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OIL: Asia Big Winner if Trump Imposes Oil Tariffs: Reuters

OIL
BulletEnergy BulletsCommodities

Oil producers in Canada and Mexico will likely be forced to reduce prices and divert supply to Asia if Trump imposes 25% import tariffs on crude imports from the two countries, traders told Reuters.

  • Sources familiar with Trump’s plan told Reuters that oil would not be exempted from potential tariffs.
  • The US accounts for 61% and 56% of crude exports from Canada and Mexico respectively, Kpler said.
  • Canadian producers may have to steepen discounts if they cannot re-reroute their barrels previously exported to the US, hitting revenue, Daan Struyven, co-head of global commodities research at Goldman Sachs told Reuters.
  • Canada and Mexico mainly export heavy sour grades to the US.
  • "The impact is all on the heavy grades. What are the U.S. refiners going to do? Even Saudi Arabian Heavy crude is limited," a trader told Reuters. "Either the producer or the refiner will have to absorb the tariffs,"
  • Refining sources in Asia told Reuters that they expect to see more Canadian and Mexican oil heading to Asia if Trump imposes the tariffs. 
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Oil producers in Canada and Mexico will likely be forced to reduce prices and divert supply to Asia if Trump imposes 25% import tariffs on crude imports from the two countries, traders told Reuters.

  • Sources familiar with Trump’s plan told Reuters that oil would not be exempted from potential tariffs.
  • The US accounts for 61% and 56% of crude exports from Canada and Mexico respectively, Kpler said.
  • Canadian producers may have to steepen discounts if they cannot re-reroute their barrels previously exported to the US, hitting revenue, Daan Struyven, co-head of global commodities research at Goldman Sachs told Reuters.
  • Canada and Mexico mainly export heavy sour grades to the US.
  • "The impact is all on the heavy grades. What are the U.S. refiners going to do? Even Saudi Arabian Heavy crude is limited," a trader told Reuters. "Either the producer or the refiner will have to absorb the tariffs,"
  • Refining sources in Asia told Reuters that they expect to see more Canadian and Mexican oil heading to Asia if Trump imposes the tariffs.