US: Oil prices fluctuate as Donald Trump signals tariffs and energy policy changes

Oil prices fluctuated as traders reacted to Donald Trump's tariffs on Canada and plans for increased domestic energy production

Oil swung between gains and losses as traders digested a slew of pledges and executive orders from President Donald Trump, including the threat of tariffs on Canada and plans to boost domestic energy output.

As markets processed a plethora of promises and executive orders from President Donald Trump, such as the prospect of tariffs on Canada and vows to increase American energy output, oil fluctuated between gains and losses. (REUTERS/Carlos Barria)

Brent traded above $80 a barrel after three days of losses, while West Texas Intermediate was near $77. Trump flagged tariffs of as much as 25% on crude producers Canada and Mexico by the start of next month, and signed an order declaring a national energy emergency.

Still, Trump held off unveiling China-specific levies on day one in office, instead ordering his administration to address unfair trade practices globally, according to a fact sheet seen by Bloomberg.

Oil has started the year strongly after cold weather in the Northern Hemisphere led to higher heating demand and broad US sanctions on Russia’s oil industry upended global flows. Trump’s nominee for Treasury secretary said he would support dialing up measures on Moscow, which could mean more disruption. There’s also the prospect for sanctions on Iran and Venezuela.

“We’re thinking in terms of 25% on Mexico and Canada, because they’re allowing vast numbers of people,” into the country, Trump said in response to questions from reporters, as he sat behind the Oval Office’s Resolute Desk on Monday. “I think we’ll do it February 1.”

Trump said he plans to refill the US strategic oil reserve “right to the top” after it reached lows not seen since the 1980s, and signed an order to withdraw from the Paris Climate Agreement. He also revoked offshore oil and gas leasing bans that effectively blocked drilling in most US coastal waters.

The Yemen—based Houthis, meanwhile, said they will stop attacking US and UK ships in the Red Sea area in response to the Israel-Hamas ceasefire agreement. Their campaign has lasted over a year and upended global trade.