Oil Slips as Tariff Risks Outweigh Sanctions

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Both benchmarks are on track to book their first weekly loss in a month and the first monthly decline since November 2024, amid continued tariff threats from U.S. President Donald Trump and prospects of peace talks to end the war in Ukraine.  

On Thursday, President Trump said that the proposed – and once deferred by a month – tariffs on Canada and Mexico would go into effect on March 4.

In Canada’s case, energy imports would be taxed 10%.

The return of trade war fears weighed on oil prices amid concerns that the global economy, including the U.S. economy, could see slowdown in growth, while inflation would rise. Such a scenario would delay the next interest rate cut by the Fed and other central banks.

Uncertainty is very high in the oil market right now, which has also led to speculators cutting their exposure to oil and lowering their longs in the two most important crude futures contracts.

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