Oil prices declined as President Donald Trump announced tariffs of up to 25% on Canadian and Mexican crude imports starting next month and signed executive orders to boost U.S. energy production.
Brent crude fell 0.9% to $79.45 per barrel, while West Texas Intermediate reached $76.10 (-1.7%).
The market initially reacted with relief as China-specific tariffs were not prioritized, but concerns grew over potential trade conflicts with North American neighbors.
Oil started the year strong due to high heating demand and sanctions on Russian oil, which disrupted global flows. Additional sanctions on Iran and Venezuela may follow, compounding uncertainties.
The U.S. imports 4 million barrels of Canadian crude daily, and experts warn tariffs could drive up energy costs for U.S. consumers. Trump also announced plans to refill the Strategic Petroleum Reserve and withdrew from the Paris Climate Agreement. Other orders included ending offshore drilling bans, scrapping electric vehicle mandates, and urging the EU to buy more U.S. energy to avoid tariffs.
Meanwhile, Yemen’s Houthis announced they would cease attacks on U.S. and UK ships following an Israel-Hamas ceasefire, easing some global trade disruptions.