Oil Steadies Amidst Tariffs, OPEC Unlikely to Alter Output Policy
Oil prices held steady after a Monday decline, despite US President Donald Trump's threats to impose wide-ranging tariffs on imports, including key industrial commodities.
Brent crude traded around $77 per barrel, while West Texas Intermediate hovered above $73. Trump stated plans to levy tariffs on foreign-produced goods, citing steel, aluminum, and copper, in an effort to encourage manufacturing within the country.
Treasury Secretary Scott Bessent supports universal tariffs of 2.5%, according to the Financial Times. He has also advocated for stricter sanctions against Russian oil and expressed intent to "make Iran poor again."
In Canada, Alberta's premier anticipates tariffs on February 1, a date mentioned by Trump. Over half of US crude imports originate from Canada, primarily from Alberta.
Despite year-to-date gains due to winter weather and sanctions on Russia, oil prices have faced downward pressure from Trump's tariff threats. Colombia's tariff dispute with the US and a global market selloff further contributed to Monday's decline.
"Tariff headlines are weighing on sentiment, and while metals are the primary focus, the risk of escalation remains," said Warren Patterson of ING Groep NV.
Traders anticipate that OPEC and its allies will maintain their current supply policy at an upcoming meeting, despite pressure from Trump to increase production. The group plans to gradually raise output from April.
Lunar New Year holidays in Asia may result in lower trading volumes on Tuesday.