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It is likely that oil prices fall in the longest race after the following initial jump Implementation of President Donald Trump of strong tariffs In Canada, Mexico and China, they said observers of the industry.
During the weekend, Trump followed his rates of 25% in threat in imports of Canada and Mexico, as well as a 10% tax on China’s assets. Canada’s energy resources will be subject to a lower 10%rate.
USA. Texas western intermediate It rose 1.75% to $ 73.8 per barrel, while US gasoline futures also rose. Rbob Gasoline futures were lasted 2.81% At $ 2.11 per gallon. Brent International Brent It rose 0.71% to $ 76.21 per barrel.
According to him Latest data on the United States Energy Information AdministrationThe imports of Canadian crude oil from the United States reached a record of 4.3 million barrels per day in July 2024, after the expansion of the Trans Mountain pipe in Canada. Canada represented about 62% of all imports of crude oil from the United States In the first 10 months of last year, while Mexico represented around 7% in the same period.
While raw markets will see higher prices and consumers will make more for the costs of gasoline and diesel in the short term, the peak is only temporary, they told CNBC.
“While the initial movement of crude oil is up, a cycle of tariffs and retaliation actions of Canada, Mexico, China and perhaps others in the future could lead to a world recession, which makes oil prices collapsed “, Andy Lipow, president of Lipow Oil Associates told CNBC.
Tariffs have not resulted in oil supplies to withdraw from the market, and will result in a redistribution of supplies as Mexico and Canada seek to divert their volumes to Europe and Asia, Lipow added. Meanwhile, US refiners will seek to process more domestic crude oil while looking for media east alternatives.
Canada to support the worst part
Both Canada and Mexico have a limited refining capacity or alternative export routes, and tariffs will probably push oil producers to both countries to pronounced price discounts, said Saul Kavonic, head of energy research at MST Marquee.
Canadian oil producers will eventually support the worst part of the tariff load with a discount of $ 3 to $ 4 per barrel in the Canadian crude given the limited alternative export markets, Goldman Sachs wrote in a note dated Sunday.
In the medium term, Goldman analysts also expect broad tariffs to affect global GDP, as well as oil demand, which weigh oil prices.
In addition, global oil prices could fall more after the next quarter as tariffs worsen the image of demand and OPEC+ faces a growing pressure of Trump to reverse production cuts, Kavonic said. Trump recently declared that he is urging Saudi Arabia and OPEC to lower oil prices.
The oil sign, which is scheduled to meet on Monday, has not yet responded to Trump’s application. OPEC+ has been retaining 2.2 million barrels per day from the global market to the prices of Stem fall. In December, the group decided to extend its production cuts at least in March 2025 before gradually eliminating them over the course of a year.
