President Donald Trump's plan to place tariffs on all Mexican goods could hurt U.S. refiners and push crude prices higher, ESAI Energy said in a June 3 note.

If the United States and Mexico do not reach an agreement on immigration policy, the approximately 630,000 barrels per day of imported crude from Mexico will be subject to a 5% tariff until July 1, when it will increase to 10%. Eventually, it will rise to 25% in October. Boston-based ESAI said the sanctions on Venezuela and Iran have made it a seller's market for crude, giving Mexico options to send its production elsewhere.

"With the current price of Maya [crude oil] around $63 per barrel, a 5 percent tariff will raise the price by more than $3 per barrel. This is more than the shipping cost to Asia, which means Mexico would sell barrels on to Asian buyers, especially China and India, rather than pay any of the cost of the tariff themselves," ESAI said. "US refiners are likely to pay up given the lack of other heavy crude, but if not, then China and India will take advantage."

If the U.S. and Mexico cannot reach a fairly quick compromise on the immigration issue, Americans will likely end up being pinched at the pump. ESAI said there is a considerable chance that the unilaterally imposed tariffs will face legal action or opposition from Congress, but the sanctions will still sting the public until they are lifted.

"[Trump] will likely raise the cost of crude oil and likely gasoline for U.S. customers," the firm said.

Fortunately for U.S. consumers, ESAI believes that the U.S. and Mexico are not that far apart on immigration policy and that the tariffs are a move to prod Mexico to move faster on action it already has deemed reasonable, including better enforcement of its own southern border. As a result, the tariffs should not be considered as critical to the global market as the sanctions on Iran and Venezuela that have essentially choked off the sale of oil by both nations, ESAI said.

"If President Trump can negotiate a fairly quick understanding with Mexico's president, he can claim credit that his get tough policies work and register a 'win' on immigration," ESAI said.