Oil Price sinks to pandemic lows

Oil prices dropped nearly 8% to their lowest level since 2021 due to China's retaliation against U.S. tariffs. Beijing imposed a 34% additional levy on all U.S. goods after Trump announced tariffs on American imports. This conflict has escalated tensions and raised fears of a global trade war, impacting economic growth and reducing demand for commodities. The U.S. excluded energy from its levies, but China's retaliatory measures cover all American goods, including export restrictions on rare earths. The move has caused oil prices to plummet, with Brent futures falling 6.46% to $65.63 a barrel and U.S. West Texas Intermediate crude futures down 7.36% to $62.02, marking the lowest close since the peak of the COVID-19 pandemic in April 2021.

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Saudi Arabia pushes OPEC+ to open oil taps

Saudi Arabia's decision to increase oil production was driven by frustration with overproducing nations like Kazakhstan and Iraq, leading to a significant drop in oil prices. Despite the price decrease, Saudi Arabia may not reverse the production increase. The move, which brought oil prices below $65 per barrel, is seen as a way to punish cheaters within the OPEC+ group. Additionally, the decision may also be related to geopolitical factors, including efforts to improve relations with U.S. President Donald Trump, who has been advocating for lower oil prices and a reduction in Iranian oil exports. Trump's influence has played a role in past oil price wars, and his actions are expected to impact the global oil market. However, uncertainties remain, particularly regarding U.S. shale producers, who may be affected by the ongoing fluctuations in oil prices. The decision to increase oil production reflects the complex and unpredictable nature of both the oil market and geopolitical relationships, resembling the unpredictability of Trump's policies.

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US oil rig count rises to highest since June

According to Baker Hughes, U.S. energy firms reduced the number of oil and gas rigs operating for the second consecutive week, with the overall count dropping by two to 590. However, the number of oil rigs increased by five to 489, reaching its highest level since June, while gas rigs decreased by seven to 96, hitting the lowest point since September. This decline in rig count can be attributed to lower oil and gas prices in recent years, leading energy companies to prioritize shareholder returns and debt reduction over production expansion. Despite expectations for U.S. crude prices to fall for a third consecutive year in 2025, the U.S. Energy Information Administration (EIA) forecasts that crude output will climb from a record 13.2 million barrels per day in 2024 to approximately 13.6 million barrels per day in 2025. Additionally, the EIA anticipates a 91% increase in spot gas prices in 2025, prompting producers to ramp up drilling activity following a price drop in 2024 that led to production cuts for the first time since the COVID-19 pandemic in 2020. Gas output is projected to increase to 105.2 billion cubic feet per day in 2025, up from 103.2 bcfd in 2024 and a record 103.6 bcfd in 2023.

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Asian spot LNG prices remain at 6-month low

Asian spot liquefied natural gas prices hit a six-month low due to U.S. President Trump's trade tariffs causing global market downturn and fears of a recession. China retaliated with significant tariffs on U.S. goods. This environment is discouraging for the LNG market, impacting prices and trade flows. European gas prices also plummeted, influenced by oil and stock market declines. The weakening of the dollar against other currencies is making U.S. LNG more competitive globally. Despite facing tariffs, Europe is likely to continue importing U.S. LNG. The LNG freight market saw Atlantic rates decrease while Pacific rates increased.

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Suezmax rates could slide rapidly after closures at key terminal

UK broker Braemar has warned of delays and increased demurrage costs due to two out of three Russian mooring points being out of action at the Black Sea CPC terminal. Loadings of Kazakh oil from the port of Novorossiysk will be constrained as two single-point moorings are suspended, with only one remaining operational. This could reduce throughput by nearly 50%, impacting global oil supply. Market sources are unsure of the duration of the suspension. The disruption could lead to logistical bottlenecks, shipping delays, and higher costs for CPC blend crude cargoes primarily transported on suezmax tankers. Earnings for the CPC to Mediterranean suezmax route had risen due to increased output at the Tengiz oil field in Kazakhstan, with more shipments now heading to Asia. European refiners may have to find alternative crude sources from Latin America and the Middle East if the disruption continues. Kazakhstan may explore alternative routes, such as the Trans-Caspian corridor, to mitigate operational constraints, but infrastructure limitations and high transportation costs remain challenges.

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Nigeria’s NNPC trades and ships out first crude cargo

Nigerian National Petroleum Corp (NNPC) has secured an export deal by sending out its own cargo to a customer, following a similar deal for LNG last year. The crude will be loaded on Delta Tankers’ Meltemi I and the deal is done on an ex-ship basis, with the seller handling shipping and insurance. This marks a milestone for NNPC and Nigeria, as they move towards becoming a global energy supplier. NNPC has also been involved in LNG trading since 2021, with a joint venture with Stena Bulk in Sweden to own tankers and gas carriers for West African markets. This venture aims to create a modern and efficient fleet based on market factors and opportunities. NNPC has previously fixed crude tankers to supply oil to the Dangote refinery and recently appointed Bayo Ojulari as its CEO to drive economic growth in Nigeria.