How Trump's trade threats against Canada and Mexico affect oil prices.

As reported by Ukrinform, this information comes from Reuters.

Brent crude oil futures decreased by 7 cents, or 0.1%, reaching $76.51 per barrel. U.S. oil futures fell by 2 cents, or 0.03%, to $72.64. On Wednesday, U.S. oil futures hit their lowest price of the year.

Trump still intends to fulfill his promise to impose tariffs on Canada and Mexico on Saturday, White House spokesperson Caroline Leavitt told reporters on Tuesday.

Trump's nominee for Secretary of Commerce, Howard Lutnik, stated on Wednesday that Canada and Mexico could avoid tariffs if they promptly close their borders to fentanyl, while also promising to slow China's progress in artificial intelligence.

Last week, U.S. crude oil inventories rose by 3.46 million barrels, which is roughly in line with analysts' expectations of 3.19 million barrels.

On the supply side, exports of crude oil from Russia's western ports are set to decline by 8% in February compared to January's plan, as Moscow increases refining, according to traders and calculations from Reuters, following recent U.S. sanctions that reduced crude oil exports.

Investors are also anticipating a meeting of the Organization of the Petroleum Exporting Countries and its allies, scheduled for February 3.

The group of leading oil producers, OPEC+, is set to discuss Trump's efforts to boost oil production in the U.S. and to take a unified stance on the matter.

Trump has publicly urged OPEC and its leading member Saudi Arabia to lower oil prices, stating that this would put an end to the conflict in Ukraine. He has also devised a plan to maximize oil and gas production in the U.S.

However, analysts believe that a price war between the U.S. and OPEC+ is unlikely, as it could harm both parties.

“A price war with the U.S. would lead OPEC+ producers to maximize their output to lower prices, resulting in a decline in shale production,” noted analysts from BMI, a division of Fitch Group.

They predict that Brent oil prices could fall below $50 as OPEC+ may unleash over 5 million barrels of oil per day from its spare capacity, leading to a reduction in U.S. shale oil production along with prices.