AMERICAS OIL: Trump Tariffs Could Cut Canadian Crude Output by 1.5m b/d: Kpler
If Trump follows through on his threat and imposes 25% tariffs on Canadian crude from Feb. 1, it will lead to a significant reduction in Canada’s crude output, Kpler said.
- If demand for WCS crude from PADD 2 declines, Canada could be forced to seek alternative buyers overseas, necessitating exports via USGC (PADD 3) ports.
- However, the feasibility of accommodating these additional volumes at Corpus Christi and Houston remains uncertain.
- In 2024, a total of 3.5m b/d was exported from the USGC, primarily WTI Midland.
- With upcoming refinery shutdowns, exports could rise to 4m b/d, with max export capacity around 6m b/d.
- If US demand for up to 3.5m b/d of Canadian crude drops, capacity is insufficient to export these volumes via USGC ports, Kpler said.
- At least 1.5m b/d of Canadian crude would lack an export route, forcing Canada to cut output by at least 1.5m b/d.
- The US would face higher costs for crude oil imports, and US consumers would experience elevated fuel prices, suggesting that full implementation of tariffs on Canadian oil is unlikely.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
OPTIONS: Expiries for Dec31 NY cut 1000ET (Source DTCC)
EUR/USD: $1.0525(E525mln)
--------------------------------
Larger FX Option Pipeline
EUR/USD: Jan02 $1.0400(E1.5bln), $1.0500(E1.2bln)
USD/JPY: Jan02 Y154.30($2.1bln)
AUD/USD: Jan02 $0.6400-20(A$1.1bln)
USD/CAD: Jan02 C$1.3905($1.2bln); Jan03 C$1.4220($1.5bln)
USD/CNY: Jan02 Cny7.0800($1.7bln)
GILT AUCTION PREVIEW: On offer next week
The DMO has additionally announced it will be looking to sell GBP2.25bln of the 4.375% Jul-54 Gilt (ISIN: GB00BPSNBB36) at its auction next Tuesday, January 7.
US: Trump Says Speaker Johnson Has His 'Total Endorsement'
US President-elect Donald Trump has issued a lengthy statement on his Truth Social site endorsing House Speaker Mike Johnson (R-LA) ahead of the January 3 speaker vote on the floor of the House of Representatives.
- Trump: "Speaker Mike Johnson is a good, hard working, religious man. He will do the right thing, and we will continue to WIN. Mike has my Complete & Total Endorsement. MAGA!!!"
- The statement comes after a damaging two-week period - starting in late December - when Trump and advisor Elon Musk torpedoed a Johnson-backed plan to fund the federal government. This week, a public spat over H-1B work visas has deepened fissures between the 'Silicon Valley' faction of the GOP, led by Musk, and the conservative 'America First' bloc of Trump's MAGA movement, raising concerns that a collapse of the GOP coalition could derail Trump's agenda.
- Trump's statement appears designed to patch up the rift ahead of the speaker vote, which will kickstart a challenging 100-day period when Trump needs near-unanimous support from House Republicans to pass a reconciliation package that will include immigration and energy legislation and likely a measure to suspend the federal debt ceiling.
- Rep Thomas Massie (R-KY) has stated he will vote 'no' on Johnson with Rep Victoria Spartz (R-IN) leaning towards 'no'. Assuming all Democrats are present and vote 'no', four dissenting Republican votes will sink Johnson's bid and force another speaker ballot.
- Chad Pergram at Fox News has a useful explainer on the implications of the speaker vote here.
