Price at the Pump: Oil Prices Jump After Tariff Announcement

After weeks of promise, the Trump Administration announced tariffs against Mexico and Canada of 25% this weekend, plus an additional 10% tariffs against China.  While the tariffs were expected, it was still a shock to investors, with the Dow shedding over 500 points in early trade.  Oil prices reacted in a similar way moving higher Monday morning.

“The concern is that this could spark a broader trade war, or there could be implications on global supply of crude oil," said Patrick DeHaan is with Gasbuddy.com.  "And so oil prices earlier [Monday] morning, were up about $1.50 a barrel.  But now Russia, coming in and complicating the situation, suggesting that they are going to be boosting oil output in April.  Of course, Russia right now is heavily sanctioned by not only the outgoing Biden Administration, but those sanctions have continued under President Trump thus far.”

Oil prices cooled a bit after that news from Russia, trading around $71 per barrel for West Texas Crude early Tuesday morning.  Oil prices also settled down after pauses were announced for tariffs against both Canada and Mexico.  If those tariffs, specifically against Canada, return, DeHaan expects oil prices to start moving higher again.

The question everyone in the Northwest is asking; will tariffs against Canada translate into higher prices locally?  DeHaan said the west coast may only see lower-level impacts.

“Where there is not much reliance on Canadian oil, so there will be less of a impact for fuel prices in the West.  But having said that, the northeastern United States areas like New England are likely to see impacts of anywhere from 10 to $0.25 a gallon.  Whereas the Midwest, the Great Lakes and Rockies will likely also see a high proportion of impact because their refineries generally rely much more on Canadian oil than elsewhere.”

This tariff spat is big news in the U.S. and in Canada, but how is the rest of the world digesting this information?  Find out by listening to our entire conversation with DeHaan in our Price at the Pump podcast:

If you have a story idea for the PNW Ag Network, call (509) 547-1618, or e-mail glenn.vaagen@townsquaremedia.com