Oil prices experienced volatile trading on Monday, initially rising over $1 per barrel before closing at a one-month low as markets reacted to U.S. President Donald Trump’s planned tariffs on Canada, Mexico, and China. The April Brent crude contract settled at $75.96 per barrel, up $0.29 (0.4%), while U.S. West Texas Intermediate (WTI) crude rose $0.63 (0.9%) to close at $73.16 per barrel. The Brent contract’s decline was influenced by the expiration of the higher-priced March contract on Friday.
Trump’s sweeping tariff plans, including a 25% levy on most Mexican and Canadian goods and a 10% tariff on energy imports from Canada and China, had raised concerns of a trade war that could slow global growth and reignite inflation. However, Trump delayed tariffs on Mexico for one month after the country agreed to reinforce its northern border to curb illegal drug trafficking, particularly fentanyl. Barclays analyst Amarpreet Singh noted that tariffs on Canadian energy imports could disrupt U.S. energy markets and potentially contradict Trump’s objective of lowering energy costs. Canada and Mexico together supply about 25% of the crude oil refined in the U.S., making them critical to the country’s fuel production.
Higher tariffs could increase the cost of heavier crude grades that U.S. refiners rely on, raising gasoline prices and refining costs. Analysts at Rystad Energy warned that these disruptions could lead to higher fuel costs for American consumers, despite Trump acknowledging the potential for “short-term” economic pain.
Meanwhile, OPEC+ confirmed plans to gradually increase oil output starting in April. The group also announced it would no longer rely on U.S. Energy Information Administration data to monitor production and compliance with supply agreements. Russia’s Deputy Prime Minister Alexander Novak revealed that the OPEC+ Joint Ministerial Monitoring Committee (JMMC) discussed Trump’s call to boost production, but no immediate actions were announced. Looking ahead, global oil demand is expected to remain steady through 2040, according to a long-term demand outlook from energy trader Vitol. While demand is projected to rise through the late 2020s, a decline is anticipated in the following decade.