How Donald Trump's Tariff Threat is Putting Pressure on Oil Prices

With U.S. President Donald Trump applying pressure on OPEC and intensifying trade disputes with major partners such as Colombia, oil prices remain under strain. Crude markets opened lower after Trump reiterated his demand for the Organisation of the Petroleum Exporting Countries (OPEC) to lower oil prices. By 0043 GMT, Brent crude futures had declined by 1.11% to $77.63 per barrel, while U.S. West Texas Intermediate (WTI) crude dropped 1.19% to $73.77 per barrel, according to Reuters.

Trump's Push for OPEC to Lower Oil Prices

Trump has persistently urged OPEC to bring down prices, arguing that it could weaken Russia financially and accelerate an end to the Ukraine conflict. "One way to stop it quickly is for OPEC to stop making so much money and drop the price of oil. That war will stop right away," Trump stated on Friday. He also hinted at potential sanctions and tariffs against Russia and other nations if OPEC fails to take action.

Although OPEC+ has yet to issue an official response, insiders have pointed to their existing strategy to increase oil production starting in April. Analysts at Goldman Sachs indicated that, despite sanctions on Russian crude, a significant decline in production is unlikely, as discounted Russian oil remains attractive to cost-conscious buyers. However, JP Morgan analysts cautioned that risks associated with sanctions persist, especially given that nearly 20% of the global Aframax tanker fleet is facing restrictions.

Trump's New Tariff Threat Intensifies Market Pressure

Further weighing on oil prices, Trump’s latest tariff threats were aimed at Colombia, the fourth-largest overseas oil supplier to the U.S. In response to a diplomatic standoff over Colombia’s refusal to permit U.S. planes carrying deported migrants to land, Trump announced broad retaliatory measures. These included an initial 25% tariff on Colombian goods, with a potential escalation to 50% within a week.

The U.S. remains Colombia’s largest buyer of seaborne crude, importing 183,000 barrels per day (bpd) in 2024—accounting for 41% of Colombia's total crude exports—according to Reuters data from analytics firm Kpler.

Temporary Halt on Colombian Sanctions, but Oil Market Remains Volatile

Later in the day, Bloomberg reported that the White House had put the sanctions on hold after Colombia agreed to Trump’s terms, including the unrestricted acceptance of deportees. Despite this temporary resolution, oil prices remained unstable, with Brent crude trading at $78.01 per barrel and WTI exceeding $74 in the morning trading session in Singapore.

As Trump’s aggressive trade and energy policies continue to reshape global supply chains, oil markets are grappling with increasing uncertainty. Factors such as sanctions on Russian crude, evolving trade tensions, and OPEC’s measured approach are contributing to sustained downward pressure on oil prices for the time being.