WASHINGTON: US President Donald Trump has revealed that his administration intends to implement tariffs on oil and gas imports starting around February 18, with a possible reduction in duties on certain Canadian crude.
The United States imports approximately 4 million barrels of oil per day from Canada, with about 70% processed by refiners in the US Midwest. Analysts have warned that imposing tariffs on these oil imports could reduce fuel production in the region and raise consumer costs.
Trump did not specify which countries would be affected by the new tariffs, but confirmed plans to introduce them soon. “We’re going to put tariffs on oil and gas,” Trump stated from the White House’s Oval Office, adding that the tariffs would likely begin around February 18.
When asked if Canadian crude would be subject to the tariffs, Trump indicated a potential reduction in the duty, suggesting a decrease to 10% rather than the previously discussed 25%.
Many US refineries, particularly in the Midwest, depend on imported crude, such as Canadian and Mexican oil, as their facilities are designed to process heavier crude varieties. The announcement has prompted refiners to prepare for the impact of these tariffs. Canadian crude imports to the US reached record highs earlier this month.
Phillips 66, a major US refiner, anticipates reduced production in the Midwest and Rocky Mountain regions if the tariffs are imposed, given the limited availability of alternative crude supplies. Similarly, HF Sinclair and Par Pacific Holdings, which have significant exposure to Canadian crude, are closely monitoring the situation.
“We’ve been working hard to evaluate all possible scenarios and how we would respond to the new tariffs,” said Gary Simmons, chief operating officer of Valero, the second-largest US refiner by capacity, during a recent call with analysts.
