Oil Prices Rebound on China Import Surge and U.S. Tariff Exemption Hints

Oil prices rose on Tuesday, with Brent crude gaining 27 cents to $65.15 per barrel and U.S. WTI up 26 cents to $61.79, amid signs of easing U.S. trade tariffs and stronger Chinese demand. President Trump suggested modifying the 25% tariffs on auto and auto parts imports, potentially reducing pressure on global trade flows. The Trump administration also announced exclusions from tariffs on electronics, which helped lift oil prices earlier in the week. OPEC responded to trade war uncertainties by lowering its global oil demand forecast for the first time since December. China’s crude imports in March climbed nearly 5% year-on-year, driven by increased Iranian oil shipments ahead of stricter U.S. sanctions. These higher imports contributed to upward pressure on oil prices despite market volatility. Meanwhile, Kazakhstan reported a 3% drop in early April oil output compared to March, though its production remains above its OPEC+ quota. Market sentiment remains mixed as geopolitical tensions and fluctuating U.S. trade policies continue to influence oil trends.

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Kazakhstan’s Oil Output Falls but Remains Above OPEC+ Quota Amid Export Challenges

Kazakhstan’s oil output dropped by 3% in the first two weeks of April compared to March, driven by reduced production at the Tengiz oilfield, though it remains above the OPEC+ quota of 1.473 million barrels per day. The country's repeated overproduction has frustrated other OPEC+ members, including Saudi Arabia. Kazakhstan’s March crude production rose by 37,000 barrels per day, prompting pledges from the energy ministry to meet its April targets and partially offset earlier excess output. Tengiz, led by Chevron, contributed significantly to the March surge but saw daily output fall to 884,000 barrels in early April. Several Western oil majors, including Shell, ExxonMobil, and TotalEnergies, are active in Kazakhstan’s oil sector. Export routes have also faced disruptions, particularly through the Caspian Pipeline Consortium (CPC), affected by drone attacks and disputes over port equipment in Russia. Despite these issues, CPC oil flow rose 0.6% in March from February levels to 1.69 million barrels per day. Kazakhstan maintains that oil exports via CPC remain uninterrupted despite geopolitical tensions.

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OPEC Cuts 2025 Oil Demand Growth Forecast Amid U.S. Tariff Impact

OPEC has reduced its global oil demand growth forecast for 2025 by 150,000 barrels per day to 1.30 million bpd, the first such revision since December. The 2026 forecast was also lowered by 150,000 bpd to 1.28 million bpd, reflecting weaker-than-expected Q1 data and new U.S. trade tariffs. The report cites increased economic uncertainty due to President Trump’s tariff measures and upcoming OPEC+ output plans. As a result, OPEC downgraded global GDP growth forecasts for 2024 and 2025 to 3.0% and 3.1%, respectively. Despite the downward revisions, OPEC still maintains a more optimistic long-term view of oil demand compared to the International Energy Agency (IEA). OPEC believes global oil use will continue to grow for years, unlike the IEA, which expects demand to peak this decade. Oil prices remained near $66 a barrel following recent tariff exclusions but are still down more than 10% in April. The IEA is expected to release updated oil demand forecasts the following day.

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Russia Forecasts Stable Oil Exports, Surging Gas Sales Through 2050

Russia’s newly released energy strategy projects stable oil production and exports alongside a sharp rise in natural gas output and sales by 2050. Despite losing most of its European gas market after the 2022 Ukraine invasion, Russia plans to boost natural gas exports—including LNG and pipeline gas—from 146 bcm in 2023 to 293 bcm by 2030 and 438 bcm by 2050. LNG alone is projected to grow from 45 bcm in 2023 to 142 bcm in 2030 and 241 bcm by 2050. Annual oil production is expected to hold steady at 540 million metric tons (10.8 million barrels/day) through 2050, up slightly from 2023 levels. Oil exports are projected to remain broadly unchanged, averaging 235 million tons per year through 2050. Western sanctions have hindered some Russian energy projects, such as the Arctic LNG-2 facility, which has been unable to deliver gas due to U.S. restrictions. Nonetheless, Russia is aiming to diversify its export markets and invest heavily in LNG infrastructure. The strategy outlines a long-term vision to maintain Russia’s global energy influence despite geopolitical challenges.

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Clarksons Cuts VLCC Rate Forecasts Amid Trade War, But Sees Long-Term Upside

Clarksons Securities has sharply lowered its VLCC spot rate forecasts due to weak global growth and oil prices tied to the ongoing US-China trade war. Rates are now expected at $50,000 per day for 2025 and 2026, down from $70,000, with eco ships earning slightly more and older vessels less. Despite the downgrade, Clarksons still sees the VLCC sector as its top shipping pick, citing low valuations and upside potential. Tanker stocks are trading at steep discounts to net asset value, reflecting overly pessimistic rate assumptions. Analysts argue that slower vessel speeds used for floating storage and the potential reduction of Iran’s shadow fleet could tighten market fundamentals. They noted that a shift of just 500,000 bpd from shadow fleet to compliant VLCCs would absorb around 13 tankers. While newbuild deliveries are limited over the next year, short-term demand concerns persist, especially in the Middle East, where rates are under pressure. UK shipbroker Gibsons sees potential sentiment improvement in May if demand picks up.

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DHT Holdings Secures Seven-Year VLCC Charter with Strong Base Rate and Profit Share

DHT Holdings has chartered its 2018-built VLCC DHT Appaloosa to a global energy company on a lucrative seven-year deal. The agreement features a $41,000 per day base rate, with any additional earnings above that amount split equally between the charterer and DHT. The rate is above broker estimates, with Clarksons suggesting $36,000 for a five-year term and MB Shipbrokers quoting $45,000 for three years. The deal includes a two-year extension option and marks DHT’s longest charter to date. This is the eighth vessel DHT has placed on time charter, and the company’s spot and time-chartered VLCCs averaged $38,200 per day recently. Time-chartered ships earned an average of $42,700 per day, while spot market earnings stood at $36,300 per day. For Q2 so far, DHT has secured 56% of its spot days at a much higher $48,700 per day. The company’s shares rose to $10.71 in pre-market trading following the announcement.