Oil prices jumped at the market open on Monday after United States President Donald Trump imposed new tariffs on Canada, Mexico, and China, fueling concerns of a trade war and potential disruptions to crude supplies from two of the United States' largest energy partners.
By 2:45 pm AEDT (3:45 am GMT) Brent crude futures advanced $0.54, or 0.7%, to trade at US$76.21 a barrel, while U.S. West Texas Intermediate (WTI) crude climbed $0.88, or 1.2%, to $72.86 a barrel.
The surge followed Trump’s sweeping tariff announcement on Saturday, which imposed duties on goods from key trading partners, raising fears of slowing global growth and renewed inflationary pressures.
White House officials confirmed that energy imports from Canada would face a 10% duty, while Mexican energy products would be subject to a full 25% tariff.
Market analysts warned that the levies on crude imports from Canada and Mexico - two major suppliers of heavy crude essential for U.S. refinery operations - could increase production costs for American refiners, eroding profitability and potentially leading to output reductions.
The news caused a sell-off among major oil producers, with the S&P 500 Energy sector falling 2.7% on Friday.
Among reporting oil companies, Chevron dropped 4.6% after posting an adjusted profit of $2.06 per share for the fourth quarter, falling short of $2.11 expected, while revenues were reported at $52.23 billion versus $46.6 billion expected.
Meanwhile, Exxon lost 2.5% as its refining and chemicals business showed weakness, while earnings from its oil and gas production rose to US$6.28 billion.
Earnings per share (EPS) was reported at $1.72 versus $1.67 expected, while revenues came in at $84.43 billion versus $86.33 billion expected.
