Insignia Consultants | US refiners mull switch to alternative lighter crudes amid Trump tariff fears
US refiners mull switch to alternative lighter crudes amid Trump tariff fears
NEW YORK, Feb 20 (Reuters) - Top U.S. refiners are poised to seek alternative sources for heavy, sour crudes, including running more domestic grades, as they await clarity around U.S. President Donald Trump's threatened tariffs on imports from the nation's top crude suppliers Canada and Mexico, executives said.
Running more domestic crude, which is predominantly light, sweet shale oil, through U.S. refineries could be a win for Trump, who has vowed to boost the nation's energy production and championed the fossil fuel industry.
The tariffs, however, have generated concern among refiners, who are already watching profits slide from record highs in 2022 on softer demand, as they would now take a hit from higher feedstock costs. More than 70% of U.S. processing capacity is configured to run heavier grades, which are cheaper to import from Canada and Mexico.
Trump, who took office on January 20, plans to charge a 25% tariff on Mexican crude and a 10% levy on Canadian crude beginning in March, a delay from his original plan. Canada, the biggest oil supplier to the U.S., exports some 4 million barrels per day (bpd) of crude into the U.S., 70% of which is processed by Mid-Continent refiners.
