Geopolitics pushes oil prices back as Brent sells $73-74 per barrel on global markets

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Geopolitical risk has pushed oil prices back up this week, but traders are likely to refocus on fundamentals as the month draws to an end and the next OPEC+ meeting looms.

Brent futures have been trading within a narrow bandwidth of $73-74 per barrel, but the return of geopolitical risk has pushed oil prices higher – recouping most of November’s losses to date. Whilst Russia’s launch of hypersonic missiles into Ukraine is keeping the markets busy for now, the contours of an OPEC+ meeting taking place next weekend are looming large for oil. Expect a lot of OPEC+ policy speculation in the coming week.

The International Atomic Energy Agency passed a resolution urging Iran to improve cooperation with the global nuclear community and requesting a comprehensive assessment of its arsenal, with Tehran defying to comply but suggesting capping its stock of uranium, OilPrice.com reports.

The latest COP29 draft on climate finance commitments has been lambasted for lacking hard figures and providing no pathway for bridging the funding gap between developed and developing countries, with all participating countries rejecting the draft this week.

US oil major ExxonMobil (NYSE:XOM) and its project partners have pulled out of negotiations with Guyana over potential exploration terms in the country’s most recent licensing bid for shallow-water blocks, relinquishing the right to operate block S8.

The US Treasury Department tightened energy sanctions on Russia after it imposed new sanctions on Gazprombank, the largest facilitator of energy payments for Russian fossil fuels as it is used by Gazprom to receive natural gas payments for deliveries to Europe.

The largest oil company in the world, Saudi Arabia’s Saudi Aramco (TADAWUL:2222), is seeking to take on more debt for capital, sticking to ambitious dividend payments to the state, as it continues to contain the country’s fiscal benefit by means of its own debt.

The Mexican Congress has voted in favor of a bill that would eliminate seven of the 11 independent regulators in Mexico, seeing the country’s National Hydrocarbons Commission, as well as the CRE regulatory commission, absorbed by the Energy Ministry.

The Iraqi government has claimed to be clamping down on the illegal smuggling of crude oil, bitumen, and other products to Iran through the semi-autonomous Kurdistan region, asking Tehran to block any delivery unless it is licensed by the state export firm Somo.

Activist investor Elliott Investment Management reported a 5.03% stake in one of Japan’s largest utility firms Tokyo Gas (TYO:9531), following similar moves with trading house Sumitomo, advocating to sell large amounts of real estate it owns for capital efficiency.

Gazprom’s pipeline flows to Europe via Ukraine have been stable this week despite the Russian firm’s contractual dispute with OMV and its subsequent halting of deliveries to the company, indicating others have stepped in to buy more gas.

Brazil’s state-controlled oil firm Petrobras (NYSE:PBR) approved the payout of $3.4 billion in extraordinary dividends to shareholders, all the while greenlighting its $111 billion investment plan for 2025-2029, of which 70% will be geared towards E&P.

US President-elect Donald Trump will seek to weaken the Biden-era vehicle efficiency and tailpipe emission standards, whilst also considering the scrapping of a $7,500 tax credit for EV buyers introduced in 2022 as part of the IRA stimulus package.

Egypt is reportedly negotiating potential long-term LNG supply deals with US and other foreign majors, preferring them over costlier spot deals, as domestic production of gas fell to a seven-year low in September on the back of lower Zohr output volumes.

China’s state outlet Xinhua reported that the country discovered gold reserves worth $83 billion in central Hunan province, the equivalent of more than 300 tonnes of highest-grade ore, further boosting its standing as the world’s largest gold producer.