Tariff Announcements Spark Fears Of Global Economic Slowdown, North American Fuel Imports Remain Exempt

Look out below.

There’s a trading adage that fuel prices take the stairs up and the elevator down, and that’s exactly what we’re seeing this morning after the tariff announcements sparked fears of a global economic slowdown that will hamper fuel demand, while North American fuel imports seem to be exempted from the new rules meaning there will be no shortage of fuel supply.

During the first couple hours following the statement refined products were moving higher as it appeared that the new blanket 10% tariffs would apply to all imports, but as news leaked out overnight in typically sketchy form that fuels were not included the selling quickly accelerated.

As of 7:20 central time RBOB futures are touching their lows of the day just below $2.17, down more than 16 cents from yesterday’s settlement which just happened to be the highest since last fall. ULSD futures are down 14.5 cents while crude oil contracts are down around $4.95/barrel.

Keep in mind that we saw several weeks of money managers adding to bullish positions in energy contracts, and it appears we may be seeing a large amount of those speculative funds heading for the exits today which can create a snowball effect.

The fact that RBOB futures touched an 8 month high yesterday, and are now trading below last week’s low trade sets up a very bearish outside down reversal bar on the weekly chart that favors a run at sub $2 levels in the coming weeks.

ULSD futures are seeing a similar outside down weekly bar after coming within 1 penny of closing the gap on the chart left by the April contract roll a month ago, and are just 3.5 cents from their lows of the year.

The $2.14 range looks to be important support short term for both RBOB (200 day MA) and ULSD (2025 lows) that may be the difference in today’s sell-off being a short term anomaly or the start of a larger slide.

RINs continued their strong rally Wednesday, with D6 values trading at $.95 cents ahead of the tariff announcement, and bid at $.96 after. So far this morning the action has been volatile with early trades “down” to $.94 for D6’s only to see current bids at $.965. D4 RINs traded up to $1.03/RIN and were left bid there prior to the announcement. While oil and refined products are exempt from the tariffs, it’s not yet clear if renewables are impacted, which could create more swings in those fuel prices and their credits.

PBF announced it would begin the restart process for several units at its Martinez CA refinery that have been shut since early February due to a fire. The units attempting restart over the next two weeks were not directly impacted by the fire, while those that were aren’t expected to attempt restart until the end of the year. In the company’s notice, they offer detail on why the restart will require flaring to try and alleviate concerns in the surrounding community.

Meanwhile, the nearby community of Benicia voted to establish stronger oversight of refinery emissions from Valero’s refinery following pressure from citizen groups angry with the facility’s flaring.

Basis values across California remain elevated with numerous unplanned refinery upsets lingering across the state, adding to the loss of production capacity from converted and shuttered plants in recent years. PADD 5 refinery runs dropped again last week after plummeting the week prior, which is pushing inventory levels for gasoline in particular to levels we haven’t seen in many years.

More notes from the DOE’s weekly report below, see charts attached.

Crude built quite a bit with imports up substantially over the past two weeks and exports and refinery runs declining. Exports slid quite a bit but remain above average as they have most of the past couple years. Run rates in PADD 2 have begun to calm down, slipping below average after 3 straight weeks of declines off lofty Q1 throughput rates. Moves elsewhere were tame and overall run rates continue to hold above average.

Diesel stocks show a small overall build but larger changes in PADDs 1 & 3. PADD 1 dropped over 2mm barrels to hit its lowest 2025 value after running under the 5-year range for most of the year already. PADD 3 has also been running along the lower end of its range for most of the year but added almost 4mm barrels back last week, bouncing ahead of the previous two years and closer to average levels. January values came in for RD adding 896,000 barrels to the balance, chart comparison below.

The gas declines in PADDs 1, 2, & 5 offset the gain in PADD 3 for an overall drop of 1.5 million barrels. Overall gas stocks are ~4.6 million barrels over the seasonal average with all PADDs now holding above average inventories, except PADD 5. West coast stocks have been running at 5 year lows basically all year but last week’s drop puts them at a 10 year low for March readings.