West Texas Intermediate (WTI) oil prices ended a three-day losing streak, holding steady near $76.20 during European trading hours on Tuesday (1/21). The crude oil market experienced significant volatility as traders assessed a series of executive orders issued by U.S. President Donald Trump shortly after his inauguration.
One of the major moves included a plan to impose a 25% tariff on imports from Canada and Mexico starting Feb. 1, disappointing investors who had expected a delay in its implementation. Crude oil prices gained momentum as the proposed tariffs on Canadian crude imports were seen as a potential driver of higher market prices.
Canada exports nearly all of its crude oil to the United States (U.S.), often at a discount to WTI. "Therefore, U.S. sanctions increase the risk of higher costs for a significant portion of Canada's oil exports," Commonwealth Bank analyst Vivek Dhar noted in a report, according to Reuters.
Former President Donald Trump refrained from announcing specific tariffs on China, the world's largest oil importer, which made the market uncertain. Traders are keeping a close eye on developments on tariffs, as Trump previously threatened China with tariffs of up to 60% in December.
At the same time, concerns about a potential surge in U.S. oil production loom large, fueled by Trump's "drill, baby, drill" agenda. On Monday, Trump unveiled an ambitious plan to speed up the permitting process for oil, gas and power projects, aiming to boost U.S. energy production that is already at record levels.
One of Trump's first day in office was to reverse actions taken by former President Joe Biden to limit oil drilling. Trump reversed Biden's ban on drilling for oil in the Arctic and along vast swaths of U.S. coastline.
Trump also rescinded a 2023 memo that banned oil drilling on 16 million acres (6.5 million hectares) in the Arctic, according to the White House. The moves signal a sharp shift in policy and underscore the administration's commitment to maximizing domestic energy production.
Source: Investing.com
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