Crude oil jumps, Asia petrochemical shares fall as Trump starts trade war
Nurluqman Suratman
03-Feb-2025
SINGAPORE (ICIS)–Oil prices surged, while shares of petrochemical firms in Asia tumbled on Monday after US President Donald Trump imposed tariffs on China, Canada and Mexico.
Trump signed on 1 February executive orders on the tariffs, firing the first shots of a potential new trade war, just days into his presidency.
US crude rose by more than $1/barrel amid fears of a disruption in crude supply from two of the US’ largest suppliers – Canada and Mexico.
Product | Latest | Previous | Change |
Brent April | 76.30 | 75.67 | 0.63 |
WTI March | 73.87 | 72.53 | 1.34 |
Canada and Mexico supply around a quarter of the crude oil processed by US refiners, primarily for production of fuels such as gasoline and heating oil, according to the US Department of Energy.
Effective 4 February, the US will apply a 25% duty on goods from the two countries, while a 10% levy applies on Chinese goods.
Energy products from Canada will be hit with a 10% duty, but Mexican energy imports will be charged the full 25%.
Canada and Mexico announced their own plans for retaliatory tariffs on the US.
China’s Ministry of Commerce said on 2 February that it will file a complaint against the US at the World Trade Organization (WTO), as well as take necessary countermeasures to safeguard its interest.
Markets in China remain closed on 3-4 February for the Lunar New Year holidays and will re-open on 5 February.
Trade war jitters sent bourses in Asia tumbling along with shares of petrochemical firms on Monday.
At 01:30 GMT, Japan’s Mitsui Chemicals and Asahi Kasei was down 2.11% and 2.08% in Tokyo, respectively, while South Korean producer LG Chemfell by 5.05% in Seoul.
Japan’s benchmark Nikkei 225 index was 2.24% lower at 38,686.96 while South Korea’s KOSPI fell by 2.80% at 2,446.46.
Thumbnail image: At Qingdao port in Shandong province, China on 29 January 2025. (Costfoto/NurPhoto/Shutterstock)
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