The new tariffs imposed by the US President, Donald Trump, on imports from Canada, Mexico and China will likely have limited near-term impact on global oil and gas prices, Goldman Sachs said in a note on Sunday.
“The potential decline in U.S. imports of natural gas from Canada due to tariffs is too small to significantly increase U.S. natural gas prices,” the bank said.
Oil and gas prices jumped on Monday after Trump imposed tariffs over the weekend.
Impact of tariffs on oil and gas
The tariffs, which will take effect on February 4, include a 25% tariff on most Mexican and Canadian goods, a 10% tariff on Canadian energy imports, and a 10% tariff on Chinese imports.
“Canadian oil producers are likely to end up bearing the brunt of the tariff, with a larger-than-normal discount of $3 to $4 per barrel on Canadian crude due to limited alternative export markets, with U.S. consumers of refined products bearing the remaining burden of $2 to $3 per barrel,” the bank said.
According to the note, the US will redirect seaborne oil imports from Canada and Mexico to other markets and replace those supplies with crude oil from OPEC, Latin America and refined products from Europe.
Market forecasts and political reactions
The investment bank has kept its oil price forecasts for 2025/2026 unchanged. It expects a minimal impact on prices in the short term. This is due to stable global oil production and demand. In addition, the Canadian oil tariff has already been priced in.
Last week, Goldman Sachs raised its Brent crude price forecast for this year and 2026. The new estimate for 2024 rose to $78 from $76 previously forecast. For 2026, the projection rose to $73 from $71 previously estimated.
Trump said he would speak to leaders of Canada and Mexico. Those countries have announced their own retaliatory tariffs. However, Trump downplayed expectations that they would change their minds.
In a separate note, Goldman Sachs analysts said the U.S. tariffs on Mexico and Canada will be short-lived.
Source: Rahul Paswan | Notícias Agrícolas
