Oil
Trade War Concerns Erase 2025 Gains for Oil Prices
Oil prices have given up all of their 2025 gains as trade war concerns continue to weigh on both Brent and WTI.
Brent futures have reversed all their 2025 gains and fallen back to exactly where they started this year after global concerns of a potential US-China trade war became the main talking point of the markets. Whilst Donald Trump’s ‘drill baby drill’ policy has been mainly brushed aside by US oil executives meeting in Houston this week, the US President reiterated his enthusiasm for higher US production, adding another bearish note to the overwhelming sentiment. This sets the stage for a $2 per barrel week-over-week decline and ICE Brent settling in the first week of February slightly below $75 per barrel.
The US Treasury imposed new sanctions on several individuals and tankers alleged to have been helping Tehran millions of barrels of Iranian crude oil per year to China, in line with US President Trump’s pledge to apply ‘maximum pressure on Iran’ and bring its exports lower.
US oil executives have warned the industry that growth in oil production from the prolific US Permian Basin will slow by at least 25% this year, rising by some 250,000 b/d after a 380,000 b/d increase in 2024, playing down the impact of ‘drill baby drill’ policies.
Ministers from Canada’s Alberta province visited Japan this week to discuss potential ways of creating new exports markets for Canadian LNG in face of a US tariff threat, pitching new investment opportunities beyond the $40 billion LNG Canada project.
Iran’s President Masoud Pezeshkian called on OPEC members to stand united against ‘destabilizing’ US sanctions on Tehran, meeting with OPEC Secretary General Khaitam al-Ghais as Tehran assumes the rotating presidency of the organization.
Venezuelan oil exports rose by 15% month-over-month to 867,000 b/d in January, driven by Chevron’s hefty 294,000 b/d lifting (the highest since it received a sanctions waiver) and higher outflows to the main buyer of Merey barrels globally, China.
Once believed to be the next Guyana, Namibia’s upstream outlook has soured further after TotalEnergies’ (NYSE:TTE) chief executive said the oil major would postpone a final investment decision on its 150,000 b/d offshore Venus discovery by one year to 2026.
Following last month’s somewhat disappointing IPO of LNG developer Venture Global (NYSE:VG), Patrick Pouyanne of TotalEnergies (NYSE:TTE) said the company rejected VG’s approaches to take up a long-term supply contract from Calcasieu Pass, citing lack of trust.
Colombia’s President Gustavo Petro keeps on hurting the stock performance of national oil company Ecopetrol (NYSE:EC), calling for the sale of its US fracking business developed jointly with Occidental Petroleum (NYSE:OXY), its only growing upstream subsidiary.
Turning a net importer of natural gas again in 2024, the government of Egypt signed deals worth $3 billion with Shell, BP and TotalEnergies to secure 60 cargoes of LNG to cover power generation demand this year, moving away from quarterly tenders.
In a bid to cut operational costs by at least $2 billion, UK oil major BP (NYSE:BP) announced it wants to sell its Gelsenkirchen refining site in Germany, concurrently following through with plans to shut one of the refinery’s distillation columns this year.
US carmaker Tesla (NASDAQ:TSLA) recorded only 1,277 new cars being sold in Germany last month, marking the lowest monthly total since July 2021 and equivalent to a 59% month-over-month decline, with Elon Musk’s political utterances on Germany apparently hurting sales.
Canada’s pipeline operator Trans Mountain is seeking to expedite potential capacity expansion on its 890,000 b/d TMX system, potentially adding 200,000-300,000 b/d as Canadian producers push for alternative evacuation routes that avoid US territory.
India’s government has vowed to re-write its dated civil nuclear liability law that holds both plant operators and equipment suppliers liable for damages in case of any incident, seeking to attract private capital as Delhi eyes a 20-fold jump to 100 GW in nuclear capacity by 2047.
