On Friday, U.S. President Donald Trump announced expectations of implementing tariffs on oil and gas around Feb. 18. These tariffs may include a reduced levy on Canadian crude. The U.S. imports around 4 million barrels of oil daily from Canada, with approx. 70% processed by Midwest refineries. Experts caution that such tariffs could hinder fuel production and increase costs for consumers.
While details on specific countries affected remain undisclosed, Trump confirmed the implementation in the Oval Office, stating, "We're going to put tariffs on oil and gas around the 18th of February." He hinted at decreasing the tariff on Canadian crude to 10% instead of the previously mentioned 25%.
U.S. oil refiners, particularly in the Midwest, rely on imported crude, notably from Mexico and Canada. They anticipate the impact of potential tariffs on Canadian and Mexican crude imports. Phillips 66 foresees production cuts in regions like the Midwest and Rocky Mountains, constrained by limited alternative crude sources.
Preparations are underway among companies heavily reliant on Canadian crude. Valero, the second-largest U.S. refiner by capacity, is planning various scenarios in response to the tariffs, as stated by COO Gary Simmons during a recent analyst call.