Oil prices rose on Friday as markets weighed the threat of tariffs by U.S. President Donald Trump on Mexico and Canada, the two largest crude exporters to the U.S., that could take effect this weekend, according to Reuters.
Brent crude futures for March, which expires on Friday, gained 61 cents at US$77.48 a barrel at 0430 GMT. The more active April contract was at US$76.37 a barrel, up 48 cents.
U.S. West Texas Intermediate crude (WTI) gained 65 cents to US$73.38.
For the week, Brent is set to fall 1.3 percent while WTI has declined 1.69 percent.
However, for the month of January, Brent is set to gain 3.8 percent, its best month since June, and WTI is poised to climb 2.3 percent.
“Crude oil prices declined this week due to increasing fears surrounding Trump’s tariffs, which are expected to hinder global economic growth,” Priyanka Sachdeva, senior market analyst at Phillip Nova told Reuters.
Trump has threatened to impose a 25 percent tariff as early as Saturday on Canadian and Mexican exports to the United States if those two countries do not end shipments of fentanyl across U.S. borders.
It is unclear if the tariffs would include crude oil. On Thursday, Trump said he would soon decide whether to exclude Canadian and Mexican oil imports from the tariffs.
In 2023, the last full year of data, Canada exported 3.9 million barrels per day of crude to the U.S., out of 6.5 million bpd of total imports, while Mexico exported 733,000 bpd, according to the U.S. Energy Information Administration, the statistical arm of the Department of Energy.
The increased risk of supply disruptions from the foreign policies of the new Trump administration has kept prices elevated.
The market will be watching the upcoming OPEC+ meeting scheduled for Feb. 3 as recent U.S. sanctions on Russian oil have removed over a million barrels from global supplies, possibly prompting the producer group to reconsider its output plans, Reuters reported.
Oil traders are making big moves in the Brent-Dubai spread, a contract that lets them speculate on the price gap between Middle Eastern crude and global benchmark Brent. The action has hit record levels, thanks to U.S. sanctions on Russian oil that are forcing buyers to look elsewhere for supply, according to a report by OilPrice.
This week, open interest on the Brent-Dubai contract surged to an all-time high of 448,000 contracts, Bloomberg stated on Thursday. That spike comes as Dubai crude recently hit its highest premium over Brent in at least a decade.