Oil market extended losses as the US announced energy emergency plans
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.
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