Oil prices traded higher on Friday as traders assessed the potential impact of tariffs that United States President Donald Trump has threatened to impose on Canadian and Mexican exports. The proposed 25% levy, which could take effect as early as Saturday, has injected uncertainty into the energy markets.
By 3:30 pm AEDT (4:30 am GMT) Brent crude futures for March rose $0.63 or 0.8% to US$77.50 a barrel, while the more actively traded April contract climbed $0.50 or 0.7% to $76.23 per barrel. Meanwhile, U.S. West Texas Intermediate (WTI) crude for April gained $0.69 or 1% to $73.42 per barrel.
Despite Friday's gains, Brent is on track for a 1.6% decline this week, while WTI is down 2%.
However, both benchmarks are set for monthly gains, with Brent up 3.6% - its best performance since June - and WTI rising 2% in January.
Trump has warned that unless Canada and Mexico curb fentanyl shipments into the U.S., he will move forward with a 25% tariff on their exports. It remains uncertain whether crude oil will be included in the restrictions.
On Thursday, the President stated that he would soon decide on whether to exempt Canadian and Mexican oil imports from the measure.
In 2023, Canada and Mexico supplied more than 71% of U.S. crude oil imports, accounting for the majority of the 6.5 million bpd total imports according to the U.S. Congressional Research Service.
