Global oil prices are heading for their second straight week of decline in 2025, even as they slightly rebounded due to market uncertainty over upcoming U.S. tariff decisions.
As of today, Brent crude, the international benchmark, is trading at $77.48 per barrel, while West Texas Intermediate (WTI) is at $73.39 per barrel. Both have shown some recovery from earlier losses but remain on track for a weekly dip. However, January has still been a good month overall, with Brent crude showing a 3.6% monthly gain, the highest since June last year.
The uncertainty stems from the U.S. President Donald Trump‘s warning of a potential 25% tariff on crude oil imports from Canada and Mexico, set to take effect on 1 February. Trump claims the tariffs aim to address issues like illegal migration and drug smuggling. However, Canada and Mexico have hinted at retaliatory measures, with Canada threatening to halt electricity exports to the U.S.
Trump’s rhetoric has added fuel to market speculation. “We don’t need the products they have,” he said recently. “We’ve got all the oil we need.” Currently, the U.S. imports about 4 million barrels of oil daily from Canada and 700,000 barrels daily from Mexico.
Market analysts are divided over the situation. Some see the tariff threats as political tactics, while others consider them a serious possibility. This uncertainty has led to a temporary bump in oil prices as traders brace for potential disruptions in supply chains.
Daniel Hynes, an energy analyst at ANZ, highlighted the broader implications. He said, “Sanctions on Russia, stopping Venezuelan oil imports, and pressure on Iran are all adding to the geopolitical risk for oil.” Hynes also noted that Trump’s plan to fill the U.S. strategic petroleum reserve would tighten global supply further.
The oil market remains on edge, with political decisions in the U.S. having a ripple effect on global energy prices. While prices might stabilise soon, this period of volatility is a stark reminder of how geopolitics and energy markets are closely intertwined.
For now, the industry is watching closely, knowing that any significant policy shift could impact fuel costs for businesses and consumers alike.