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By Robert Harvey and Georgina McCartney
London/Houston.
Trump ordered 25% of tariffs on Canadian and Mexican imports on Saturday and 10% of China’s assets that begin on Tuesday to address a national emergency for fentanyl and illegal foreigners who enter the United States, said officials of the White House. Canada’s energy products will have only a 10% duty, but Mexican energy imports will be charged total 25%, they said.
Tariffs on the two most important sources of American crude imports will increase costs for raw degrees heavier than US refineries need for optimal production, industry sources said, reducing their profitability and potentially forcing production cuts.
That provides refiners in other markets with the opportunity to compensate for the difference. The United States is currently an exporter of diesel and gasoline importer.
“Less US diesel exports. UU. They would support European margins, while more export opportunities can remain in the strongly pressed gasoline market,” said the chief economist of the vortex consultant David Wech.
“In general, it is positive for European refiners, but probably not for European consumers,” he added.
“European margins can improve because the northeast of the United States will have to import more gasoline,” said a broker. “I think European and Asian refiners are the great winners.”
Tariffs would also probably impact raw vendors to discount prices to find buyers, said Matias Togni, founder of the next barrel analysis firm. Asian refineries are well prepared to absorb that Mexican and Canadian crude with a discount, something that could also boost their profit margins, he said.
Asian refineries could obtain the competitive advantage because they have the equipment to run heavy raw and are also in the midst of raising their execution rates, said Randy Hamburun, head of refining in energy aspects.
The expansion of the Trans Mountain pipe (TMX) in Canada, which was launched last May, means that the pipe can now send 590,000 additional barrels per day to the Canadian Pacific coast.
TMX’s highest shipments to China could replace imports from Venezuela and Saudi Arabia, commercial sources said.
Asia-Pacific refiners could also exploit fuel arbitration opportunities to the west coast of the United States, which could be affected by higher costs of raw material incurred by obtaining the crude oil from beyond, added Wech of Vortexa.
