Goldman Sachs Estimates $10 Billion Annual Impact of Proposed US Oil Tariffs
Goldman Sachs predicts that the proposed 10% US oil tariff could cost foreign producers approximately $10 billion per year. Despite the potential tariffs, Goldman anticipates the US will remain a major destination for heavy crude due to its advanced refining capabilities and competitive pricing.
The investment firm estimates that US consumers would face an annual tariff cost of $22 billion, while the government would generate $20 billion in revenue. Refiners and traders, however, could benefit by linking discounted US light crude to foreign heavy crude and premium coastal markets, potentially gaining $12 billion.
Canada, the largest oil exporter to the US, is expected to continue exporting its 3.8 million barrels per day (bpd) through pipelines, with prices adjusting to offset the tariff. Similarly, 1.2 million bpd of seaborne heavy crude imports from Canada and Latin American countries like Mexico and Venezuela would likely see discounts to maintain their market share.
Goldman Sachs emphasizes that Canadian producers, with limited alternative buyers, would face the brunt of the tariff burden and be forced to offer price discounts to remain competitive in the US market.