Trump to Impose Oil and Gas Tariffs by Feb. 18, Easing Canadian Crude Levy

U.S. President Donald Trump announced plans to impose tariffs on oil and gas imports, expected to take effect around February 18. While he did not specify which countries would be affected, he indicated that the tariff on Canadian crude could be reduced to 10%, down from the previously mentioned 25%.

The U.S. imports approximately 4 million barrels per day of Canadian oil, with about 70% processed by refiners in the Midwest. Analysts warn that imposing tariffs could increase fuel costs and reduce production at refineries reliant on heavier crude from Canada and Mexico. Many refiners in the region, including Phillips 66, HF Sinclair, and Par Pacific Holdings, could face supply disruptions if tariffs take effect.

Phillips 66 has stated that production cuts may occur in the Midwest and Rocky Mountain region due to limited alternative crude sources. Meanwhile, Valero, the second-largest U.S. refiner, is preparing for multiple scenarios. "Our teams are working on strategies to mitigate the impact of Trump's tariffs," said Valero COO Gary Simmons.

Earlier this month, U.S. crude imports from Canada reached record levels. However, with the looming tariffs, refiners are bracing for potential operational challenges and cost increases. The oil industry now awaits further details on the administration’s final tariff decision.