Trump Tariffs and Persistence in Crude Oil Prices:A Long-Memory Approach

Abstract

This paper examines the impact on crude oil prices of the trade tariffs announced by the Trump administration on 2 April 2025 (“Liberation Day”). More specifically, it uses fractional integration methods to analyse daily data on WTI, Brent and Murban oil prices spanning the period from 3 June 2024 to 14 January 2026 for the former two and from 8 October 2024 to 15 January 2026 for the latter. The inclusion of WTI, Brent, and Murban provides a comparative perspective across major regional crude oil benchmarks, making it possible to assess whether the observed persistence is global or benchmark-specific. Their long-memory and persistence properties are investigated initially over the full sample, and then the effects of the Trump tariff announcement are assessed by means of subsample analysis for the pre- and postannouncement period as well as recursive estimation of the fractional differencing parameter d measuring persistence. The results indicate that the unit root null cannot be rejected in any case, whether one considers the full sample or the subsamples, which implies that shocks have permanent effects. Further, the recursive estimation shows a transient loss of precision or instability around the announcement, with no detectable change in persistence as implied by the wide confidence bands.