Published by Global Banking & Finance Review®
Posted on January 28, 2025
3 min readLast updated: January 27, 2026
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Oil prices rise from multi-week lows as Trump plans tariffs on Canada and Mexico, affecting global markets. Libya's oil supply concerns ease, while China's manufacturing contraction pressures demand.
By Nicole Jao
NEW YORK (Reuters) -Oil prices settled up on Tuesday, bouncing back from multi-week lows, after the White House said U.S. President Donald Trump's plans to issue tariffs on Canadian and Mexican imports this week still holds.
Fears of weaker demand linked to soft economic data from China and rising temperatures elsewhere capped the gains.
Brent crude oil futures settled up 41 cents, or 0.53%, at $77.49 per barrel. U.S. West Texas Intermediate crude futures were up 60 cents, or 0.82%, at $73.77.
Brent settled on Monday at its lowest since Jan. 9, while WTI hit its lowest since Jan. 2.
The White House said Trump still plans to issue 25% tariffs on Canada and Mexico on Saturday while weighing fresh tariffs on China.
"Trump's comments on tariffs kept the market on edge," said Phil Flynn, analyst at Price Futures Group. The tariffs could disrupt the flow of energy products across the U.S. borders with Canada and Mexico.
In Libya, local protesters prevented crude oil loadings on Tuesday at Es Sider and Ras Lanuf ports, putting about 450,000 barrels per day of exports at risk.
However, fears of supply disruption eased after Libya's state-run National Oil Corp said export activity was running normally after it held talks with protesters.
"The market priced in the risk of Libyan oil supply disruption before it became clear that flows for now are not disrupted, with the risk premium evaporating again," UBS commodities analyst Giovanni Staunovo said.
"There remains a risk of new disruptions down the road," he added.
In China, the world's largest crude oil importer, reported on Monday an unexpected contraction in January manufacturing activity, pressuring oil prices.
"The general tone of caution in the risk environment, coupled with weaker Chinese PMI numbers that cast further doubt on China's oil demand outlook, may serve as a drag on oil prices," IG analyst Yeap Jun Rong said.
China's crude oil demand is also expected to be hit by the latest U.S. sanctions on Russian oil trade.
FGE analysts see refineries in Shandong losing up to 1 million barrels per day of crude supply in the near term amid a ban imposed by the Shandong Port Group on U.S.-sanctioned tankers.
Several independent refineries in China have halted operations, or plan to do so, for indefinite maintenance periods, sources told Reuters, as new Chinese tariff and tax policies plunge plants deeper into losses.
In the U.S., weather forecasts are for warmer-than-normal temperatures through this week, which are also weighing on demand for heating fuels after extreme cold sparked a natural gas and diesel rally in prior sessions.
Oil markets remain jittery, and it will be some time before there is clarity on the ramifications of U.S. policy involving tariffs and sanctions, said Ashley Kelty, an analyst at Panmure Liberum.
(Reporting by Nicole Jao and Shariq Khan in New York, Gabrielle Ng in Singapore and Arunima Kumar in Bengaluru; Additional reporting by Paul Carsten; Editing by Jason Neely, Mark Potter, Jan Harvey, Nia Williams and David Gregorio)
Oil prices rebounded after the White House announced that President Trump plans to issue tariffs on Canadian and Mexican imports, which kept the market on edge.
Local protesters in Libya prevented crude oil loadings at Es Sider and Ras Lanuf ports, putting about 450,000 barrels per day of exports at risk, although fears eased when the National Oil Corp reported normal export activity.
China reported an unexpected contraction in January manufacturing activity, which pressured oil prices and raised concerns about the country's oil demand outlook.
The latest U.S. sanctions on Russian oil trade are expected to negatively impact China's crude oil demand, with analysts predicting significant losses in crude supply for refineries in Shandong.
Warmer-than-normal temperatures in the U.S. are weighing on demand for heating fuels, following a period of extreme cold that had previously driven up natural gas and diesel prices.
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