Oil prices have retreated lower than $80 per barrel in the global market after U.S President Donald Trump declared national emergency on energy.
The international benchmark Brent crude fell by 0.6 per cent. The US benchmark West Texas Intermediate (WTI) decreased by 0.8 per cent, reaching $75.34 per barrel, compared to its prior session close of $75.94.
Trump’s policies to boost US oil and gas production in line with his campaign promises have reinforced the perception that there will be no significant supply disruptions in global markets, thereby contributing to the downward pressure on oil prices.
Trump’s decision to revoke the executive order issued by former President Joe Biden, which banned oil and natural gas drilling in most US federal waters, is seen as a signal that Biden’s environmental regulations are being rolled back.
This reversal has eased supply concerns among market participants, contributing further price falls. Furthermore, the Trump administration’s consideration of imposing a 25 per cent tariff on oil imports from Canada and Mexico, along with the February 1 deadline for a 10% tariff on imports from China, is also supporting downward price movements.
The anticipation that these trade measures could drive up domestic oil prices in the US, the world’s largest oil consumer, is intensifying fears of a potential decline in oil demand, adding further downward pressure on prices.
On the other hand, forecasts of rising heating fuel demand due to cold weather in both Europe and the US are providing support to prices, preventing them from falling further.
Reports of severe winter conditions in the US are causing daily oil production in North Dakota to drop by between 130,000 and 160,000 barrels, fuelling supply concerns and exerting upward pressure on prices. The oil market’s attention is slowly turning away from US sanctions against Russia towards President Trump’s potential trade policy, ING commodities strategists said in a note.
The president has reiterated his threats to impose a 25% tariff on imports from Canada and Mexico, potentially by 1 February. Overnight, he also threatened 10% tariffs on China in retaliation to fentanyl flows from the country, which has kept some pressure on oil prices in early morning trading in Asia today.
Analysts said trade and tariff risks and the potential for retaliation are growing. The European natural gas market surged higher yesterday with TTF settling more than 4.5% higher on the day and above EUR50/MWh—the highest level since the first trading day of 2025.