“Tariffs will have limited impact” - According to Goldman Sachs, there will be no swings in oil and gas prices
New tariffs imposed by U.S. President Donald Trump on imports from Canada, Mexico and China are expected to have a limited short-term impact on global oil and gas prices, Goldman Sachs said in a note on Sunday.
"The potential decline in natural gas imports from Canada is too small to significantly increase U.S. gas prices," the bank said.
Oil and gas prices rose on Monday after Trump imposed tariffs over the weekend. The tariffs, which will take effect on Feb. 4, include a 25% tax on most goods from Mexico and Canada, with a 10% tax on energy imports from Canada and 10% on Chinese imports.
"Canadian oil producers are expected to bear the bulk of the tariff burden with a discount of $3 to $4 per barrel on domestic crude, given limited alternative export markets. While U.S. consumers of refined products will bear the remaining $2 to $3 per barrel," Goldman Sachs explained.
According to the report, oil imports from Canada and Mexico will be redirected to other markets, with the US replacing those supplies with crude oil from OPEC, Latin America and refined products from Europe.
The investment bank kept its 2025/2026 oil price forecasts unchanged, expecting minimal near-term price impact due to stable global oil production and demand, as well as the Canadian tariff on black gold.
Trump said he would talk to the leaders of Canada and Mexico, which have announced retaliatory tariffs, but downplayed expectations that they would change his mind. However, Goldman Sachs analysts said the United States' tariffs on Mexico and Canada would be short-lived.
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