Geopolitical Risk, Tariff Delays Push Oil Prices Higher

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Oil prices are set to end the week higher after geopolitical risk climbed and Trump delayed tariff announcements.

Oil prices are set for a marginal weekly gain after the commodity markets’ worst-case scenario – US President Trump announcing tariffs on most of the world – was temporarily averted, with the White House postponing the decision-making deadline to August.

Meanwhile, the return of the ‘Houthi missile factor’ adds to oil’s geopolitical risk premium and helped to keep ICE Brent around $70 per barrel, with further upside coming from Trump’s flaunted ‘major’ Russia announcement this upcoming Monday.

In its 2025 World Oil Outlook, OPEC boosted its global demand outlook as the oil group expects consumption to reach 122.9 million b/d by 2050, adding more than 19 million b/d over the next 25 years, banking on Indian, African and Middle Eastern growth.

Speaking at OPEC’s summer seminar in Vienna, UAE energy minister Suhail al-Mazrouei said that the Middle Eastern country could be producing 6 million b/d of crude by 2027 if required, almost double its current levels as OPEC+ unwinds its voluntary cuts.

The July pricing spread between diesel prices in Asia and Europe widened further to a whopping $120 per metric tonne, the widest since October 2022, as the UK’s bankrupt Lindsey refinery forced Northwest European refiners to pay up for spot available cargoes.

After the EU’s initial suggestion to lower Russia’s oil price cap from $60 per barrel to $45 per barrel failed to garner the support of US President Trump, the European Commission now proposed having a floating Russian oil price cap, adjusted depending on global prices.

The Trump administration’s planned 50% tariff on Brazilian goods (despite having a $7.4 billion trade surplus) would most probably trigger a steep rally in US coffee prices, currently trading at $2.84 per futures contract, as Brazil currently accounts for 35% of US imports.

US LNG developer New Fortress Energy (NASDAQ:NFE) has been on a rollercoaster ride lately after its 15-year term LNG deal to supply Puerto Rico initially lifted its stock, only to collapse after the island’s regulatory watchdog halted the deal over monopoly concerns.

The insurance costs of shipping goods through the Red Sea has more than doubled since the beginning of this week, as Houthi attacks sunk two Greek-owned bulkers, with war risk premiums now assessed at 0.7% of the value of the ship, up from 0.3% a week ago.

Africa’s largest private refiner, the Nigerian Dangote refinery, expects to rely on Nigerian crude exclusively by the end of the year after its term supply deals for US WTI run out, having so far locally sourced 270,000 b/d out of the plant’s total 450,000 b/d needs.

Global commodity trader Gunvor has decided to halt all terminal activities at the Europoort oil refinery in Rotterdam, Netherlands, seven months after it mothballed the processing units at the 80,000 b/d plant, formerly owned by Kuwait’s national oil company KPC.

Saudi Arabia’s national oil firm Saudi Aramco (TADAWUL:2222) is reportedly in talks with US LNG developer Commonwealth LNG to secure 2 million tonnes of LNG per year from its planned facility in Cameron, LA, whilst also assessing the Delfin LNG and Lake Charles LNG projects.

Differentials of US medium sour benchmark Mars, the largest oil stream in the Gulf of America, sank to a $0.10 per barrel discount to WTI after reports of zinc contamination in the crude, with the corrosive metal making it harder for refiners to run it.

Chinese refiners are maximizing imports of Saudi barrels, nominating 51 million barrels of August-loading cargoes and marking the highest monthly request since April 2023, despite Saudi Aramco hiking next month’s formula prices by more than $1 per barrel.

Several LNG suppliers that have supply term deals with Egypt postponed their July-arrival deliveries after the launch of two new FSRUs along the Egyptian coast got delayed, with both Energos Power and Energos Eskimo receiving their cool-down cargo only this week.

About The Author

Dele Fashomi

Dele Fashomi, seasoned journalist and communication teacher, is a holder of Master of Arts degree in Communication and Language Arts from the University of Ibadan in 1992/93.

Earlier, he had bagged a Bachelor degree from the same university in 1984, after which he proceeded to the Nigerian Institute of Journalism, Lagos, in 1990, for a postgraduate diploma in Journalism.

He had done many courses in communication, including the EU-BBC Editing Course in 2002.

Mr. Fashomi combines effectively the practice, research and teaching of communication. And to date, he has published two academic works in communication: Issues in Communication Technology and Policy (2010) and Economic and Social Issues in Advertising and PR (2013).

He had his first break in the Nigerian media in Concord Newspapers in 1990 and today, he has over two and half decades experience earned in several newspapers.

He has been part of many start-ups, such as The Republic (1987), The Comet (1999), The Anchor 2001 – 2002; Sun Newspapers (2003); Westerner newsmagazine (2005 – 2010) as Editor; National Life (2011) as Sunday Editor, and Newswatch Newspapers (2012- 2016) as Daily Editor.

Dele Fashomi is now the Publisher/Editor-in-Chief of Newstide247.com newspaper online, which he started in July 2015. He is also into biography writing, with many books in his trail, some of which he wrote alone and one he co- authored with his mentor, Mr Dare Babarinsa, entitled: Olabiyi Durojaiye – DARE TO BE DiFFERENT. He also guided and collaborated with Pa Olatunji Odusanya in writing his autobiography – AGAINST ALL ODDS. There are many other books in the works under his pen.

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