-Oil prices rose on Friday as markets weighed the threat of tariffs by U.S. President Donald Trump on Mexico and Canada, the two largest crude exporters to the U.S., that could take effect this weekend.
Brent crude futures for March, which expires on Friday, gained 27 cents at $77.14 a barrel by 0735 GMT. The more-active April contract was at $76.19 a barrel, up 30 cents.
U.S. West Texas Intermediate crude (WTI) gained 48 cents to $73.21.
For the week, Brent is set to fall 1.73% while WTI has declined 2%.
However, for the month of January, Brent is set to gain 3.35%, its best month since June, and WTI is poised to climb 2.04%.
“Crude oil prices declined this week due to increasing fears surrounding Trump’s tariffs, which are expected to hinder global economic growth,” said Priyanka Sachdeva, senior market analyst at Phillip Nova.
Investors are contemplating the likelihood of U.S. tariffs alongside a flurry of executive orders and policy announcements, ANZ Bank analyst Daniel Hynes said.
Trump has threatened to impose a 25% tariff as early as Saturday on Canadian and Mexican exports to the United States if those two countries do not end shipments of fentanyl across U.S. borders.
It is unclear if the tariffs would include crude oil. On Thursday, Trump said he would soon decide whether to exclude Canadian and Mexican oil imports from the tariffs.
In 2023, the last full year of data, Canada exported 3.9 million barrels per day of crude to the U.S., out of 6.5 million bpd of total imports, while Mexico exported 733,000 bpd, according to the U.S. Energy Information Administration, the statistical arm of the Department of Energy.
The increased risk of supply disruptions from the foreign policies of the new Trump administration has kept prices elevated, Hynes said.
“Sanctions on Russia, stopping purchases of Venezuelan oil and maximum pressure on Iran will increase the geopolitical risk premium on oil,” said Hynes.
“This could be compounded by the refilling of the strategic petroleum reserve, adding to oil demand,” he said.
The market will be watching the upcoming OPEC+ meeting scheduled for Feb. 3 as recent U.S. sanctions on Russian oil have removed over a million barrels from global supplies, possibly prompting the producer group to reconsider its output plans, Phillip Nova’s Sachdeva said.
Kazakhstan’s energy minister said on Wednesday that the group is set to discuss Trump’s plans to raise U.S. oil production and take a joint stance on the matter at next week’s meeting.
