AMERICAS OIL: Trump Sanction Announcements Sparks Gasoline Volatility

US gasoline cracks have been volatile following an announcement by Trump that delayed tariffs on Canada and Mexico will go ahead from March 4.

• US gasoline crack down 0$/bbl at 23.31$/bbl
• RBOB MAR 25 up 1.3% at 1.98$/gal
• The US gasoline crack was at a low of $23.015/b before the announcement from Trump via Truth social, causing the crack to spike to a high of $23.438/b. This has since struggled for direction and is now edging back into losses on day.
• The tariffs on Canadian crude could impact refiners in PADD 2 who rely on those grades for refinery feedstocks.
• The extent of the price impact depends on how much crude Canada can divert to other markets, such as via TMX to Asia.
• Any fall in flows to PADD 2 would need to be replaced with other, potentially more expensive grades, such as WTI, impacting cracks.
• Existing infrastructure means the amount of light crude from other regions it can receive is limited, Kpler said.
• Meanwhile, the USGC could be affected by tariffs on Mexican heavy sours used to make gasoline.
• The squeeze on replacement heavy sour supply is also going to be further aggravated by the withdrawal of Chevron’s license to operate and import barrels from Venezuela.