Trump's tariffs spark sharp rise in US oil prices
US oil prices have risen since tariffs were imposed on imports from Canada and Mexico, which have already affected the American fuel market. Brokers report that gasoline contracts are gaining strongly.
The Trump administration has introduced new tariffs in the United States on goods from Canada and Mexico, including crude oil import. This decision has immediately spiked prices in fuel markets. The tariffs are set at 25 percent, but a lower rate of 10 percent was applied for 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, the price of a barrel of West Texas Intermediate oil in New York rose to $73.92 (an increase of 1.92 percent). Meanwhile, Brent crude on the ICE exchange reached $76.46 (an increase of 1.04 percent). However, this is still far from this year's highest level, which was on January 15 ($82.45).
The increase in the import costs of oil from Canada and Mexico is likely to impact fuel prices for consumers in the US. The oil resources from these countries constitute a large part of the supply in the US. Canada delivers 4 million barrels of oil to the US daily, and Mexico about 500,000 barrels.
Warren Patterson, head of commodity strategy at ING Groep NV, stated that tariffs imposed on Canada, the largest supplier of crude oil to the U.S., are already driving a notable increase in oil prices, particularly for refined products. Gasoline futures on the New York fuel exchange have already surged by more than 6 percent.
The Trump administration's decision has been met with promises of retaliation from trade partners and potential talks with Canada and Mexico before the tariffs go into effect. This will affect negotiations and increase the risk of escalating trade conflicts, which could harm global economic growth.
