Asia likely to benefit from cheaper Mexican, Canadian oil if Trump imposes tariffs

Oil producers in Canada and Mexico will likely be forced to reduce prices and divert supply to Asia if US President-elect Donald Trump imposes 25 percent import tariffs on crude imports from the two countries, traders and analysts said.

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Two sources familiar with Trump's plan told Reuters that oil would not be exempted from potential tariff hikes on imports from Canada and Mexico, despite the US oil industry's warnings that the policy could hurt consumers, industry and national security.

The US accounts for 61 percent of waterborne flows from Canada, and 56 percent from Mexico, respectively, ship tracking data from Kpler showed.

Canadian waterborne crude exports have jumped 65 percent to about 530,000 barrels per day (bpd) in 2024, the data showed, after the opening of the expanded Trans Mountain (TMX) pipeline increased shipments to the United States and Asia.