Monday, 03 February 2025 04:11

Oil prices jump on supply disruption fears from US tariffs

Rate this item
(0 votes)

Oil prices jumped on Monday after U.S. President Donald Trump imposed tariffs on Canada, Mexico and China, raising fears of crude supply disruption from two of the biggest suppliers to the U.S., but the prospect of lower fuel demand capped gains.

U.S. West Texas Intermediate crude futures were at $73.97 a barrel, up $1.44, or 2%, by 0042 GMT, after hitting more than a week's high at $75.18 a barrel earlier in the session.

Brent crude futures rose 62 cents, or 0.8%, to $76.29 a barrel, after touching a high of $77.34.

Trump on Saturday ordered sweeping tariffs on goods from Mexico, Canada and China, kicking off a trade war that could dent global growth and reignite inflation.

Energy products from Canada will have only a 10% duty, but Mexican energy imports will be charged the full 25%, White House officials said.

"The relatively soft stance on Canadian energy imports is likely rooted in caution," Barclays analyst Amarpreet Singh said in a note.

"Tariffs on Canadian energy imports would likely be more disruptive for domestic energy markets than those on Mexican imports and might even be counterproductive to one of the president's key objectives - lowering energy costs."

Canada and Mexico are the top sources of U.S. crude imports, together accounting for about a quarter of the oil U.S. refiners process into fuels such as gasoline and heating oil, according to the U.S. Department of Energy.

The tariffs will raise costs for the heavier crude grades U.S. refineries need for optimum production, industry sources said, cutting their profitability and potentially forcing production cuts.

U.S. gasoline futures jumped 2.6% to $2.1128 a gallon after hitting $2.162 earlier, the highest since Jan. 16.

The tariffs are bullish for near-term oil prices due to supply disruption risks, especially for heavier grades, said Saul Kavonic, an energy analyst at MST Marquee.

However, oil prices may fall beyond the next quarter as tariffs cause the demand outlook to deteriorate further and as OPEC+ has come under more pressure from Trump to unwind production cuts, he added.

The Organization of the Petroleum Exporting Countries and their allies, a group known as OPEC+, is unlikely to alter existing plans to raise output gradually when it meets on Monday, delegates from the producer group told Reuters, despite the pressure from Trump.

 

Reuters

June 24, 2025

Oil prices fall to over one-week lows as Trump announces Israel-Iran ceasefire

Oil prices tumbled on Tuesday to their lowest level in more than a week as…
June 23, 2025

Tinubu, June 12, and the battle for memory: Lamido accuses, Presidency fires back

A fierce war of words has erupted over Nigeria’s political past, as former Jigawa State…
June 23, 2025

The reason even successful people struggle to get out of bed some days

Sometimes after a long, productive day, I only have the energy to scroll on social…
June 21, 2025

Man convicted of posing as flight attendant to fly for free 120 times

A 35-year-old American man has been found guilty of impersonating a flight attendant at least…
June 24, 2025

Three family members killed, others injured in fresh Plateau attack

At least three family members were killed while two others were injured in a fresh…
June 24, 2025

Israel Vs Iran: Here’s what to know after Day 11

What we know about Iran's attack on US base in Qatar Iran has launched missiles…
June 20, 2025

Nigerian company to make HIV, malaria test kits locally

Nigerian manufacturer Codix Bio Ltd plans to make millions of HIV and Malaria test kits…
May 13, 2025

Nigeria's Flying Eagles qualify for World Cup after dramatic win over Senegal

Nigeria's U-20 national football team, the Flying Eagles, have secured their place at the 2025…

NEWSSCROLL TEAM: 'Sina Kawonise: Publisher/Editor-in-Chief; Afolabi Ajibola: IT Manager;
Contact Us: [email protected] Tel/WhatsApp: +234 811 395 4049

Copyright © 2015 - 2025 NewsScroll. All rights reserved.