At 11:48 GMT, Light Crude Oil Futures are trading $72.45, down $0.28 or -0.38%.
Tariff Uncertainty Sparks Market Caution
Canada and Mexico are the top two crude suppliers to the U.S., with Canada exporting 3.9 million barrels per day (bpd) and Mexico 733,000 bpd in 2023, according to the U.S. Energy Information Administration (EIA). A tariff on crude could disrupt flows, push up U.S. oil prices, and tighten supply.
Trump hinted that his decision would depend on market conditions and trade relations, stating, “We may or may not [include oil].” Analysts suggest that excluding crude could limit price volatility, while an all-encompassing tariff would create bullish pressure on U.S. crude by raising costs on key imports.
OPEC+ Meeting Adds Another Market Risk
Beyond the tariff drama, traders are also awaiting the February 3 OPEC+ meeting, where members will discuss production policy. Kazakhstan’s energy minister confirmed that OPEC+ will review Trump’s push for higher U.S. output and may consider adjusting voluntary production cuts.
Analysts believe OPEC+ could boost supply to ease price concerns, but any action will be measured. A misstep could lead to increased market volatility, especially if the U.S. enforces tariffs on oil imports from its key suppliers.
Market Outlook: Short-Term Weakness, Tariff-Driven Upside Risk
Oil prices are under pressure from a strong U.S. dollar and economic concerns, keeping the short-term outlook bearish. However, if Trump imposes tariffs on Canadian and Mexican crude, the market could shift bullish, with tighter supply supporting prices.