If the world price for oil is below the equilibrium price for the u. s. oil market and the u. s. government imposes a tariff on imported oil, u. s. domestic production of oil would and domestic consumption of oil would as a result of the tariff.

This is an application of the law relating price and demand. We see that the imported oil would have a higher price after the tariff. Hence, all other things being equal, its demand would go down. The demand for domestic oil would go up since a competing product would lose a part of the market share. Hence, domestic producing of oil would also go up since there is more profit to be made. Thus, the domestic production of oil would increase and the domestic consumption would decrease since oil is on average more costly.