U.S. oil market reacts to Trump's tariff on Canada, Mexico
Oil prices in the U.S. rose after tariffs were imposed on imports from Canada and Mexico, already affecting the American fuel market. Brokers report that gasoline contracts are gaining significantly.
The Trump administration has introduced new tariffs in the United States on goods from Canada and Mexico, including crude oil imports. This decision has immediately raised fuel market prices. The tariffs are set at 25%, but a lower rate of 10% has been applied to petroleum products.
Oil prices rise after Trump's radical decision
After Trump announced regulations on goods from Mexico, Canada, and China, including tariffs on oil imports, West Texas Intermediate crude oil prices in New York rose to $73.92 (an increase of 1.92%). Meanwhile, Brent oil on the ICE exchange reached $76.46 (an increase of 1.04%). However, this is still far from the highest level this year, which occurred on January 15th ($82.45).
The increase in the cost of importing oil from Canada and Mexico will likely also affect fuel prices for U.S. consumers. The segregation of commodities from these countries forms a large part of the country's oil supply. About 635 million liters of oil arrive daily in the U.S. from Canada and approximately 79 million liters from Mexico.
Warren Patterson, head of commodity strategy at ING Groep NV, highlighted that tariffs on Canada, the primary oil supplier to the U.S., are already significantly increasing oil prices, especially for refined products. Gasoline futures on the New York fuel exchange have already climbed by more than 6%.
The Trump administration's decision has been met with promises of retaliation from trading partners and potential talks with Canada and Mexico before the tariffs come into effect. This will impact negotiations and increase the risk of escalating trade conflicts, which could harm global economic growth.
