West Texas Intermediate (WTI) crude oil prices have recorded slight gains, currently hovering around $72.85 during the early session on Friday in Asia. This modest uptick comes as traders evaluate the implications of potential U.S. tariffs on crude imports from Canada and Mexico amidst rising geopolitical tensions. The tariffs, proposed by President Trump, could reach as high as 25% and are set to be imposed as early as Saturday.
The looming tariffs create uncertainty in the market, especially since it remains unclear whether oil imports will be included in the proposed measures. In an effort to avoid such tariffs, both Canada and Mexico have been urged to take swift action against the flow of fentanyl across their borders. This political backdrop is contributing to a cautious atmosphere among oil traders, who are assessing potential disruptions in supply chains.
Attention is also focused on the upcoming meeting of OPEC and its allies, known as OPEC+, which is scheduled for Monday. This gathering will be significant for the oil market, as discussions may impact production levels and pricing strategies. The current administration continues to press OPEC and especially Saudi Arabia to consider reducing oil prices, emphasizing that a decrease in crude prices could potentially alleviate international conflicts, including the situation in Ukraine.
Additionally, the oil market could see upward pressure from stricter U.S. sanctions targeting Russia’s oil sector. Recent sanctions have specifically impacted companies such as Gazprom Neft and Surgutneftgas, which collectively exported nearly 970,000 barrels per day of Russian crude in the first ten months of 2024. The potential reduction in Russian oil exports adds a layer of support for crude oil prices, reflecting the complex dynamics affecting the global energy landscape.
