Oil Gets Driven to Monthly Loss as Tariff Risks Batter Sentiment

(Bloomberg) -- Oil headed for a solid monthly loss as US President Donald Trump escalated tariff threats against major trading partners, hurting appetite for risk, boosting the dollar, and clouding the outlook for energy demand.

Global benchmark Brent traded below $74 a barrel, down by about 4% this month, while West Texas Intermediate traded near $70. Trump affirmed plans for curbs on imports from Canada and Mexico from March 4, including a possible 10% levy on Canadian energy products. He also threatened to double an existing tariff on imports from China, the world’s largest crude importer.

The impact on crude from the potential levies is complex. The US relies heavily on oil imports from Canada and Mexico to feed its refineries, and a tariff could raise crude costs. At the same time, higher charges on all other goods pose a risk to economic growth, consumer confidence, and energy consumption.

Brent crude and its US counterpart remain on track for their steepest monthly falls since September, with WTI set for a run of six consecutive weekly losses. Prices have been dragged down by persistent anxiety over the fallout from US trade policy, as well poor economic data. On the supply side, pipeline exports from Iraq’s Kurdistan region may be restarted, although OPEC+ is widely seen as likely to defer a production increase.

“Tariffs are back in the cross-hairs,” said Chris Weston, head of research at Pepperstone Group. “A market that had reduced its sensitivity to recent tariff headlines has had to reconsider that reaction function.”

A gauge of the US currency held steady after surging by 0.6% on Thursday, the biggest one-day gain this year. That makes commodities priced in the greenback less attractive for some overseas buyers.

On Ukraine, Trump said that negotiations on a deal regarding the war were “very well advanced” although nothing conclusive was yet reached. He said the US would be a major partner in developing Ukraine’s commodities extraction including oil and gas, as well as minerals and rare earths. 

©2025 Bloomberg L.P.