US President Trump’s 10% tariff on Canadian oil goes into effect today, March 4, 2025. Let’s break down what you need to know.
Supply chain impact
- The oil market is incredibly complex, with infrastructure developed over decades to optimize efficiency. The network that currently serves refineries across the Midwest, Great Lakes, and Rockies regions was specifically designed and optimized to process heavy sour crude from Canada.
- US refineries can’t simply switch from processing Canadian to American crude oil due to specialized equipment, infrastructure, and pipeline configuration.
- The real-world impact of tariffs won’t be to shift refining patterns. Instead, it will be to add costs throughout the system. These costs will make their way to consumers in the form of higher prices for gasoline, diesel, and other petroleum products.
At the pump for consumers
- Some US regions will see price impacts immediately, while others will take two to three weeks.
- Fuel prices will rise in varying amounts across different US regions, with the Northeast expected to see the most significant increase at approximately 20 to 40 cents per gallon. For a typical 15-gallon fill-up, that equates to an additional $3 to $6 every time you visit the pump.
- Impacts across the Midwest, Great Lakes, and Rockies regions would take longer to materialize since crude oil must first be refined into fuel products. These regions could expect gasoline and diesel prices to rise by 5 to 25 cents per gallon once refiners have worked through their pre-tariff oil supplies.
- At this time, there would be negligible impact to other regions of the US, which are less reliant on Canadian crude oil.
To learn more and watch Patrick’s latest video, visit the GasBuddy blog.
Patrick De Haan, Head of Petroleum Analysis at GasBuddy, A PDI Company, has been called one of the nation’s most accurate fuel forecasters by leading news media. He’s been analyzing fuel prices and trends for more than fifteen years. Patrick has provided expertise to authorities during major weather events and other disruptions and is regularly cited in digital and broadcast media for his knowledge on various topics including oil, fuel prices, motor fuel taxation, pipelines, and retail stations.