Oil Plunges as Trump Delays Tariffs, Vows to Boost Production
Brent crude dropped over 1% to below $80 a barrel after President Trump announced plans to hold off on tariffs that could limit supply and weaken demand. The move provided some relief to broader markets, although Trump's vow to increase domestic energy production through executive orders capped gains.
The lack of immediate tariffs allayed concerns over disruptions to Canadian crude imports, a major source for the US. However, Trump's pledge to unleash a wave of executive orders, including invoking emergency powers to boost drilling, kept traders cautious.
The year has started with a surge in crude prices due to frigid temperatures in the Northern Hemisphere and US sanctions on Russia's oil sector. Cold weather in the US continued to affect supply on Monday.
The Russian sanctions have disrupted tanker markets and pushed Chinese refiners to seek alternative European supplies. However, speculators anticipate a slowdown in the Middle Eastern oil market rally that followed the sanctions announcement.
Trump's Treasury Secretary nominee, Scott Bessent, has expressed support for intensifying measures against Russia's oil industry, potentially causing further disruption. Similarly, his pick for National Security Advisor has pledged "maximum pressure" on Iran.