Analysts Examine What Tariff Decision Means for Oil

In a market update sent to Rigzone late Friday, Rystad Energy highlighted that the U.S. Supreme Court ruled that the International Emergency Economic Powers Act (IEEPA) does not grant the U.S. president the authority to impose tariffs.

Rystad outlined that this “outlaw[s]… all tariffs imposed under IEEPA since February 2025, the single largest component of the [Trump] administration’s tariff architecture”.

Rystad Chief Economist Claudio Galimberti warned in the update, however, that, “while the Supreme Court’s ruling invalidates a large share of existing tariffs and weakens the ability to target individual countries, it does not dismantle the broader tariff framework”.

“U.S. trading partners are not off the hook as the Trump administration fights back with a 10 percent global tariff, with the ability to increase it to 15 percent,” he added.

“If this upper limit is reached without previous IEEPA exemptions, the average tariff rate could climb even higher than under the structure that was just struck down by the Supreme Court,” Galimberti said.

“For EU nations and trading partners such as India and Canada, single, punitive rates are no longer an option for the Trump administration. The stick is now the same size for everyone, and it is a little smaller,” he noted.

Galimberti went on to state that renegotiation is back on the table, but added that “tariffs affecting imported steel products, including line pipe used for drilling oil and gas, remain in place”.

“The current result of the Supreme Court’s ruling is not a reversal of protectionism, but a narrower, more legally constrained U.S. tariff regime,” he said.

Rystad stated in the update that the actual impact on trade remains uncertain as the administration pivots to a new tariff regime under Section 122.

“Analysis from the Yale Budget Lab (YBL) suggests that if the new tariff were enforced at the upper limit of 15 percent without the previous IEEPA exemptions, the average effective tariff rate would climb to 24.1 percent – significantly higher than the 16.9 percent rate under the now-invalidated IEEPA structure,” Rystad added.

In a statement sent to Rigzone on Monday morning, Aaron Hill Chief Market Analyst at FP Markets, noted that the Brent oil price was holding around $71-72 per barrel and that WTI was near $66-67 per barrel, “with crude trapped between rising geopolitical premiums and softening demand signals”.

“Trade uncertainty from the White House’s proposed Section 122 tariffs is clouding global growth expectations, while Iran related tensions and Middle East supply risks are keeping a floor under prices – particularly for Brent, which remains more sensitive to international disruption narratives,” he added.

“At the same time, sticky inflation, slowing income growth, and cautious consumers in the U.S. temper the upside by questioning forward demand strength,” he continued.

“With central bank rhetoric, dollar direction, and OPEC/IEA guidance ahead, oil is poised for volatility, not trend conviction,” Hill warned.

In a comment posted on his Truth Social page on February 21, U.S. President Donald Trump called the U.S. Supreme Court tariff decision “anti-American” and stated that, “during the next short number of months, the Trump Administration will determine and issue the new and legally permissible Tariffs”, which he said “will continue our extraordinarily successful process of Making America Great Again”.

Brent gained 5.9 percent last week, Skandinaviska Enskilda Banken AB (SEB) Chief Commodities Analyst Bjarne Schieldrop pointed out in a SEB report sent to Rigzone today.  

“Brent crude traded in a range of $66.82-72.34 per barrel last week. It gained 5.9 percent and closed the week at a high note of $71.76 per barrel in fear that hostilities would break out over the weekend,” Schieldrop said in the report.

“They did not and Brent is down 0.5 percent this morning at $71.3 per barrel as a result,” he added.

To contact the author, email andreas.exarheas@rigzone.com