West Texas Intermediate (WTI) Oil price ended a three-day losing streak, holding steady near $76.20 during European trading hours on Tuesday. CrudeOil markets experienced significant volatility as traders assessed a series of executive orders issued by US President Donald Trump shortly after his inauguration.
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One of the key measures included a plan to impose 25% tariffs on imports from Canada and Mexico starting February 1, disappointing investors who had hoped for a delay in implementation. Crude Oil prices gained momentum as the proposed duties on Canadian crude imports were seen as a potential driver for higher market prices.
Canada’s Oil exports
Canada exports nearly all of its crude Oil to the United States (US), often at a discount to WTI. “US sanctions therefore raise the risk of higher costs for most of Canada’s Oil exports,” Commonwealth Bank analyst Vivek Dhar noted in a report.
China with tariffs
Former President Donald Trump refrained from announcing specific tariffs on China, the world’s largest Oil importer, leaving markets uncertain. Traders are keeping a close eye on developments in tariff policies, as Trump previously threatened China with tariffs of up to 60% in December.
At the same time, concerns about a potential surge in US oil production loomed large, fueled by Trump’s “drill, baby, drill” agenda. On Monday, Trump unveiled an ambitious plan to expedite the permitting process for Oil, gas, and power projects, aiming to boost already record-high US energy production.
One of Trump’s executive orders on his first day in office repealed actions taken by former President Joe Biden to restrict Oil drilling. Trump reversed Biden’s ban on Oil drilling in the Arctic and along extensive areas of the US coastline.
According to the White House, Trump also nullified a 2023 memo that had prohibited Oil drilling across 16 million acres (6.5 million hectares) in the Arctic. These moves signaled a sharp policy shift and highlighted the administration’s commitment to maximizing domestic energy output.
