Photo caption: Oil
Oil prices were steady on Friday but on course for a weekly decline as markets wait to see if U.S. President Donald Trump follows through on his threat to impose tariffs on Mexico and Canada this weekend.
Brent crude futures for March, which expires on Friday, gained 8 cents to $76.95 a barrel by 0900 GMT. U.S. West Texas Intermediate crude (WTI) was up 21 cents at $72.94.
For the week, the Brent and WTI benchmarks are set for declines of 2% and 2.3% respectively.
“Crude oil prices declined this week due to increasing fears surrounding Trump’s tariffs, which are expected to hinder global economic growth,” said Priyanka Sachdeva, senior market analyst at Phillip Nova.
Investors are contemplating the likelihood of U.S. tariffs alongside a flurry of executive orders and policy announcements, ANZ Bank analyst Daniel Hynes said.
Trump has threatened to impose a 25% tariff as early as Saturday on Canadian and Mexican exports to the United States if those two countries do not end shipments of fentanyl across U.S. borders.
Canada and Mexico are the two largest crude oil exporters to the United States, but it is unclear if crude oil would be included among the tariffs. Trump said on Thursday that he would soon decide whether to exclude Canadian and Mexican oil imports from the tariffs.
In 2023, the last full year of data, Canada exported 3.9 million barrels per day (bpd) of crude to the U.S., out of 6.5 million bpd of total imports, while Mexico exported 733,000 bpd, according to the U.S. Energy Information Administration.
The increased risk of supply disruptions from Trump’s foreign policies has kept prices elevated, Hynes said.
“Sanctions on Russia, stopping purchases of Venezuelan oil and maximum pressure on Iran will increase the geopolitical risk premium on oil,” said Hynes.
“This could be compounded by the refilling of the strategic petroleum reserve, adding to oil demand.”
The market is also awaiting the OPEC+ meeting scheduled for Feb. 3. Recent U.S. sanctions on Russian oil have removed more than a million barrels from global supplies, possibly prompting the producer group to reconsider its output plans, Phillip Nova’s Sachdeva said.
Kazakhstan’s energy minister said on Wednesday that the group is set to discuss Trump’s plans to raise U.S. oil production and take a joint stance on the matter at next week’s OPEC+ meeting.
