US Tariffs on Canada, Mexico Oil Products Expected to Disrupt Market

Proposed U.S. tariffs of 10% on Canadian and 25% on Mexican oil products are anticipated to significantly impact North American crude flows, according to a Wood Mackenzie report. The implementation of these tariffs could shift Mexican exports away from the U.S. to Europe and Asia, potentially affecting around 600,000 barrels per day of imports, while a 10% tariff would have a lesser impact. Meanwhile, China has imposed a 10% tariff on U.S. crude oil imports in retaliation, which is expected to decrease American crude exports significantly, contributing to a decline in overall demand. A recent poll shows substantial support among Canadians for retaliatory measures such as export taxes on oil if the U.S. revives tariffs, highlighting the contentious nature of the trade relationship. The geopolitical tensions surrounding these tariffs could also push China to seek alternative oil supplies from Africa and the Middle East. As these developments unfold, the intricate dynamics of North American and global oil markets remain in flux.