Crude %Oil prices are a bright spot in an otherwise down day for markets around the world as investors digest news of U.S. import tariffs placed on goods from Canada, Mexico, and China.
Brent crude oil, the international standard, is up 1.70% and trading right around 77 U.S. per barrel.
West Texas Intermediate (WTI) crude oil, the American benchmark, has risen 2.62% to trade at $74.43 U.S. a barrel as markets calculate the implications of U.S. tariffs and the potential for a global trade war.
The rise in crude oil prices come as stock markets around the world selloff sharply, with the blue-chip Dow Jones Industrial Average down more than 600 points in premarket trading.
Analysts say oil prices are marching higher on fears that the tariffs imposed by U.S. President Donald Trump could disrupt global supplies.
U.S. tariffs of 10% on Canadian crude oil and natural gas are less than the 25% tariffs imposed on other imports from Canada.
However, Canada’s political leaders have threatened to use energy against the U.S. in a full-blown trade war.
Canadian Prime Minister Justin Trudeau has said that Canada might impose an export duty on Canadian oil and natural gas sent to the U.S. and even limit energy exports to America.
Mexican energy imports to the U.S. face a 25% tariff. Together, Canada and Mexico supply a quarter (25%) of all crude oil processed by U.S. refineries.
Analysts say that the OPEC+ oil cartel is unlikely to alter its production plans or strategy to unwind output cuts gradually in the wake of the U.S. tariffs.
Some analysts are also warning that the current bump in energy prices could be temporary and that crude oil prices could plummet should global economic growth slow because of damaging trade wars, leading energy demand to collapse worldwide.
