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Oil prices continued their downward trend on Tuesday, January 21, after US President Donald Trump declared a national energy emergency on his first day in office. The announcement fuelled concerns about a potential surge in US crude production, intensifying fears of an oversupplied market in 2025.

Brent crude dropped by 86 cents to settle at $79.29/barrel.

WTI resumed trading following a holiday in the previous session, closing at $75,89/barrel.

The energy emergency declaration forms part of a broader strategy aimed at lowering consumer energy costs and bolstering national security by increasing domestic production and supporting allied nations. However, the move has stoked apprehensions about a crude surplus, especially in the context of sluggish global economic activity and the ongoing energy transition in major oil-consuming nations like the United States and China.

To counteract the decline in prices, the administration has floated the possibility of imposing a 25% tariff on oil imports from Canada and Mexico. 

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Written by: Muhammad Hafiz