Market News

(Bloomberg) -- Oil slid as US President Donald Trump promised to boost US crude production while holding off on tariffs that could have restricted supplies and hurt demand.

Brent crude retreated more than 1% to near $80 a barrel. Trump won’t unveil tariffs against China, Canada or Mexico on his first day in office and will instead call for federal agencies to study policies and the US’s trade relationships with those nations.

Traders had been monitoring the risk of disruption to Canadian supplies — the largest source of US imports — after Trump previously signaled to Alberta’s premier that oil wouldn’t be exempted in any tariffs. Wider markets found some support from the lack of measures.

Still, Trump said he will unleash a barrage of executive orders on his first day, including invoking emergency powers in the hours after he’s sworn in as part of his plan to unleash domestic energy production.

“We will drill, baby drill,” he said in his inauguration speech.

Crude has rallied at the start of the year after frigid weather in the Northern Hemisphere drove up heating demand and broader US sanctions on Russia’s oil industry left customers in Asia seeking alternative supplies. A fresh bout of cold weather in the US was disrupting supplies on Monday.

The additional sanctions on Russia have upended tanker markets and are forcing Chinese refiners to purchase barrels from Europe, although speculators are wagering that a bumper rally in Middle Eastern oil markets that followed the announcement of sanctions will soon slow.

Scott Bessent, Trump’s nominee for Treasury secretary, said last week he would support dialing up measures targeting Russia’s oil industry, which would likely mean even more disruption. The President’s pick for national security adviser has previously vowed “maximum pressure” on Iran.