WASHINGTON, Jan 31 (Reuters) - U.S. President Donald

Trump said on Friday he expects his administration to impose

tariffs related to oil and gas around Feb. 18 and it could

reduce the planned levy on some Canadian crude.

The U.S. imports some 4 million barrels per day of oil

from Canada, roughly 70% of which is processed by refiners in

the U.S. Midwest. A tariff on oil imports could lead to lower

production of fuel at those facilities and drive up costs for

consumers, analysts and companies have warned.

Trump did not name a specific country to which the new

tariffs would apply or provide any more details about the plans.

"We're going to put tariffs on oil and gas," Trump told

reporters in the White House's Oval Office. "That'll happen

fairly soon, I think around the 18th of February."

Asked if tomorrow's tariffs would include Canadian

crude, Trump said: "I'm probably going to reduce the tariff a

little bit on that. We think we're going to bring it down to 10%

for the oil."

That would be instead of 25% that Trump has previously

spoken about.

Many U.S. oil refiners, especially in the Midwest, rely

on imported crude because their facilities are configured to run

heavier crude grades, such as those from Mexico and Canada.

They are awaiting clarity while preparing for the new

tariffs on Canadian and Mexican crude imports. Earlier this

month, imports of crude from Canada to the United States

hit record levels

.

U.S. refiner Phillips 66 expects production cuts

in the Midwest and Rocky Mountain region where alternative crude

supplies are limited if tariffs take effect.

Phillips 66, along with HF Sinclair and Par Pacific

Holdings ( PARR ) have elevated exposure to Canadian crude, data

from TD Cowen shows.

"Our commercial and optimization teams have been working

hard to develop every possible scenario we can think of and how

we would respond" to Trump's tariffs, said Gary Simmons, chief

operating officer of Valero, during call with analysts on

Thursday.

Valero is the second-largest U.S. refiner by capacity.