Oil Prices Dip as Markets React to Trump’s Energy Emergency Declaration and Tariff Speculation

Oil prices continued their decline on Wednesday, extending losses from the previous session. Markets are weighing the implications of U.S. President Donald Trump’s declaration of a national energy emergency and his proposed tariff policies.

Market Performance

• Brent Crude Futures: Fell 36 cents (0.5%) to $78.93 per barrel as of 07:30 GMT.
• U.S. West Texas Intermediate (WTI): Dropped 46 cents (0.6%) to $75.37 per barrel.

Both contracts settled lower on Tuesday following Trump’s announcement of a sweeping plan to maximize U.S. oil and gas production.

Key Energy Policy Changes

Trump’s measures, which include:

• Declaring a national energy emergency to expedite permitting processes.
• Rolling back environmental protections.
• Withdrawing the U.S. from the Paris Climate Accord.

These policies are aimed at bolstering domestic production but are unlikely to drive immediate investments or alter short-term U.S. production growth. Analysts at Morgan Stanley noted that these measures could moderate the decline in demand for refined products but have limited near-term impact on overall production.

Trump also pledged to refill the Strategic Petroleum Reserve, but analysts remain skeptical about its influence on demand, as similar purchases were already initiated by the Biden administration.

Tariff Concerns and Trade Policy

Investors are treading cautiously as Trump floated the possibility of imposing 25% tariffs on imports from Canada and Mexico starting February 1. While this marks a delay from his initial promise to enact tariffs on his first day, the announcement has kept markets on edge.

The U.S. President also hinted at halting oil imports from Venezuela, a major supplier to the U.S., which could further disrupt trade flows in the energy sector.

Winter Storm and Its Impact

A rare winter storm sweeping across the U.S. Gulf Coast has had varied impacts on oil operations:

• North Dakota: Oil production dropped by 130,000–160,000 barrels per day (bpd) due to operational challenges from extreme cold weather, according to the state’s pipeline authority.
• Texas: The storm’s impact has been minimal, with limited disruptions to gas flows and sufficient gasoline inventories despite road closures and adverse weather conditions.

Outlook

Oil markets remain under pressure as traders digest Trump’s energy policies and tariff plans alongside potential weather-related disruptions. The uncertainty surrounding trade and energy policies is expected to influence oil price trends in the coming weeks.

For now, Brent and WTI remain subdued, reflecting cautious sentiment among investors as they await clearer direction on U.S. energy and trade strategies.