China tariffs shake oil markets as West Texas crude dips
Brokers report that oil prices on the New York fuel exchange are falling sharply after China imposed tariffs on American goods, including oil and liquefied natural gas.
A barrel of West Texas Intermediate oil for March delivery is priced at £55 in New York, down by 1.54%. Brent on ICE for April is quoted at £57 per barrel, a drop of 0.90%.
Oil prices are falling sharply
Over the weekend, US President Donald Trump signed an order imposing tariffs on goods from Canada, Mexico, and China.
The order includes imposing 25% tariffs on goods from Canada and Mexico, except for oil products, which are taxed at a lower rate of 10%, and an additional 10% on Chinese goods.
However, on Monday, Mexican President Claudia Sheinbaum announced, after speaking with the US president, that the implementation of US tariffs against Mexico would be postponed by one month.
Additionally, Donald Trump and Canadian Prime Minister Justin Trudeau announced Monday that 25% tariffs on Canadian goods would be suspended for 30 days.
Trudeau pledged to enhance border protection and cooperate with the US against fentanyl smuggling, reiterating promises made in December 2024.
Meanwhile, China imposed tariffs on a range of US products and announced an investigation into Google shortly after Donald Trump declared the imposition of 10% tariffs on Chinese goods.
China announced retaliatory tariffs
According to a statement from the Chinese State Administration for Market Regulation on Tuesday, China is investigating Google, the American technology giant, for alleged violations of antitrust regulations.
The authorities in Beijing imposed 15% tariffs on US oil and liquefied natural gas exports and a 10% charge on American oil and agricultural equipment.
According to China's Ministry of Finance, this is Beijing's response to "the unilateral imposition of tariffs by the United States."
- The volatility in the oil market is a reflection of the policy uncertainty that the new Trump administration brings - says Charu Chanana, chief investment strategist at Saxo Markets Pte.
- Oil’s fundamentals are being overshadowed as the market is largely sentiment-driven, with tariffs playing a significant role in shaping price direction - she adds.
OPEC is not reacting for now
Meanwhile, during their Monday meeting, did not change countries made no changeforto their oil supply policy to global markets.
Analysts point out that there is currently no response from OPEC+ to recent appeals by Donald Trump to lower oil prices by increasing production from cartel countries and their allies.
OPEC+ intends to maintain production cuts this quarter and gradually increase crude production in monthly increments starting in April.
