Oil prices climbed on optimism over eased U.S.-China trade tensions, with ICE Brent nearing $65 per barrel by week’s end as fears of punishing tariffs faded.
Donald Trump’s comments on a potential Iran nuclear deal have been the defining bearish moment of this week, however inertia from the market’s robust recovery last week, still riding high on the euphoria of not having debilitating tariffs on US imports to China, managed to lift ICE Brent around $65 per barrel towards the end of the week. With the Russia-Ukraine ceasefire negotiations dragging on, next week could see more of the same.
OPEC Pins Hopes on Lower non-OPEC Supply. OPEC kept its 2025 oil demand growth forecast of 1.3 million b/d unchanged in its May monthly report, all the while trimming the outlook of non-OPEC supply growth to 800,000 b/d against the background of lower oil prices, cutting mostly US shale production.
Saudi Aramco Unveils US Investment Bonanza. Saudi Aramco (TADAWUL:2222) announced 34 preliminary deals with US energy companies potentially worth $90 billion during President Trump’s visit to Saudi Arabia, including multi-billion MOAs with LNG developer NextDecade and utility firm Sempra.
Lower Demand Outlook Saps IEA’s Ambition. Amidst weakening US electric vehicle sales (just 10% in 2024), the International Energy Agency downgraded its impact assessment of oil demand replacement coming from EVs to 5.4 million b/d by 2030, down from 6 million b/d from last year’s forecast.
EU to Slap Tariffs on Ukraine. According to the Financial Times, the European Commission is preparing to raise tariffs on Ukraine, seeking to end the regime of duty-free imports formalized after the Russia-Ukraine war started, with Central European countries taking issue with Kyiv’s agricultural exports.
Mexico Eyes More Crude for Domestic Use. PMI, the trading arm of Mexico’s state oil company Pemex, has announced a decline in crude oil exports over the upcoming period as the long-delayed 340,000 b/d Dos Bocas refinery is finally able to receive crude and should take in some 100,000 b/d of Mexican oil.
Traders Bet on Russia-Ukraine Ending Soon. As negotiators from Russia and Ukraine met in Istanbul this week, global trading house Mercuria Energy has reportedly built up a huge position in aluminium on the London Metal Exchange, expecting that sanctions relief vis-à-vis Moscow would tighten the market.
Eni Found an Investor for Its Renewables Behemoth. Italy’s oil major ENI (BIT:ENI) announced that it had entered exclusive talks with investment firm Ares Alternative Credit Management (NYSE:ARES) to sell a 20% stake in its renewables and retail unit Plenitude in a deal valued at more than $12 billion.