Goldman Sachs: Trump's tariffs will have a limited impact on oil and gas prices

Goldman Sachs stated in a Sunday note that the new tariffs placed by U.S. president Donald Trump on imports coming from Canada, Mexico and China will likely have a limited impact on oil and gas prices globally.

The bank stated that the potential tariff-driven decrease in U.S. Natural Gas imports from Canada was too small to have a significant impact on U.S. Natural Gas prices.

Prices of oil and gas jumped Monday following Trump's tariffs.

Tariffs will be implemented on February 4, including a 25% tax on goods imported from Mexico and Canada. A 10% tax on Canadian energy imports and a 10% duty on Chinese imports are also included.

The bank stated that "Canadian oil companies are expected to ultimately bear the majority of the tariff burden with a $3-$4 barrel discount wider than normal on Canadian crude due to limited export markets. U.S. refined product consumers will be responsible for the remaining $2-$3 barrel burden," it said.

The note states that seaborne oil imports will be rerouted from Canada and Mexico to other markets. In turn, the U.S. will replace these supplies with crude oil from OPEC and Latin America and refined products imported from Europe.

The investment bank maintained its oil price forecasts for 2025/2026, predicting minimal price impacts due to stable oil production and demand globally, as well the Canadian oil tariff, which is already priced in.

Goldman Sachs has raised its Brent oil forecasts for this year to $73 from $71, and also for 2026.

Trump said that he would speak with the leaders of Canada and Mexico who have announced their own retaliatory duties, but downplayed hopes that they would be able to change his mind.

Goldman Sachs analysts also said that the U.S. Tariffs against Mexico and Canada would be temporary.

(source: Reuters)