As Saudi Arabia pushes ahead with its ambitious Vision 2030 plan to build huge futuristic cities and resorts, the world’s top crude oil exporter will need to borrow more money on the debt markets as oil prices continue to linger at levels of about $20 per barrel lower than the Saudi fiscal breakeven oil price.
It is quite unsurprising to get such a warning from a central bank that, like other state financial institutions, quite unsurprisingly follows commodity market forecasts. Such behavior is even less surprising from the central bank of one of the world’s largest oil producers. Moreover, Russian budget drafters tend to be conservative in their oil price estimates traditionally, so the central bank is likely to also err on the side of caution. In fact, the bank forecast the average price of Brent crude this year at $60 per barrel in a recent update. That’s down from $68 per barrel for 2024 and $60 for both 2026 and 2027.
Oil prices rallied in Wednesday’s session, a day after U.S. President Donald Trump announced that any country that buys oil or gas from Venezuela will pay a 25% secondary tariff on trades with the United States. Trump claims that Venezuela has sent “tens of thousands” of people to the U.S. who have a “very violent nature.” Brent crude for May delivery gained 1.2% to trade at $73.89 per barrel at 11.30 am ET while the comparable WTI crude contract climbed 1.2% to $69.84.
The secondary tariffs will target China, India, Spain, Italy and Cuba–all major buyers of Venezuelan oil. The tariffs could disrupt global oil supply chains, with U.S. oil companies likely to emerge as key beneficiaries of Venezuela’s customers looking for alternative supplies.
Crude oil inventories in the United States saw a decrease of 3.3 million barrels during the week ending March 21, according to new data from the U.S. Energy Information Administration released on Wednesday.
Crude oil prices were trading up prior to the crude data release by the U.S. Energy Information Administration after the American Petroleum Institute (API) reported on Tuesday a draw of 4.6 million barrels in U.S. crude oil inventories amid a strong gasoline draw. The Brent benchmark was trading up 0.88% at 9:39 a.m. ET at $73.66—a roughly $3 per barrel increase over this same time last week. The WTI benchmark, meanwhile, was trading up 0.84% at $69.58—just shy of a $3 per barrel rise over last week’s levels.
A ceasefire to the Russia-Ukraine war could be bearish for oil prices if Trump pushes for the removal of sanctions on the Russian energy industry, Tyler Richey, co-editor at Sevens Report Research, told MarketWatch. Geopolitical stability may also “largely extinguish the still simmering ‘fear bid’ in the oil market.” Sanctions by the Biden administration roughly tripled the number of directly sanctioned Russian crude oil tankers, enough to affect around 900,000 barrels per day (bpd). Whereas it’s highly likely that Russia will try to circumvent the sanctions by employing even more shadow fleet tankers and ship-to-ship transfers, StanChart sees 500,000 bpd of displacements over the next six months.
Potentially rekindling the market’s geopolitical risk premium, US President Donald Trump said in a social media post that the administration will view maritime attacks by the Houthi militia as equivalent to direct affronts by Tehran. That followed Defense Secretary Pete Hegseth’s comments on Sunday that US strikes on Houthi sites will be “unrelenting” until the group stops targeting vessels in the Red Sea.
BP’s slide and the drop in crude prices complicates a bet by Elliott Investment Management, which has bought up around 5% of BP. The activist investor has been ramping up pressure on BP after its new strategy fell short of its expectations, people with knowledge of the matter said.
The ink is barely dry on Trump’s 10% tariff on Canadian energy, and already, fuel prices are bracing for impact. As GasBuddy’s Patrick De Haan puts it, “The real-world impact of tariffs won’t be to shift refining patterns, instead, it will be to add costs throughout the system.” Translation? Expect to shell out more at the pump, GasBuddy predicts.
Chevron has been exporting some 240,000 barrels of Venezuelan crude to the United States daily thanks to the waiver. The company also had big plans for its Venezuelan operations, aiming to boost exports from just one of them, Petropiar, by as much as 50% this year, to a total of 143,000 barrels daily.
Trafigura Group’s head of oil trading Ben Luckock has named U.S. foreign policy towards Iran as the biggest upside risk to crude prices in an otherwise well-supplied market.