TRUMP TARIFFS WILL FORCE US TO TURN TO BRAZIL, IRAQ FOR OIL SUPPLIES

US oil refiners will be forced to look for new suppliers of raw materials in Latin American and Middle Eastern countries, including Brazil and Iraq, after new President Donald Trump imposed tariffs on imports from Canada and Mexico. This view is expressed in an article published by Bloomberg.

It estimates that, due to Trump's tariffs, American refiners will have to deal with a sharp increase in oil prices from Canada and Mexico, which will force them to reorient themselves towards sourcing raw materials from other countries. The most likely suppliers could be Brazil and Guyana, given their relative proximity to the United States. At the same time, the agency, citing analysts' forecasts, notes that US energy companies may consider cooperation with Iraqi oil suppliers. Cooperation with Venezuelan counterparts remains an unlikely prospect due to sanctions imposed by Washington on that country.

According to Bloomberg, Trump's decision to impose tariffs "has put at risk the daily import of about 4.5 million barrels of oil produced by the United States' neighbors." The agency clarifies that the tariffs could change the path of energy supply chains, which will lead to an increase in the transportation times of raw materials and an increase in refining costs of $3-4 per barrel. In turn, Mexican oil companies may send surplus fuel for sale in Europe and Asia, and Canada is also likely to start looking for new buyers of oil abroad.

On February 1, Trump signed an executive order imposing tariffs on goods from Canada, China, and Mexico. According to the document, imports from Mexico and Canada will be subject to a 25% tariff (10% on Canadian energy resources). Goods from China will be subject to an additional 10% tariff. Canada, China, and Mexico account for a third of all goods and services imported by the United States. In 2023, the combined volume of exports from these three countries to the United States was nearly $1.5 trillion.