Oil prices jumped at the market open on Monday after U.S. President Donald Trump imposes tariffs on Canada, Mexico and China, raising fears of a trade war and disruption in crude supply from two of the United States’ biggest suppliers.
U.S. West Texas Intermediate crude was at $74.27 a barrel, up $1.74, or 2.4%, by 2319 GMT, after hitting more than a week’s high at $75.18 a barrel earlier in the session.
Brent crude futures rose 73 cents, or 1%, to $76.40 a barrel.
Trump on Saturday ordered sweeping tariffs on goods from Mexico, Canada and China, kicking off a trade war that could dent global growth and reignite inflation.
Energy products from Canada will have only a 10% duty, but Mexican energy imports will be charged the full 25%, White House officials said.
The tariffs on the two biggest sources of U.S. crude imports will raise costs for the heavier crude grades U.S. refineries need for optimum production, industry sources said, cutting their profitability and potentially forcing production cuts.
That would offer European and Asian refineries a competitive advantage against their U.S. rivals, analysts and market participants said.
(Reporting by Florence Tan; Editing by Jamie Freed)