Crude Oil Prices Plunge Over 2% as Trump’s New Tariffs Spare Energy Sector

Oil prices tumbled after US President Donald Trump announced sweeping tariffs on major trading partners, including China and the European Union, sparking fears of a broader trade war that could dampen global economic growth and energy demand.

At 8:39 AM (IST), Brent crude dropped by 2.28% to $73.24 per barrel, while West Texas Intermediate (WTI) crude fell 2.44% to $69.96. The sharp decline in oil prices mirrored a broader selloff in global markets as investors reacted to Trump’s latest and most aggressive tariff measures to date.

Energy Products Exempted from New Tariffs 

Despite the widespread levies, oil, natural gas, and energy-related products have been excluded from the new tariffs, the White House confirmed. This exemption spares the direct impact on global fuel markets, ensuring continued trade flows in key energy commodities.

Trump has imposed a minimum 10% tariff on all goods imported into the US, with additional duties targeting around 60 nations with significant trade imbalances. While Canada and Mexico—two key crude oil suppliers to the US—have been spared, China will face an additional 34% tariff on top of existing duties. The European Union has been hit with a 20% levy. The baseline tariffs take effect at midnight on Saturday, with the higher duties coming into force on April 9.

Crude Prices Volatile Amid Trade Uncertainty 

Trump’s latest tariff announcement continues to disrupt global crude markets, which have been volatile amid his administration’s policy shifts, sanctions, and trade restrictions. The president has used tariffs as a means to reshape trade dynamics, boost domestic manufacturing, and gain leverage in geopolitical negotiations.

While the market is grappling with the negative effects of the new levies, bullish sentiment has emerged due to US sanctions on Russia and Iran, as well as OPEC+ efforts to enforce production limits among its member nations.

Canadian Oil Discount Narrows Amid Exemption 

The tariff exemption for Canadian crude has significantly impacted market dynamics. The discount on Canadian heavy crude relative to WTI has shrunk to its narrowest level since 2020, reflecting relief among traders over the continued US-Canada energy trade.

Meanwhile, the overall market downturn weighed heavily on refined product markets. US benchmark gasoline futures fell more than 3%, and profit margins for refining crude into fuels also declined broadly.

Conclusion 

Trump’s sweeping tariffs have rattled global markets, driving oil prices lower amid fears of slowed economic growth. While energy products remain exempt, trade uncertainties continue to fuel volatility. 

The market impact is mixed, with Canadian crude benefiting from exemptions, while refined product markets and broader investor sentiment remain under pressure.

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