US-Iran negotiations begin, crude oil market affected by tariffs and negotiations

      Recently, the international economic and political situation has been turbulent. The United States has made major adjustments to its tariff policy, and key dialogues have also been launched between the United States and Iran. The crude oil market has fluctuated violently due to multiple factors.
      On the evening of April 11, the U.S. Customs and Border Protection announced that the federal government would exempt electronic products such as smartphones, computers, and chips from the so-called "reciprocal tariffs." According to the documents it released, the exemption applies to such products entering the United States after April 5, and those who have paid the relevant tariffs before can apply for a refund. This move was regarded by financial analyst Hussein Kubeisi as a "180-degree turn" in the U.S. tariff policy. Bloomberg pointed out that the measure will help ease the price pressure faced by American consumers, and electronic giants such as Apple and Samsung will also benefit from it. Previously, the United States' extensive and changeable tariff policy has caused turmoil in the financial market and attracted criticism from Republican leaders including former Vice President Pence.
      In the field of international politics, U.S.-Iran relations have made important progress. On the afternoon of April 12, local time, the first round of indirect negotiations between Iran and the United States on the lifting of sanctions and nuclear issues ended in Oman. The Iranian Foreign Ministry said that the talks were held in an atmosphere of mutual respect and constructiveness, and the two sides conveyed the government's position on lifting illegal sanctions on Iran and Iran's peaceful nuclear program through the Omani Foreign Minister. The two sides agreed to continue the talks next week, and after the indirect negotiations, the heads of the two delegations had a brief face-to-face exchange under the witness of the Omani Foreign Minister.
      Although the US-Iran negotiations started with a "constructive" start, the future prospects are still full of thorns. Recent military actions around Iran have exacerbated Iran's security concerns and caused Iran to lose trust in the United States, which undoubtedly adds obstacles to the negotiations. In addition, regional forces such as Israel may also interfere in the negotiations. Israel has long regarded Iran as the main threat, and its position may affect US decision-making, making the negotiation situation more complicated. If the United States and Iran cannot compromise with each other on key issues, the risk of a breakdown in the negotiations will increase significantly, and the situation in the Middle East may become further tense.

                                                                     

      At the same time, the crude oil market is affected by a variety of factors. From the supply side, if the two sides reach an agreement and the United States lifts sanctions on Iran, Iran's crude oil exports are expected to increase. The International Energy Agency (IEA) predicts that if a comprehensive agreement is reached, Iran may increase its daily production from 2.5 million barrels to 3.8 million barrels within 6 months. This will bring a large amount of new supply to the global crude oil market, further exacerbating the current market oversupply pressure and exerting downward pressure on oil prices. Bank of America also pointed out that if an agreement is reached with Iran, crude oil prices may fall to $70 per barrel. However, if the negotiations fail, the United States may increase sanctions on Iran, and Iran may take retaliatory measures, such as blocking key oil transportation channels such as the Strait of Hormuz, which will seriously threaten the security of global crude oil supply, trigger market concerns about supply shortages, and push oil prices up sharply.
      Therefore, the price trend of the crude oil market has attracted much attention. This week, Trump announced comprehensive tariff measures, expectations of a global economic recession increased significantly, and expectations of crude oil consumption suffered a heavy blow. WTI crude oil fell to as low as $55.12 per barrel, a new low in 4 years. Chen Dong, senior researcher of Baocheng Futures, analyzed that the US "reciprocal tariffs" suppressed global economic growth expectations, and the OPEC+ production increase exceeded expectations, causing a cliff-like drop in domestic and foreign crude oil futures prices. Eight OPEC+ oil-producing countries decided to increase production by 411,000 barrels per day from May, which was far beyond market expectations. OPEC+ is facing the dilemma of whether to maintain market share or price, and the increase in non-OPEC+ supply, led by the United States, is constantly eroding its market share.