Oil field, Alberta, Canada
Norm Betts | Bloomberg | Getty Images
Oil prices are likely to fall on the long run after the initial jump after Implementation of the strong tariff of President Donald Trump In Canada, Mexico and China, the industry observers said.
Over the weekend, Trump followed its long threatening 25% of imports from imports from Canada and Mexico, as well as 10% duties on goods from China. Energy resources from Canada are subject to a lower tariff of 10%.
USA Middle Western Texas It increased 1.75% to $ 73.8 per barrel, while US gasoline futures also climbed. Tinsel Futures gasoline is the last 2.81% 2,11 USD by Galon. International Brent Raw Material It climbed to 0.71% at $ 76.21 per barrel.
According to The latest data from the US Energy Information AdministrationThe American import of Canadian raw oil oil reached a record 4.3 million barrels a day in July 2024, after spreading the Trans Mountain Canadian pipeline. Canada made up about 62% of all the imports of raw oil in the US In the first 10 months of last year, while Mexico consisted of about 7%in the same period.
Although raw oil markets will see higher prices, and consumers will throw out more gas and diesel costs in the short term, the spike is only temporary, the Oil observers told CNBC.
“While the initial move is raw oil upwards, the tariff cycle and retaliation by Canada, Mexico, China and perhaps others could lead to world recession, which is why oil prices have fallen,” Andy Lipow, president are for CNBC.
The tariffs did not result in the removal of any oil supplies from the market, and will result in a redistribution of stock while Mexico and Canada want to divert their volumes to Europe and Asia, Lipow added. In the meantime, US rafiners will seek to process more domestic raw oil while seeking alternatives in the Middle East.
Canada handle your head
Both Canada and Mexico have a limited spare capacity for refining or alternative export routes, and tariffs are likely to push oil producers in both countries to steep prices, Saul Kavonic, head of energy research on MST Marquee.
Canadian oil manufacturers will eventually bear the burden of tariff cargo with a discount of $ 3 to $ 4 per barrel on the Canadian oil with respect to the limited alternative export markets, Goldman Sachs wrote in a note from Sunday.
In the medium term, Goldman’s analysts also expect that wide tariffs will affect global GDP, as well as oil demand, measuring oil prices.
In addition, global oil prices could be reduced after the next quarter, as the tariffs exacerbate the demand image, and OPEC+ faces increased pressure from Trump to the reverse reduction of production, Kavonic said. Trump recently stated that he persuades Saudi Arabia and Opec to lower oil prices.
The oil cartel, which will meet on Monday, has yet to respond to Trump’s request. The OPEC+ rejected 2.2 million barrels a day from the global market to the prices that fall in prices. In December, the group decided to extend its reduction in production at least March 2025 before gradually abolished during the year.
