Oil Prices Flat at $64.80 as US-China Trade War Hits Russia, Middle East Stocks and Exports

Oil prices remained flat in early trading on April 14, as concerns over the escalating trade war between the United States and China weighed on the global economic outlook and dampened fuel demand. Brent crude futures were up $0.04, or 0.06%, at $64.80 per barrel, while US WTI futures rose $0.03, or 0.05%, to $61.53 per barrel. Brent crude has dropped to its lowest level since February 2021, nearly 30% below last year's price. The US recently increased tariffs on Chinese goods to 145%, prompting China to raise tariffs on US imports to as much as 125%. Some electronic devices were later exempted from reciprocal tariffs, but further US tariffs on semiconductors and other products are expected in the coming months. The trade dispute has put pressure on oil-exporting economies, particularly in the Middle East, where budgets are heavily dependent on oil revenues. The Dubai financial market fell 5%, Abu Dhabi securities exchange dropped 4%, and Saudi Arabia’s Tadawul stock exchange declined over 6%. Saudi Aramco reported losses of over 5%. According to Goldman Sachs, Saudi Arabia’s budget deficit could reach $67 billion this year, forcing spending cuts and borrowing. Russia's oil earnings have fallen to their lowest level since mid-2023, with exports decreasing for the third consecutive week and prices dropping. Crude flows from all Russian ports in the four weeks to April 13 fell to 3.13 million barrels a day, the lowest since February. The gross value of Russian crude shipments dropped by about $80 million, or 6%, to $1.29 billion a week. Analysts note that OPEC and OPEC+ projects have become unprofitable at current prices, while China, India, and Turkey could benefit from lower oil import bills. A prolonged US-China trade war could disrupt global supply chains, reduce foreign investment, and strain budgets in oil-dependent economies in the Middle East.