Oil prices jumped Thursday as traders assessed the impact of potential tariffs on Canadian oil imports after President Trump said levies against Canada and Mexico would go into effect next week, adding to supply worries following the announced cancellation of Chevron’s license to operate in Venezuela.
On Thursday, West Texas Intermediate crude (CL=F) rose more than 2% to hover above $70 per barrel. Brent futures (BZ=F) also popped nearly 2% to trade above $73 per barrel.
On Thursday morning, the president posted on social media that tariffs against Mexico and Canada would go into effect as scheduled on March 4.
The president’s plan presumably would include levies of 10% against Canadian petroleum imports.
Still, analysts believe Canadian producers would eat up most of the added costs at first since their infrastructure is not set up to export to many other markets besides the US.
“With limited immediate export alternatives, Canadian producers may bear 80% of the burden, while US refiners absorb 20% through reduced profit margins, potentially raising crude input costs by 2% and increasing US gasoline prices by about $0.04 per gallon,” wrote JPMorgan analysts.
Earlier in the session, oil moved up from its lowest level of 2025 after Trump announced on Wednesday the US would reverse a concession agreement with Venezuela that dates back to November 2022.
Though Trump did not mention Chevron (CVX) by name, he appeared to refer to a concession agreement in which the US granted the company permission to produce and export Venezuelan oil despite sanctions against President Nicolas Maduro’s government.
In a statement to Yahoo Finance, Chevron said, “We are aware of today’s announcement and are considering its implications,” adding the company operates in compliance with all laws and regulations, including the US sanctions framework.
Traders assessed Thursday’s upward price movement against the prospects of a peace deal between Russia and Ukraine.
“While the Chevron/Venezuela halt to business may pull barrels away from US imports in the near term, the bigger question on traders’ mind will be if a peace deal is cut in Russia along with OPEC still possibly raising production in April,” wrote Dennis Kissler, senior vice president at BOK Financial, in a note on Thursday.
The Organization of the Petroleum Exporting Countries and its allies, including Russia, are scheduled to add more barrels of oil into the market in April after years of production cuts. However, Wall Street anticipates the cartel is likely to delay the unwind for a fourth time.
