commodities market.

Market Reactions to US-China Trade Tensions

On April 5, 2025, the LME base metals complex dropped sharply, reflecting fears over a global economic slowdown. LME-traded base metals, although not directly impacted by the new tariffs, suffered as the potential growth impact on industries that rely on industrial metals became apparent. Investors flocked to safe-haven assets, particularly government bonds and gold, as fears of a global recession intensified.

China responded to the US tariffs by imposing a 34% reciprocal tariff on all US imports, effective from April 10, 2025. Additionally, China announced measures including restrictions on rare earth exports and an investigation into DuPont’s Chinese subsidiary. These retaliatory actions further fueled concerns of escalating tensions between the two largest economies.

Sharp Declines in Key Base Metals

The turmoil hit key metals hard, with copper suffering a 5.74% drop on the LME, reaching $8,900 per metric tonne, a three-month low. Similarly, Comex copper fell by 8.83% to $4.402 per pound. Nickel, aluminum, zinc, lead, and tin all saw significant losses, with the three-month LME nickel dropping 3.56%, aluminum falling 2.84%, and zinc slipping 2.84%. The declines reflected the broader uncertainty surrounding global trade and the implications for demand in sectors reliant on industrial metals.

Meanwhile, the US dollar index weakened to 102.020, reflecting broader market instability. Despite a stronger-than-expected US employment report, the US dollar remained near its six-month low, further contributing to market volatility.

Global Equities and Oil Prices Under Pressure

Global equities mirrored the downturn in metals, with the S&P 500 losing nearly 5% by midday, marking its lowest point since last May. Stock markets in Japan, South Korea, and Europe were also significantly impacted, with Japan’s Topix falling 4.5%, and the Stoxx Europe 600 index closing 5.1% lower.

Oil markets also felt the pressure, with Brent crude dropping by 6.8% to $69.86 per barrel, and WTI falling by as much as 7.9% to $61.66 per barrel. The sharp drop in oil prices further compounded concerns of an economic slowdown, which has sent shockwaves through global markets.

Trump Iran Talks Put Strait of Hormuz Oil Flows Back at the Center

Trump

Trump’s latest remarks pushed Strait of Hormuz oil flows back into the global energy debate. He said Iranian counterparts sent a valuable signal tied to oil and gas. He linked that signal to the waterway, where ship traffic remains sharply constrained. As a result, markets again focused on supply security rather than diplomacy alone.

Strait of Hormuz Oil Flows Remain the Core Market Risk

The strait remains the market’s most important energy chokepoint. Only a small number of vessels have moved through since the war began. Iranian missile and drone threats continue to deter normal transit. Therefore, even limited political signals can move crude prices quickly.

Iran’s public response shows that negotiation risk remains high. Iranian leaders denied any talks with Washington and questioned whether real fuel supply would follow. Meanwhile, damage to Gulf energy infrastructure still clouds the regional outlook. That gap between rhetoric and logistics keeps traders defensive.

Oil Prices React Before Physical Supply Fully Recovers

Trump’s decision to pause a threatened strike immediately affected price expectations. His remarks suggested a possible diplomatic off-ramp and briefly pressured oil lower. However, the wider war still pushed energy costs higher in the United States and abroad. That reaction shows how headlines now move prices before barrels move.

The price data already reflects that tension. US gasoline reached $3.96 per gallon in the week ending 23 March. At the same time, Nymex WTI for May delivery rose 4 percent to $91.74 per barrel. Consequently, refiners, transport operators, and industrial buyers now face renewed cost pressure.

For metals and industrial supply chains, the message is direct. Higher oil prices raise freight, power, and feedstock costs across manufacturing networks. Middle East disruption also increases insurance and shipping risk for global cargo. Therefore, procurement teams should prepare for volatility even if Trump Iran talks continue.

The Metalnomist Commentary

Energy markets are now trading political signals because physical confidence has weakened. If Strait of Hormuz oil flows remain restricted, cost inflation will spread across heavy industry. The next real test is not rhetoric, but whether vessel traffic and infrastructure stability improve.

Israel-Iran Escalation Raises Fears for Oil Supply Disruption

Israel-Iran War

Missile Strikes Spark Fears of Regional Energy Crisis

Israel has launched multiple strikes on Iran's nuclear sites, prompting immediate retaliation from Tehran. Iran responded with missile barrages targeting Tel Aviv, marking the most severe escalation in the region in years. While oil infrastructure remains untouched for now, market analysts are alarmed by the potential spread of conflict across oil-producing territories.

Meanwhile, Israel has suspended production at two major natural gas fields and halted pipeline exports to Egypt. Oil traders reacted swiftly to the escalation, pushing Nymex WTI crude prices up 8% to $73/bl. Market participants fear that further Israeli action may extend beyond nuclear sites and into Iran's oil fields, significantly destabilizing the global oil market.

Iran’s Islamic Revolutionary Guards Corps vowed a "crushing response" after Israel's attacks decimated sections of Iran's air defenses and military command. Reports indicate damage to facilities near Isfahan. The use of ballistic missiles by Iran, which are harder to intercept than drones, has heightened global military and energy market concerns.

U.S. and Allies Brace for Broader Conflict Spillover

The U.S. National Security Council, led by President Donald Trump, convened to discuss possible measures in response to the oil price surge. U.S. forces in the Middle East are now on high alert. Former officials worry that a lack of diplomatic infrastructure could limit Washington’s ability to contain the crisis.

According to former U.S. assistant secretary of state Barbara Leaf, the conflict could spread to Iraq, the Gulf, and Egypt. She also expressed concern that Israel might pursue regime change in Iran, a move that could further destabilize the region.

The immediate leadership losses in Iran, including top military commanders, suggest the Israeli strikes were highly strategic. However, the long-term implications remain uncertain. As tensions intensify, energy markets will likely remain volatile, with risk premiums baked into every barrel traded.

The Metalnomist Commentary

The strikes between Israel and Iran mark a turning point in geopolitical risk for energy markets. The fact that oil infrastructure has been spared — for now — is cold comfort to traders and governments bracing for wider escalation. A prolonged conflict could drastically alter global oil flows, supply chains, and defense-related industrial materials.

US-EU Energy Deal Sets Unrealistic $250bn Purchase Target

US-EU

The US-EU energy deal commits Europe to $250bn a year in US energy. The US-EU energy deal far exceeds current export capacity. As a result, the US-EU energy deal risks colliding with market realities and logistics.

Why the $250bn target strains capacity

EU officials hint that LNG will anchor purchases. However, 2024 US energy exports to the EU totaled only $74.3bn. Meeting $250bn would require volumes far above today’s flows. At current WTI prices, crude to Europe would need to exceed 10mn b/d. That equals roughly 75% of total US output. LNG sales were $12.2bn last year, or 1.7 Tcf equivalent. Raising both oil and LNG to the target looks operationally daunting.

Parallels to the 2020 China pact

The deal echoes the 2020 US-China “Phase 1” energy targets. Those goals proved unenforceable as prices and demand shifted. Meanwhile, EU trade commissioner Maros Sefcovic still called the $250bn “achievable.” The White House framed the pact as boosting US “energy dominance.” Yet enforcement will face the same price and volume volatility risks. China never met its 2020 energy targets, despite headline commitments.

European purchases would also aim to displace Russian gas and crude. However, infrastructure, contracts, and regas capacity limit rapid substitution. Price declines raise the volume hurdle even higher. Political timelines rarely align with pipelines, tankers, and terminals. Therefore, execution risk remains high despite policy intent.

The Metalnomist Commentary

Policy ambition does not negate physics, terminals, or price cycles. Unless prices soar or new capacity arrives fast, the headline figure will underdeliver. Watch for softer “best-efforts” language or phased metrics replacing hard targets.

Iran Port Blockade Sends Crude Futures Above $100

US, Iran war

Iran port blockade fears pushed crude sharply higher after the US announced a blockade of Iranian ports. Brent rose above $102/bl, while WTI climbed near $105/bl. The market reacted immediately because Iran port blockade risk threatens regional energy flows and raises the chance of wider oil supply disruption.

The policy shift matters because it follows failed weekend talks between Washington and Tehran. The US said the blockade will apply to vessels entering or leaving Iranian ports on the Gulf and Gulf of Oman. However, US forces said they will not block navigation to non-Iranian ports through Hormuz. Even so, Iran port blockade headlines were enough to trigger a strong risk premium across crude markets.

This move also deepens uncertainty around the Strait of Hormuz. The waterway remains the world’s most sensitive oil chokepoint. Any action that changes shipping behavior in the Gulf quickly affects futures, freight, and refinery sentiment. As a result, crude futures jump not only on lost barrels, but also on fear of disrupted logistics.

Strait of Hormuz Risk Is Back at the Center of Global Energy Trade

Strait of Hormuz risk is again dominating oil pricing. The US blockade does not formally close the strait, but it changes the commercial and military environment around it. Shipping companies, traders, and insurers will all need to reassess exposure. Therefore, even limited enforcement can have an outsized market effect.

The language from Washington adds to that pressure. President Donald Trump had already warned that ships paying Iranian tolls would not have safe passage. That message signals a tougher US posture toward any shipping arrangement influenced by Tehran. Consequently, market participants now have to price political enforcement risk alongside normal supply-demand fundamentals.

The immediate winner is volatility. Traders now face a market shaped by military policy, failed diplomacy, and uncertain shipping behavior. Meanwhile, refiners and industrial buyers may need to prepare for higher feedstock costs if tensions persist.

Oil Supply Disruption Could Spill Into Metals and Industrial Costs

Oil supply disruption does not stay inside the energy market. Higher crude prices can quickly raise freight, power, petrochemical, and smelting costs across global industry. That matters for metals, fertilizers, and manufacturing supply chains that already face fragile logistics. As a result, crude futures jump can become an industrial inflation signal as much as an energy story.

The bigger issue is duration. A short-lived blockade shock can create a temporary price spike. A prolonged confrontation can reshape regional trade routes and keep risk premiums elevated for longer. Therefore, markets will now watch enforcement, tanker behavior, and any new diplomatic channel very closely.

The Metalnomist Commentary

This is not just another geopolitical headline. It is a reminder that oil markets still respond fastest to chokepoint risk and military signaling. If the Iran port blockade lasts or escalates, the effect will spread beyond crude into broader industrial supply chains very quickly.