Oil Prices Dip Amidst US Production Push & Tariff Cuts

21 Jan 2025 , 10:27 AM

Tuesday’s Asian trading saw a decline in oil prices as President Donald Trump postponed imposing fresh tariffs and unveiled a plan to increase U.S. oil and gas output.

At $80.04 per barrel, Brent crude futures fell 11 cents, or 0.14%.

Following Friday’s close, the most actively traded West Texas Intermediate crude March contract dropped 67 cents to $76.72 per barrel. Due to a public holiday, the U.S. market did not settle on January 20. Tuesday is the last day of the February contract.

Oil prices fell after President Donald Trump revealed a plan to increase U.S. oil and gas output and stated that he was considering putting 25% tariffs on imports from Canada and Mexico starting on February 1 rather than immediately.

However, levies on Canadian oil may eventually cause the market to rise.

The United States purchases nearly all of Canada’s oil exports, which are usually sold to WTI at a discount.

Trump outlined a comprehensive plan to expedite power, gas, and oil permits in order to maximize the already record-high energy production in the United States.

He instructed federal agencies to look into unfair trade practices by other nations, but he did not immediately enact any comprehensive new trade regulations.

Trump added that the United States will “probably” no longer purchase Venezuelan oil. After China, the United States is the second-largest purchaser of Venezuelan oil.

He also pledged to replenish strategic stocks, which could increase demand for U.S. crude oil and raise oil prices.

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