Rising oil prices: US tariffs on Canada and Mexico impact fuel market
Oil prices in the USA are rising following the imposition of tariffs on imports from Canada and Mexico, which is already affecting the American fuel market. Brokers report that gasoline contracts are experiencing significant gains.
The Trump administration has introduced new tariffs in the United States on goods from Canada and Mexico, including crude oil imports. This decision has led to an immediate rise in fuel market prices. The tariffs are set at 25%, although a lower rate of 10% has been applied to petroleum products.
Oil prices rise after Trump's radical decision
After Trump announced the regulation on goods from Mexico, Canada, and China, including tariffs on oil imports, West Texas Intermediate crude oil prices in New York rose to $73.92 (an increase of 1.92%). Meanwhile, Brent oil on the ICE exchange reached $76.46 (an increase of 1.04%). However, this is still below the highest level this year, recorded on 15 January ($82.45).
The increase in the cost of importing oil from Canada and Mexico is likely to also affect fuel prices for consumers in the USA. Commodities from these countries form a substantial part of the country's oil supply. Four million barrels of oil are imported daily from Canada, and about 500,000 barrels are imported daily from Mexico.
Warren Patterson, head of commodity strategy at ING Groep NV, points out that Tariffs on Canada, the largest oil supplier to the USA, are already leading to a significant rise in oil prices, particularly refined product prices. Already, the most active gasoline contracts are surging on the New York fuel exchange by over 6%.
The Trump administration's decision has been met with promises of retaliation from trading partners and potential discussions with Canada and Mexico before the tariffs take effect. This will impact negotiations and increase the risk of escalating trade conflicts, which could hamper global economic growth.
