New Tariffs Unlikely to Significantly Impact Oil and Gas Prices in Near Term
Goldman Sachs expects the recently imposed tariffs by the US on imports from Canada, Mexico, and China to have a minimal impact on global oil and gas prices in the short term.
The bank's analysis indicates that the potential reduction in US natural gas imports from Canada due to tariffs is too small to cause a significant rise in US natural gas prices.
Despite an initial surge in oil and gas prices following the announcement of tariffs, Goldman Sachs maintains its oil price forecasts for 2025 and 2026 unchanged. This stability reflects expectations of balanced global oil production and demand, as well as the already-priced-in effect of the Canadian oil tariff.
Goldman Sachs anticipates that Canadian oil producers will bear the primary burden of the tariff, resulting in wider-than-normal discounts on Canadian crude due to limited alternative export markets. US consumers are expected to cover the remaining portion of the cost.
Seaborne oil imports from Canada and Mexico may be redirected to other markets, with the US replacing them with crude from OPEC, Latin America, and refined products from Europe.
The bank's analysts believe that the US tariffs on Mexico and Canada will be temporary and unlikely to have long-lasting effects.