Oil Holds Drop As Donald Trump Pledges Energy Push, Delays Tariffs

Oil prices dropped on Monday, with Brent for March settlement closing 0.8% lower at $80.15 a barrel. Meanwhile, West Texas Intermediate for March saw a decrease, falling towards $76 a barrel.

This decline comes as the oil market begins the year on a strong note. Cold weather across the Northern Hemisphere has increased demand for heating oil, and extensive US sanctions targeting Russia's oil sector have disrupted global supply chains.

In a recent statement, Donald Trump expressed his commitment to boosting domestic energy production by declaring a national emergency. He has also postponed the implementation of specific tariffs on China that were anticipated on his first day in office. Instead, Trump directed his administration to address global unfair trade practices, which includes the possibility of tariffs on Canada and Mexico.

The new president outlined plans to refill the US strategic oil reserve, which has reached historically low levels not seen since the 1980s. He indicated intentions to reverse policies from the previous administration that aimed to combat climate change, including an executive order to withdraw from the Paris Climate Agreement.

Market analysts noted that the lack of information regarding tariff specifics and sanctions on key oil-producing nations like Russia, Iran, and Venezuela creates uncertainty, potentially leading to a short-term correction in crude oil prices. Additionally, Trump's commitment to increasing domestic production may place extra downward pressure on oil prices.

With the recent challenges in ensuring global oil trade stability, Yemen's Houthis announced that they would halt attacks on US and UK vessels in the Red Sea. This decision correlates with a ceasefire agreement between Israel and Hamas and comes after more than a year of disruption in maritime trade.

Current Prices

• WTI for March delivery dropped 1.4% from Friday’s session to $76.28 a barrel.

• Futures did not settle on Monday due to a US holiday.

• The February contract, which is set to expire on Tuesday, fell by 1.3% from Friday’s close to $76.89 a barrel.

• Brent for March settlement closed at $80.15 per barrel, also reflecting a drop of 0.8%.

Oil, Tariffs, Trump