Oil Markets Readjust as Reality of Trump’s Trade War Sinks In

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As the impacts of President Donald Trump’s tariff warfare becomecleare, oil market participants are now correcting their past outlooks, Oil Price.com reports.

The International Energy Agency carved 300,000 b/d out of its 2025 demand outlook, and OPEC lowered its forecast, too, albeit only by half as much as the IEA. Goldman Sachs, UBS, HSBC, and BNP Paribas have all slashed some $5-15 per barrel from their previous outlooks, with Brent and WTI now trading around $65 and $61.50, respectively.

US special envoy Steve Witkoff and Iranian foreign minister Abbas Araqchi held negotiations in Oman this past weekend that both sides dubbed ‘constructive’, agreeing to hold another round of talks on nuclear proliferation as soon as next weekend.

The International Energy Agency (IEA) predicts that Europe’s LNG imports will increase by 25% in 2025, equivalent to 33 billion cubic metres, as the continent needs to replenish depleted stocks and no longer can avail itself of Russian pipeline gas.

Venezuela’s state oil firm PDVSA has ordered Chevron (NYSE:CVX) to return two cargoes of exported crude and cancelled the US major’s upcoming oil loadings, in reaction to US President Trump’s sanction snapback starting May 27.

After Colombia confirmed that the Sirius gas prospect contains 6 TCf, the largest gas find in the history of the country, the joint Ecopetrol-Petrobras JV announced it would start offering 135 MMCf/d of gas to the wider market from 2029 onward.

Canadian midstream firm South Bow (TSE:SOBO) plans to restart the 620,000 b/d Keystone pipeline on Tuesday after flows were halted last week on the back of a 3,500-barrel spill in North Dakota, but it still needs a written PHMSA approval to do so.

The UK Business Ministry enacted emergency legislation, oddly on a Saturday, to take control of Chinese-owned British Steel after the operator, Jingye Group, refused a $650 million government aid package to repair damaged furnaces.

Italy’s government is reconsidering the country’s end-2025 mandate to end coal-powered generation in the country, as utility major Enel and oil firm ENI both criticized the policy, calling it a ‘folly’ at a time when Germany maximizes coal to meet demand.

Reflecting global trade pressures stemming from the US-China trade war, OPEC has lowered its demand forecasts for both 2025 and 2026 by a uniform 150,000 b/d, expecting this year’s oil consumption growth to be 1.3 million b/d.

Saudi Arabia and the US will soon sign a preliminary agreement to develop a civil nuclear industry in the Middle Eastern kingdom, according to Energy Secretary Chris Wright, although the two sides still negotiate over some non-proliferation clauses.

China’s economic and energy planner NDRC announced that Beijing would continue building coal-fired power plants through 2027 to stabilize the power grid in regions that don’t have enough clean energy potential, moving the country’s coal demand peak to 2028.

US investment bank Goldman Sachs (NYSE:GS) raised its year-end forecast for gold to $3,700 per ounce, citing ever-stronger purchasing demand from central banks and higher-than-expected trade war fallout, with the bullion currently trading above $3,200/oz.

Donald Trump’s exemption of China-produced consumer electronics from the 145% import tariff has buoyed copper prices and sent the May COMEX contract back to $10,170 per metric tonne during intraday trading, a hefty $1,000/mt higher than LME prices.

The Lake Charles LNG project developed by US firm Energy Transfer (NYSE:ET) could only be commissioned in 2031 after the midstream major asked for a 3-year deadline extension, citing Biden’s LNG moratorium and the lack of contracting availability as key causes.