The proposed 10% tariff on oil in the United States will severely impact foreign producers. Goldman Sachs estimates annual losses could reach up to $100 billion.

Goldman Sachs Group said on Friday that the proposed 10% tariff on oil imports in the United States could result in foreign producers losing $10 billion annually. Due to the scarcity of alternative buyers and inadequate processing capacity, Canada and Latin America still rely on American refiners for heavy crude oil. President Trump plans to impose a 25% tariff on Mexican crude oil and a 10% tariff on Canadian crude oil starting from March, which is a delay from the initial proposal. Nevertheless, Goldman Sachs predicts that the United States will still be the main destination for heavy crude oil, as its advanced refining capabilities and low-cost advantages continue to solidify the competitiveness of American refiners. The investment bank estimates that in order to make medium crude oil from the Middle East more attractive to Asian refiners, the price of light oil needs to increase by 50 cents per barrel. Currently, Gulf Coast refiners in the United States prioritize purchasing domestic light crude oil over importing medium grade oil. Goldman Sachs predicts that American consumers will face $22 billion in tariff costs annually, while the government will receive $20 billion in tax revenues. Meanwhile, refiners and traders may generate $12 billion in earnings by blending discounted American light crude oil with imported heavy crude oil for sale in high-priced coastal markets. The report notes that Canada, as the largest oil exporting country to the United States, is expected to maintain its pipeline oil transportation volume of 3.8 million barrels per day, offsetting the impact of tariffs through price discounts. Similarly, imports of heavy crude oil by sea from Canada, Mexico, Venezuela, and other Latin American countries amounting to 1.2 million barrels per day are expected to be maintained through discounts. Although tariffs may reshape trade flows, Goldman Sachs emphasizes that Canadian producers, as "captive sellers," will be forced to absorb most of the tariff costs through price discounts in order to maintain competitiveness in the American market.