West Texas Intermediate traded below $76 a barrel following a run of declines since Thursday, while Brent closed near $79. Trump said he was considering a 10% tariff on China in retaliation for the flow of fentanyl from the country. Prior to the threat, the Asian nation said it will expand US imports.
Trump’s first day in office began with sweeping executive orders, including an overhaul of US energy policy and the threat of tariffs on Canada and Mexico of as much as 25%. Both countries are major exporters of goods to the US, including crude which is processed in American refineries.
That’s prompted a flood of Canadian crude heading to the US to beat threatened tariffs, which Trump said could start from February 1. Levies would result in higher gasoline and energy costs for American consumers, Goldman Sachs Group Inc. and Canada’s oil industry warned last year.
The threat of tariffs has driven the dollar higher, making commodities such as oil priced in the currency more expensive for most buyers.
Crude still remains higher so far this year, helped by broad US sanctions on Russia which have upended physical oil and tanker markets. Trump said he’s likely to impose more sanctions on Moscow if President Vladimir Putin doesn’t come to the table to negotiate on Ukraine.
- WTI for March delivery was little changed at $75.78 a barrel at 8:09 AM in Singapore.
- Brent for March settlement closed 1.1% lower at $79.29 a barrel on Tuesday.