Trump’s Oil Tariffs A Boost For European And Asian Refiners

By Robert Harvey and Georgina McCartney

LONDON/HOUSTON, Feb 1 (Reuters) – U.S. President Donald Trump’s trade tariffs on Canadian and Mexican oil imports will offer European and Asian refineries a competitive advantage against their U.S. rivals, analysts and market participants told Reuters.

Trump on Saturday ordered 25% tariffs on Canadian and Mexican imports and 10% on goods from China starting on Tuesday to address a national emergency over fentanyl and illegal aliens entering the U.S., White House officials said. Energy products from Canada will have only a 10% duty, but Mexican energy imports will be charged the full 25%, they said.

The tariffs on the two biggest sources of U.S. crude imports will raise costs for the heavier crude grades U.S. refineries need for optimum production, industry sources said, cutting their profitability and potentially forcing production cuts.

That provides refiners in other markets an opportunity to make up the difference. The U.S. is currently an exporter of diesel and importer of gasoline.

“Less U.S. diesel exports would support European margins, while more export opportunities may remain in the strongly pressured gasoline market,” consultancy Vortexa’s chief economist David Wech said.

“So overall a positive for European refiners, but lik…