Asia Set to Benefit from Cheaper Canadian and Mexican Oil if Trump Imposes Tariffs

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Asia: Oil producers in Canada and Mexico are expected to lower their prices and redirect supply to Asia if U.S. President-elect Donald Trump proceeds with his plan to impose a 25% import tariff on crude oil from these two countries. Traders and analysts suggest that the tariffs could reshape global oil flows, benefitting Asian markets. Sources familiar with Trump’s proposed plan told Reuters that crude oil would not be exempt from potential tariff hikes on imports from Canada and Mexico, despite warnings from the U.S. oil industry that such a policy could negatively impact consumers, the oil sector, and even national security. Canada and Mexico are the top two oil exporters to the United States, supplying 52% and 11% of its crude imports, respectively, according to the U.S. Energy Information Administration. In addition, the United States accounts for a significant portion of waterborne oil shipments from both countries, receiving 61% of Canada's exports and 56% of Mexico's oil, based on ship tracking data from Kpler. Should the tariffs take effect, producers in Canada and Mexico may look to redirect their surplus supply to Asia, where demand for oil is steadily increasing, particularly from major importers like China, Japan, and India. This shift could lead to lower oil prices in Asian markets, further influencing global trade dynamics and energy prices.