Oil prices remained stable on Friday but were on track for a weekly decline as markets awaited a decision from U.S. President Donald Trump on whether to impose tariffs on Mexico and Canada.
Brent crude futures for March delivery, set to expire on Friday, fell by 9 cents to $76.78 per barrel as of 1420 GMT. Similarly, U.S. West Texas Intermediate (WTI) crude dipped by 2 cents to $72.71 per barrel. Both benchmarks were set for weekly losses of 2.2% and 2.6%, respectively.
Tariff Concerns Weigh on Oil Market
Analysts highlighted the potential economic impact of U.S. tariffs on Canada, Mexico, and China as a key factor pressuring oil prices. According to Tamas Varga of PVM, the possibility of a stronger U.S. dollar due to tariffs also weighed on the market.
President Trump has threatened to impose a 25% tariff on Canadian and Mexican exports, demanding stricter action against fentanyl shipments and illegal migration.
Canada and Mexico are the largest crude oil suppliers to the U.S., but it remains uncertain if oil exports will be subject to tariffs. Trump indicated on Thursday that he would soon decide whether to exclude oil imports from the restrictions.
Livia Gallarati, an analyst at Energy Aspects, warned that if tariffs are applied to oil, U.S. refiners could be forced to cut processing rates significantly. However, she suggested that a grace period for negotiations is likely and that oil may ultimately be exempted.
OPEC+ Meeting in Focus
Market participants are also closely watching the upcoming OPEC+ meeting on Monday, where discussions will center on Trump’s push for increased U.S. oil production.
Kazakhstan’s energy minister confirmed that the 22-member alliance, including Russia and Saudi Arabia, will address the U.S. request for higher output.
“OPEC will likely comply with the U.S. demand to increase production to avoid Trump’s ire. They might announce a gradual unwinding of voluntary cuts—if not from April, then in the second half of the year,” Varga stated.
With uncertainty surrounding U.S. trade policies and OPEC+ production strategy, oil markets remain on edge as investors await clarity in the coming days.
