Oil Swings as Trump Signals Canada Tariffs, Domestic Energy Push

Oil swung between gains and losses as traders digested a slew of pledges and executive orders from President Donald Trump, including the threat of tariffs on Canada and plans to boost domestic energy output, Bloomberg reported.

Brent traded above $80 a barrel after three days of losses, while West Texas Intermediate was near $77. Trump flagged tariffs of as much as 25% on crude producers Canada and Mexico by the start of next month, and signed an order declaring a national energy emergency.

Still, Trump held off unveiling China-specific levies on day one in office, instead ordering his administration to address unfair trade practices globally, according to a fact sheet seen by Bloomberg.

“The initial sense of relief that trade measures weren’t an immediate focus of Trump’s ‘Day One’ was quickly offset by reports of 25% tariffs on Mexico and Canada,” said Yeap Jun Rong, market strategist for IG Asia Pte. “A potential surge in oil production with Trump’s ‘drill baby drill’ emphasis this morning remains a significant overhang as well.”

Crude has started the year strongly after cold weather in the Northern Hemisphere led to higher heating demand and broad US sanctions on Russia’s oil industry upended global flows. Trump’s nominee for Treasury secretary said he would support dialing up measures on Moscow, which could mean more disruption. There’s also the prospect for sanctions on Iran and Venezuela.

The US imports around 4 million barrels of Canadian crude a day, and Goldman Sachs Group Inc. and Canada’s oil industry have previously warned that tariffs would result in higher gasoline and energy costs for US consumers.

Trump said he plans to refill the US strategic oil reserve “right to the top” after it reached lows not seen since the 1980s, and signed an order to withdraw from the Paris Climate Agreement. He also revoked offshore oil and gas leasing bans that effectively blocked drilling in most US coastal waters.

Other actions include an order to end a so-called electric-vehicle mandate, while he reiterated a call for the European Union to buy more US oil and gas if the bloc wants to avoid tariffs.

The Yemen—based Houthis, meanwhile, said they will stop attacking US and UK ships in the Red Sea area in response to the Israel-Hamas ceasefire agreement. Their campaign has lasted over a year and upended global trade.