WTI rises to near $73.00 due to rising supply concerns following Trump's tariff threats

• WTI price gains ground due to potential supply disruptions following Trump's tariff threats.
• Trump stated to plan on Thursday evening on the 25% tariff on Canadian Oil, but no updates have emerged.
• Traders await the OPEC+ meeting on February 3, as Trump pressures the group, particularly Saudi Arabia, to reduce oil prices.

West Texas Intermediate (WTI) crude Oil price appreciates after two days of losses, trading around $73.00 during Asian market hours on Friday. The rise in crude Oil prices comes amid concerns over potential supply disruptions as markets assess the risk of a 25% tariff imposed by US President Donald Trump on Mexico and Canada--the two largest crude exporters to the United States (US). These tariffs, which could take effect on February 1, are intended to pressure both countries to halt fentanyl shipments across US borders.

However, it remains uncertain whether crude Oil will be included in the tariffs. On Thursday afternoon, Trump stated that he would likely make a decision that evening on whether to apply the 25% tariff to Canadian Oil, but no further updates have emerged. In 2023, Canada supplied 3.9 million barrels per day (bpd) of crude to the US, accounting for a significant portion of the 6.5 million bpd total imports, while Mexico contributed 733,000 bpd, according to data from the US Energy Information Administration. Trump also indicated that China, the world's largest oil importer, would face tariffs, with his administration actively working on their implementation.

"Sanctions on Russia, stopping purchases of Venezuelan Oil, and applying maximum pressure on Iran will elevate the geopolitical risk premium on Oil," said ANZ Bank analyst Daniel Hynes. "This could be further impacted by efforts to refill the strategic petroleum reserve, adding to Oil demand."

Meanwhile, investors are looking ahead to the OPEC+ meeting on February 3, as Trump urges the group--particularly Saudi Arabia--to lower Oil prices. Market participants expect OPEC+ to maintain its current supply policy, with any additional production increases likely to begin in April. Kazakhstan's energy minister stated on Wednesday that the group will discuss Trump's plans to boost US oil production and take a unified stance on the matter during next week's meeting.