Energy Futures Treading Water As Traders Await Tariff Announcements

Energy futures are treading water to start Wednesday as traders anxiously await multiple tariff announcements later in the day. While everyone is guessing what will and won’t be included, it seems like there’s a good chance the plans still aren’t even finalized which will just continue piling on to the confusion in numerous markets.

The New England market is the most directly impacted refined product market in the U.S. as Irving Oil’s New Brunswick refinery is the primary supplier to several terminals in the region and the largest importer in several states. So far rack prices haven’t jumped like they did in February and March as it appears the USMCA tariff shelter is still holding for those fuel imports (through today at least) but that hasn’t stopped several suppliers in the area from tightening down allocations in case today’s announcement ends that protection.

RIN values saw another strong rally Tuesday, pushing to a new 18 month high as leaders from both the oil and ag industries met in Washington to try and hash out a deal on the Renewable Fuel Standard targets. D6 RINs traded north of $.91/RIN on the day while D4s were hovering around $.99.

The big rally in D4 RINs has now effectively offset the impact of the BTC to CFPC subsidy change for domestic producers of Renewable Diesel with some feedstocks now advantaged to where they were a year ago on total government payments for the fuel. (See table below) While that’s certainly good news for many producers, don’t expect a sudden flood of renewable supply as imported barrels still don’t get any credit under the new program, and SAF is still heavily favored, meaning those with the capacity to choose will still want to produce more aviation fuel than on-road fuel. There’s also the inconvenient fact that most of these companies were losing money in 2024, so simply getting back to those levels on total credit values likely isn’t enough to spur new production.

So much for the friendly oil cartel: Reports this week that Russia is ordering reductions in oil flows through the Caspian pipeline consortium, which some believe is an attempt to force Kazakhstan to adhere to the cartel’s quotas, while others see it as a response to threats to impose tariffs on any country that buys Russian oil if it doesn’t agree to a cease fire in Ukraine.