08:58 AM EST, 02/04/2025 (MT Newswires) -- Oil prices weakened early on Tuesday as China retaliated for a 10% tariff imposed on its imports into the United States, a day after Donald Trump's threats to impose levies on Canada and Mexico's exports to the country were postponed for 30 days.

West Texas Intermediate crude oil for March delivery was last seen down US$1.92 to US$71.24 per barrel, while April Brent crude was down US$1.26 to US$74.70.

Prices initially jumped on Monday as the Trump Administration promised to impose 25% tariffs on imports from Canada and Mexico beginning on Tuesday, with a 10% levy on energy imports from Canada, which supplies 20% of U.S. oil demand. Trump on Monday agreed to postpone the measures on both countries for 30 days in exchange for heightened border security measures.

"Crude oil initially surged on concerns over Canadian supply but quickly reversed lower after a one-month tariff delay and escalating trade tensions between the US and China - both major energy consumers. This underscores the market's sensitivity to policy shifts and demand uncertainty," Saxo Bank wrote.

Still, the U.S. administration went ahead with 10% tariffs for imports from China, with China retaliating with targeted tariffs of up to 15% and export controls on strategic materials, including tungsten and tellurium.

"While we expect the market to continue reacting positively to the North American developments, it will be interesting to gauge sentiment as the market parses potential impacts from Asia (as well as any negotiations that may occur over the coming days)," Tudor, Pickering, Holt analyst Jake Roberts noted.

OPEC+ on Monday held a ministerial meeting that ended with an agreement to stick with its plans to begin returning 2.2-million barrels per day of voluntary production cuts by increasing supply by 122,000 bpd monthly beginning in April, while keeping other quota cuts in place through next year despite Donald Trump's demands the group raise output to lower oil prices.

"OPEC decided to stick to its guns and keep the output quotas in place until the end of 2026 and gradually unwind the 2.2 mbpd of voluntary constraints from April, this year. Don't hold your breath until Donald Trump is content with the OPEC+ strategy but should the export tariffs on Canadian and Mexican oil be re-introduced further down the line and prices strengthen again, the tapering might just take place. In case of a price drop and another delay in easing output restrictions, Mr Trump's patience will be severely tested," PVM Oil Associates noted.