Trump threatens 25% tariffs amid escalating protests in Iran One week on from US action in Venezuela, attention has turned towards Iran amid growing civil unrest, with protests, initially sparked by soaring inflation, having now escalated into a broader call to end the Supreme Leader''s rule. On Monday Trump warned of US intervention if Iranian security forces opened fire on protestors, then later announced (on social media) an immediate 25% tariff for any country dealing with Iran. The initial market reaction to the tariff threat was relatively muted, reflecting uncertainty over its implementation and the possibility of a U-turn. Brent rose $65/bbl. As the largest importer of Iranian crude, China is most exposed In 2025 China imported c. 90% of Iran''s crude oil (c.1.5mb/d) with the barrels largely being used in Chinese ''teapot'' refineries. Iran already endures heavy US sanctions, and in 2025 Trump placed further sanctions on several dark fleet vessels and Shandong-based ''teapot'' refineries. Subsequently Iranian crude trades at a discount to international benchmarks. However, an additional 25% tariff threatens to make Chinese/ US exports more costly, weighing on oil demand, and for China a loss of Iranian barrels would come at the same time as its Venezuelan oil imports (~450mboed) dry up. Geopolitical risk premium holds in the short term, but signs of diplomacy are bearish oil price Short term, heightened geopolitical risk (tariffs, escalating domestic unrest, US action) will elevate oil prices. The greatest risk to price is the closure of the Strait of Hormuz . However, with the possible additional 25% tariff likely to choke trade and raise US inflation (unfavourable to Trump ahead of the mid-terms) in our view, the stickiness of the tariff must be brought into question. In the event of a de-escalation of tensions, we expect medium- and long-term oil price sentiment will become more bearish. Whilst we think a regime change would be less...