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Investing.com--Oil prices fell Tuesday, retreating from the previous session's surge, after US President Donald Trump announced a one-month delay on newly imposed tariffs on imports from Canada and Mexico.

At 08:25 ET (13:25 GMT), Brent Oil Futures fell 1.6% to $74.78 a barrel, and Crude Oil WTI Futures expiring in March dropped 2.5% to $71.33 a barrel.

Oil reverses track as Trump delays Canada, Mexico tariffs

Oil prices had surged at the start of the week after President Trump announced a 25% tariff on imports from Canada and Mexico, alongside a 10% levy on energy products from Canada and a 10% tariff on Chinese goods, effective February 4.

However, following discussions with Canadian and Mexican counterparts, Trump agreed to postpone the tariffs on Mexico and Canada by 30 days.

The tariffs on Chinese imports were maintained, however, with Beijing retaliating, slapping a 15% tariff on coal and liquified natural gas imports from the US, and an additional 10% duty on crude oil, agricultural equipment and automobiles from February 10.

The US imports approximately 4 million barrels of Canadian oil and nearly 500,000 barrels of Mexican oil daily. The tariffs were expected to increase costs for US refiners, especially those in the Midwest and Gulf Coast regions, potentially leading to higher fuel prices and potential production cuts.

"Clearly, with still plenty of uncertainty over trade it would be wise for Canada to start investing in further pipeline capacity from its producing regions to its east and west coasts," said analysts at ING, in a note.

"It would take several years to build this infrastructure, but it would provide Canadian producers more flexibility and the potential for more destinations for Canadian oil. At the moment, given that the bulk of pipeline infrastructure is directed towards the US, Canada is left vulnerable to trade frictions."

OPEC+ still plans to raise production from April

Despite the tariff announcements, the Organization of the Petroleum Exporting Countries and its allies (OPEC+) have maintained their current oil production plans, resisting calls from Trump to lower prices.

This decision underscores the group's commitment to a gradual phase-out of production cuts, set to begin on April 1, contingent on low inventories and rising global demand.

The OPEC+ cartel has been cutting output by 5.85 million barrels per day, equal to about 5.7% of global supply, as agreed in a series of steps since 2022.

"This suggests that the group is likely to go ahead with the unwinding of their additional voluntary supply cuts from April. The group is scheduled to bring back around 2.2m b/d of supply over an 18-month period starting in April. Obviously, the return of this supply will still be dependent on market conditions. The next JMMC meeting will be held on 5 April," ING added.

(Ayushman Ojha contributed to this article.)