Oil Prices Surge Following Trump's Implementation of Tariffs on Canada, Mexico, and China

In Singapore on February 3rd, oil prices surged when President Donald Trump imposed tariffs on Canada, Mexico, and China, sparking concerns about a potential trade war and supply disruptions from key U.S. oil suppliers.

At the market opening, U.S. West Texas Intermediate crude reached $74.27 per barrel, rising by $1.74 or 2.4% at 2319 GMT and peaking at $75.18 per barrel earlier in the session. Meanwhile, Brent crude futures climbed by 73 cents, or 1%, to $76.40 per barrel.

Trump's tariffs on goods from Mexico, Canada, and China have initiated trade tensions that may impact global growth and fuel inflation. These tariffs vary, with Canada facing a 10% duty on energy products and Mexico subjected to the full 25%, according to White House officials.

Industry sources warn that the tariffs on the top U.S. crude suppliers could elevate costs for the heavy crude varieties crucial for U.S. refinery operations, potentially reducing profitability and prompting production cuts. This situation could offer a competitive edge to European and Asian refineries over their U.S. counterparts, according to analysts and market participants.