Oil
Trump’s New Tariffs Boost Oil Prices Despite Potential Demand Consequences
The momentum coming from Donald Trump’s constant threats has been a boon to oil prices, even if the price movements sometimes contradict macroeconomic assumptions, OilPrice.com reports.
The 25% tariff on steel and aluminum could be disruptive for global economic growth, further aggravated by the threat of higher inflation keeping US interest rates unchanged for longer, but the market’s kneejerk reaction was once again bullish, sending ICE Brent back to $77 per barrel.
US President Donald Trump announced 25% tariffs on all steel and aluminum imports into the United States, coming on top of already existing duties, raising concerns that steelmakers from Brazil, Canada, and Mexico could retaliate with reciprocal steps.
Reacting to Trump’s pledge to exert maximum pressure on Tehran and block its 1.5 million b/d oil exports to China, Iranian foreign minister Abbas Araqchi said Iran would not negotiate under pressure, recalling the US’ abrupt 2018 JCPOA pull-out.
China’s economic planning body NDRC announced that prices of on-grid electricity producers from renewable sources of energy will be no longer fixed and will instead be determined by the market from June 2025 onwards.
Saudi Aramco (TADAWUL:2222) is set to load 41 million barrels of crude to Chinese refiners in March, down 15% compared to this month’s nomination of 44 million barrels as Asian formula prices were hiked by $2.40-2.50 per barrel to multi-year highs.
The emerging trade conflict between Washington and Beijing has put an end to four consecutive week-over-week increases in hedge funds’ long positions in crude oil, with net positions down by 18 million barrels in the week ending February 4.
As Japan’s Prime Minister Shigeru Ishiba visited the United States, steelmaker Nippon Steel (TYO:5401) announced it would seek an investment in US Steel (NYSE:X) instead of an outright purchase after Trump claimed no one could have a majority stake.
Amos Global Energy Management, a US upstream startup led by former Chevron E&P boss Ali Moshiri, has agreed to buy Chinese Sinopec’s oil and natural gas interests in Venezuela, eyeing potential gas exports to Trinidad and Tobago.
UK oil major BP (NYSE:BP) reported a 35% drop in annual profits last year as it generated 8.9 billion, but the firm’s stock has been gradually increasing as reports emerged that activist investor Elliott Investment built a stake in the company.
India’s state-run oil explorer Oil India (NSE:OIL) signed an agreement with Brazil’s deepwater specialist Petrobras (NYSE:PBR) to jointly bid for oil and gas exploration blocks in the South Asian country after no foreign firms bid in the 2024 licensing round.
Mexican crude imports slumped 40% month-over-month to less than 600,000 b/d just as US Gulf Coast refiners started to shun Mexican heavy grades, with Maya cargoes reportedly having a water content of as much as 6%, six times the industry standard.
The Baltic countries of Lithuania, Latvia, and Estonia formalized their switch from Russia’s electricity grid to the European system after disconnecting from the IPS/UPS network that had been working since the Soviet times of the 1950s.
Echoing Japanese politicians, Taiwan’s government has also expressed readiness and interest to participate in the 20 mtpa Alaska LNG project due to its short shipping distance, wary of Trump’s tariffs as Taipei is running a $74 billion trade deficit with the US.
Saudi Aramco-owned Motiva Enterprises expanded its Port Arthur refinery in Texas to a capacity of 654,000 b/d, largely by removing operational bottlenecks, and overtook Marathon Petroleum’s Galveston Bay plant to become the largest US refinery.
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