No Tariffs On Crude Oil From Mexico

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No Tariffs On Crude Oil From Mexico

No Us Tariffs On Crude Oil From Mexico/Canada - Commerzbank

According to analysts from Commerzbank, the US will not impose any tariffs on the crude oil from Mexico and Canada. For now, the US government has postponed the tariffs on these 2 countries.

If the postponement is cancelled, a 10% tariff will be placed on crude oil coming from Canada. In addition, the crude oil from Mexico will come under 25% import.

Oil Demand Remains Weak

The forecasts show that the US government will once again delay the tariffs on these 2 countries. This will explain the $12 price discount for the Canadian oil in comparison to WTI.

For now, it is above $15 while it was around $18 at the start of the year 2025. Looking ahead, the price discount is expected to shrink even further.

But why is the price difference declining? Experts added that the oil supplies coming from Venezuela had declined. As a result, the US refineries had to rely on Canadian oil as a substitute.

Looking ahead, the Trump administration is highly unlikely to put tariffs on oil from Mexico and Canada. After all, they wouldn't want higher oil prices in the USA.

Higher oil prices will directly effect the GDP output of the country. It will also effect the inflation levels, further hindering the interest rate cuts.

It appears that the Trump administration wants more favorable trade agreements with Canada and Mexico. Once this is achieved, there will be no reason to impose tariffs.

Also, the threat of trade tariffs is just a tool for the US government to get what it wants. Also, the Trump administration is expected to raise the oil production in the USA to decrease its reliance on foreign crude oil.

In the meanwhile, the crude oil prices are expected to move even lower amid increased supply & mixed demand. And as far as the tariffs are concerned, they are just used as a fear tool.

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