OIL: Trump Announces Measures To Boost Demand & Supply Of US Energy

Oil prices have continued to decline today after falling over 1% on Monday. Prices jumped following US President Trump’s statement that he thinks a 25% tariff on imports from Canada and Mexico will be enacted from February 1. The US receives 4mbd from Canada, so tariffs could result in higher US fuel prices. He also declared that the SPR would be refilled, the EV mandate ended and US output increased. 

• WTI is down 0.8% to $76.75/bbl. It fell to $76.09, below initial support at $76.16, before Trump’s statements and then reached $77.18. Brent is only down 0.1% to $80.10/bbl after falling to $79.64 in early trading, holding just above support, and then rising to $80.46.
• Trump declared a “national energy emergency” to be able to increase domestic oil and gas production and reverse Biden’s climate change policies, according to Bloomberg. Uncertainty remains elevated though with no details yet or if he will even be able to use it. Energy permit regulations were also eased, while he said that crude imports from Venezuela would likely be stopped.
• With Trump planning to boost energy production, he said that if the EU wants to avoid tariffs it needs to buy more US oil & gas. EU President von der Leyen has already discussed increased LNG shipments with him.
• He also overturned Biden’s ban on offshore oil & gas drilling but it will require Congressional approval and may face legal challenges.
• The US has tightened sanctions against Russia and Iran by targeting tankers and this may be intensified. Data showed China’s crude imports from Russia in 2024 rose 1% to a record and from Malaysia, which Iranian and Venezuelan crude transits through, rose 28%, while Saudi shipments fell 9%. But that may change with some Chinese ports already preventing vessels carrying Iranian crude from docking.
• Later US January Philly Fed non-manufacturing, UK labour market, euro area/German ZEW and Canada’s December CPI data are released.