Oil rose as the potential for the U.S. to curtail Iranian flows added to a rebound driven by broader markets.
West Texas Intermediate advanced about 2% to settle near $64 a barrel, recouping most of the previous day’s losses, which were driven by U.S. President Donald Trump’s public rebuke of the Federal Reserve.
Russia downgraded its outlook for exports this year and lowered expectations for the price for its oil, developments that may force the government to dip into its wealth fund to cover wartime spending.
The Economy Ministry forecast a 5.3% decline in exports to 410.6 billion rubles ($5 billion), down from an earlier projection of 445 billion rubles, the Interfax news service reported on Monday. The updated macroeconomic outlook also included a lower price for Urals oil of $56 a barrel, versus $69.70 seen earlier.
Whether China will keep this rate of imports going forward is an open question, with U.S. exports of crude to the world’s top importer clearly set to get decimated if not outright sapped. For oil exporters, however, the more pressing issue is how long the tariff war will continue. Alas, this is also an open question at this part, although there is a chance of good news down the road. Until then, there will be some suffering, especially among the less wealthy oil exporters.
West Texas Intermediate futures added 1.9% to settle near $62.50 a barrel, the third gain in the four past sessions, after China signaled openness to trade negotiations with the Trump administration. Pre-conditions for the talks would include a more consistent US position and a willingness to address China’s concerns around American sanctions and Taiwan, according to a person familiar with the Chinese government’s thinking.
Shareholders, especially activist hedge fund Elliott, will want to make their position known at the AGM votes on Thursday. Activist investor Elliott, which has been pushing for dramatic changes at BP since amassing a 5% stake in the supermajor, is likely to express its continued frustration with BP’s performance by voting against the re-election of directors.
Earlier this week, the Department of Energy (DoE) reported that crude oil inventories in the Strategic Petroleum Reserve (SPR) climbed 0.3 million barrels again to 397 million barrels in the week ending April 11. Inventory levels in the SPR are hundreds of millions shy of the levels in inventory prior to the SPR withdrawal that took place under the Biden Administration.
China, meanwhile, reported March oil imports of over 12 million barrels daily, which was the highest import rate since August 2023, and came thanks to a ramp-up in purchases from Iran and Russia as traders found ways around the latest U.S. sanctions on both exporters. China’s crude oil imports over the first two months of the year fell by 5% compared to the same period of 2024 as the farewell round of sanctions that the Biden administration imposed on Russian energy affected international flows.
A BMI report sent to Rigzone by the Fitch Group on April 11 showed that BMI expected the front month Brent crude price to average $76 per barrel in 2025 and $75 per barrel in 2026. A BMI report sent to Rigzone by the Fitch Group on March 3 showed that BMI expected the Brent price to average $76 per barrel this year, $75 per barrel next year, and $75 per barrel across 2027, 2028, and 2029.
“While I do expect gas prices to continue trending lower, any abrupt change in the current tariff situation could eventually bring the decline to a halt. For now, the good news is that gas prices typically reach their yearly peak around April 10, so we may have already witnessed ‘peak pain’ at the pump for 2025. As refiners near the end of seasonal maintenance and supply begins to rise — and with the changeover to summer gasoline nearly complete — it’s increasingly likely that gas prices have already hit their high for the year,” De Haan continued.
At the time of writing, Brent crude was trading at just over $65 per barrel, with West Texas Intermediate at $61.71 per barrel, after on Friday the Trump administration announced a tariff exemption for certain electronics and semiconductors. Optimism wavered this week, however, as Washington launched investigations into pharmaceutical and semiconductor imports in what the media reported was part of setting the stage for tariffs on these two groups of products. President Trump himself said semiconductors were on the line for tariffs.