Trump's tariff threat may lower oil prices from Canada and Mexico and shift supply to Asia

Oil prices from Canada and Mexico may drop as producers adjust to potential 25% import tariffs from US President-elect Donald Trump. Analysts suggest that these tariffs could force a shift in supply to Asia, impacting US consumers and the oil industry. Canada and Mexico are the largest oil exporters to the US, supplying 52% and 11% of its imports, respectively. Canadian crude exports have increased significantly in 2024, while Mexican exports have declined. Tariffs could lead to deeper discounts for Canadian oil to attract Asian buyers. If tariffs are imposed, analysts expect more Canadian and Mexican oil to be sent to China and India, where refineries can process it. However, some traders doubt Trump will implement the tariffs, as they could raise costs for US consumers and refiners.