Macro analysis of the global oil markets to distill the evolving risks and opportunities for energy industry stakeholders and wealth managers.
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Crude slides >2% after Trump unveils 10-50% reciprocal tariffs - April 3, 2025
Crude's prop from supply worries may wobble on fresh wave of tariffs - March 28, 2025
Crude trudged up to successive four-week highs, spurred by worries over the US’ latest moves against Venezuela disrupting the Latin American country’s exports of about 700,000 b/d on top of an ongoing crimp in Iranian supply from four rounds of US sanctions over the past two months.
All-in, we assess the supply risk premium in crude on account of both countries at $3-4/barrel, which is relatively modest.
Crude hasn’t seen a bigger spike for a few reasons: How the US implements the “secondary tariffs” announced against countries importing Venezuelan oil is uncertain; even the language of Trump’s executive order on the tariffs is ambiguous. Iranian crude exports appear to be slowing down but have not plunged. Finally, worries over a US economic slowdown weighing on global growth and becoming a drag on oil demand may have temporarily ebbed, but are far more potent than current supply fears.
Next week may see economic gloom regain hold on oil market sentiment as Trump unleashes a fresh wave of tariffs on or around April 2, which he is calling “Liberation Day” for America. It may push Brent back into its recent weeks’ comfort zone closer to $70.
Unable to keep up with the breakneck speed of US tariff measures, suspensions, deferments and retaliatory moves by other countries? Don’t worry! We bring you the latest scorecard in a neat one-page format.
Mildly bearish near-term and second-half April - April 2, 2025
After weighing the factors supporting and weighing on crude, we concluded:
US' tough new Russia oil sanctions may have a short shelf life - Jan. 12, 2025
The Biden administration took oil market players by surprise on Friday by announcing the most expansive sanctions yet against Russia’s oil sector.
We suspect it was not only the oil market; the US’ European Union allies across the pond may have also been caught unawares – we couldn’t find a single reaction from any of the region’s leaders! The UK, for what it is worth, joined the US, simultaneously announcing sanctions against Gazpromneft and Surgutneftegas,
It was curious to see Biden fire the bazooka just 10 days before handing over charge to Donald Trump, who is clearly going to have a vastly different approach to resolving the Ukraine war.
What does the upcoming change of guard in the US say for the durability of the latest round of sanctions and crude’s 4% spike on Friday? Our succinct insights in this report.
OIL IN 2025: Softer crude prices but not because of oversupply - Dec. 27, 2024
Benchmark Brent crude prices averaged just under $80/barrel in 2024, about 2.7% lower versus last year.
We expect the average to dip into the $70-75/barrel band in 2025, but not because of a sizeable oversupply in the market, let alone a “glut”.
A sombre economic outlook for 2025, bolstered by China’s uphill battle to jump-start growth and amplified by expectations of a fresh round of trade wars under Trump 2.0, has shaped a bearish narrative around oil demand.
But we would caution against leaning too much into the gloom-and-doom scenario.
Crude is more likely to come under pressure from an evaporating geopolitical risk premium and worries over economic stability than any severe economic downturns or recessions.
Oil demand could remain relatively resilient, helped by softer prices, leading to a largely balanced market, especially with OPEC+ remaining extra cautious and conservative in bringing back the barrels it has locked away.
What challenges our baseline views? We also bring you the contrarian perspective and wildcards!
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