What is the impact of US tariffs on oil and refining?

On 2 April, President Trump issued sweeping tariffs by executive order, imposing a minimum rate of 10% on all trade partners, with some economies and sectors facing even higher rates.

Exemptions included:

• Energy and commodity chemical imports from countries with reciprocal tariffs
• Imports from Canada and Mexico that comply with the USMCA trade agreement (including eligible oil and gas)

“Reciprocal tariffs remain paused” case:

On 9 April, President Trump announced a pause on all reciprocal tariffs, maintaining the 10% minimum rate on all trade partners—except for China. Existing US tariffs on steel, aluminium, automobiles, and auto parts remain unchanged, along with tariffs on Mexico and Canada, except for goods covered under the USMCA agreement.

Assuming this "reciprocal tariffs remain paused" scenario holds through 2026, our preliminary estimates suggest that the US trade-weighted average tariff could rise from 2.5% in 2024 to 24% by 2026.

"Reciprocal tariffs return" case reflects the re-imposition of tariffs as per the 2 April announcement at the end of the 90 day period. 

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Oil & Refining Impact of US Tariffs, delves into a critical question: Does the exemption for energy imports shield oil and refined product markets from the broader effects of these tariffs?

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