Meyersson warned in the report that future talks will be difficult if negotiation positions remain the same, adding that “all parties have an interest in ending the fighting, but need to overcome the crux of nuclear enrichment in Iran, as well as its ballistic missile program, in order for a durable deal”.
The truce between the world’s two largest economies brought some temporary relief to commodity markets roiled by tariffs that dented the outlook for global economic growth in recent weeks. Oil watchers have slashed demand forecasts, and the trade war already was showing signs of reducing the volume of goods arriving in the US.
Brent crude has shed some $11 per barrel since the start of the year, most recently trading at around $64 per barrel. This is substantially lower than what Saudi Arabia needs to balance its budget in view of ambitious public spending programs. This would have to change, and soon, if prices stay this low. In the meantime, Aramco is signaling business as usual.
The contradiction is emblematic of where U.S. shale finds itself in 2025: stuck between political slogans and fiscal reality. On one hand, Trump wants “drill, baby, drill” to be more than just campaign nostalgia. Trump also wants consumers to see lower prices at the pump. Meanwhile, Wall Street wants dividends, not drilling binges.
Oil news this week has been a mixed bag, but it seems bullish developments have prevailed. Sanctions on Iran are one of the leading reasons for the recovery in oil prices. Another is a forecast from the International Energy Agency that expects oil supply growth this year to be weaker than previously predicted.
West Texas Intermediate advanced 0.4% to settle just below $70 a barrel, continuing a three-week rally. A US government report on Wednesday showed the country’s stockpiles shrank by 3.34 million barrels last week to the lowest in a month, helping allay concerns of an oversupplied market.
Crude oil prices earlier today touched a three-week high, driven by the latest U.S. oil inventory report by the American Petroleum Institute and expectations of tighter supply on Washington’s double-down on oil sanctions against Iran and Venezuela.
Brent crude was trading at $73.13 per barrel at the time of writing, with West Texas Intermediate at $69.12 per barrel, after the American Petroleum Institute reported on Tuesday that oil inventories in the county had fallen by 4.6 million barrels in the week to March 21. This was a bigger than expected draw, with expectations being for a draw of 2.5 million barrels. Inventory figures from the Energy Information Administration are due out later today.
The U.S. Treasury announced the sanctions on Thursday, with Treasury Secretary Scott Bessent saying that “The Iranian regime continues to use the proceeds from the nation’s vast oil resources to advance its narrow, alarming self-interests at the expense of the Iranian people. Treasury will fight and disrupt any attempts by the regime to fund its destabilizing activities and further its dangerous agenda.”
A peace deal in the Ukraine could lead to the lifting of Western sanctions on Russia, which would in turn boost the availability of Russian oil supply internationally—but only theoretically. The European Union has signaled on a regular basis over the past three years it is willing to keep squeezing Russian energy as much as it possibly could and it’s quite likely the squeeze will continue even after a peace deal is signed—if that happens.
OPEC+ has extended its production cuts totaling 3.66 million bpd until 2025.
Further production cuts by OPEC+ could impact global oil prices and economic stability, particularly affecting China and the U.S.
Prominent OPEC countries may be reluctant to risk lower oil prices, as doing so could jeopardize the budgets for their ambitious national spending programs.