Oil prices fluctuated on Monday as investors reacted to President Donald Trump’s new executive orders and threats of tariffs on Canadian and Mexican crude imports. After enduring a three-day slump, Brent crude rose above $80 a barrel, while West Texas Intermediate hovered near $77.
Trump’s remarks included a warning that tariffs of up to 25% could be implemented on crude oil from Canada and Mexico as early as February 1. Alongside the tariff threat, he signed an executive order declaring a national energy emergency, a move intended to ramp up domestic energy production.
Despite the tariff talk, Trump refrained from imposing direct measures against China on his first day in office, instead directing his administration to investigate unfair trade practices on a global scale.
The oil market has had a strong start to the year, bolstered by cold temperatures in the Northern Hemisphere, which increased heating demand, and the implementation of broad U.S. sanctions on Russia’s oil sector, disrupting global supply chains. Trump’s Treasury secretary nominee also indicated support for tightening sanctions on Russia, further heightening concerns of supply disruptions. In addition, there are looming sanctions on Iran and Venezuela.
Trump also expressed his intention to replenish the U.S. strategic oil reserve, which has been at its lowest level since the 1980s, vowing to fill it “right to the top.” He signed an order pulling the U.S. out of the Paris Climate Agreement and lifted bans on offshore oil and gas drilling, which had previously restricted exploration in much of the nation’s coastal waters.
Meanwhile, in the Red Sea, the Houthi movement, based in Yemen, announced it would cease attacks on U.S. and U.K. ships. The decision follows a ceasefire agreement between Israel and Hamas and marks the end of over a year of disrupting global maritime trade in the region.
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