By Jamie Martin
The Government's recent announcement to impose tariffs on imports from Canada, Mexico, and China has sparked concerns across the energy sector. With no exemptions for oil and gas, the move could significantly inflate the cost of energy production and purchasing, potentially impacting gasoline prices across the United States.
Approximately 52% of US petroleum imports last year originated from Canada, with the country supplying over four million barrels daily. The US refineries' dependency on this heavy crude is unlikely to wane, despite potential cost increases from tariffs.
As Al Salazar, head of macro oil and gas research with Enverus Intelligence, noted, "I don’t think there’s any other significant competition to serve this heavy crude if I’m a US refiner. I mean, I’m only getting it from Canada. I’ve always been getting it from Canada.”
The anticipated tariffs could result in gasoline price hikes ranging from 35 cents to 75 cents per gallon, especially impacting the Midwest and Rocky Mountain regions, where refineries heavily rely on Canadian oil.
The broader implications of these tariffs could extend beyond immediate price increases. Industry insiders suggest that Canadian oil producers might reconsider their export strategies, potentially reducing the US's share in favor of diversifying their markets.
Such economic measures also raise concerns about the cost of other energy-related materials, like steel for infrastructure and solar panels for renewable energy projects, which could further complicate the US's energy landscape in the coming years.
Photo Credit: gettyimages-mrdoomits
Categories: National