US refiners are putting investments on hold due to the ongoing global tariff war, which threatens to disrupt demand and possibly trigger a worldwide recession. The Trump administration’s new tariffs have sparked frustration in the industry, with refineries rallying around concerns that weaker global GDP growth will lead to lower oil prices and refining margins.
The pause in tariffs for 90 days, announced by the US government on Wednesday, has led to an increase in oil prices, with Brent crude up over 3% and WTI up nearly 3.4%. However, refiners are hesitant to invest in expanding domestic processing or reducing reliance on Canada and Mexico due to the complexities of processing light shale crude.
The industry’s concerns have been echoed by analysts, who predict that lower oil demand growth and weaker refining margins will result from the global tariff war. The pause in tariffs has also sparked optimism about a potential Federal Reserve rate cut as soon as May, with traders putting money on a 56% chance of an interest rate cut.
Notably, top US refiners such as Marathon Petroleum, Valero Energy, and Phillips 66 have lost billions in market capitalization since the April 2nd tariff announcement. The industry’s uncertainty is reflected in oil prices, which continue to fluctuate amid global economic uncertainty.
Source: https://oilprice.com/Latest-Energy-News/World-News