Oil prices appreciated on Thursday amid plans to slam tariffs on Canadian and Mexican crude imports by the United States, possibly from this weekend.
Brent crude futures gained 29 cents or 0.4 per cent to trade at $76.87 a barrel and the US crude futures rose by 11 cents or 0.2 per cent to $72.73 a barrel.
US President Donald Trump has threatened to impose a 25 per cent tariff as early as Saturday on Canadian and Mexican exports to his country if those two countries do not end shipments of fentanyl across its borders.
The White House on Tuesday reaffirmed Mr Trump’s plan to impose the tariffs.
Also, on Wednesday, the president’s nominee to run the Commerce Department said the two countries could avoid this if they act swiftly to close their borders to fentanyl.
Market analysts noted that prices rose because traders already priced in tariffs.
On the supply side, the latest US sanctions on Russia are squeezing crude oil exports from Russia’s western ports, which are set to fall 8 per cent in February from the January plan as the country boosts refining.
Investors are also looking ahead to a meeting by the Organisation of the Petroleum Exporting Countries and its allies including Russia, together called OPEC+, scheduled for Monday, February 3.
Russia has been reducing supply as part of the OPEC+ deal to tackle the oversupply on the market.
Russia, alongside OPEC+ members Kazakhstan and , Iraq, still have work to do to compensate for the lack of compliance with the OPEC+ quotas from previous years and months.
The Kazakhstan government said the 22-member alliance is set to discuss Mr Trump’s efforts to raise US oil production and take a joint stance on the matter.
Mr Trump has called on OPEC and its leading member, Saudi Arabia, to lower oil prices, saying doing so would end the conflict in Ukraine.
He has also set up an agenda of maximizing oil and gas output in the U.S., already the world’s largest producer and at record highs.
However, analysts believe a price war between the US and OPEC+ is unlikely as it may hurt both.