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OPEC+ Supply Boost Catches Traders Off Guard
OPEC+’s decision surprised the market, as many expected the group to maintain its current cuts. Analysts suggest the move may be politically driven, particularly as former President Donald Trump has pushed for lower oil prices.
“The shift in OPEC’s strategy appears to prioritize politics over price,” noted Bjarne Schieldrop, chief commodities analyst at SEB. With additional barrels coming to market, traders are now reassessing supply expectations.
Tariffs Raise Demand Concerns
New 25% U.S. tariffs on imports from Canada and Mexico, along with a doubling of duties on Chinese goods to 20%, took effect Tuesday. China quickly retaliated with 10%-15% hikes on U.S. agricultural products and restrictions on 25 American firms.
Goldman Sachs warned that while tariffs may not directly hit crude prices, they could weaken economic activity and slow energy demand. The market is now factoring in reduced consumption, particularly in trade-dependent industries.
Russian Sanctions Relief Fears Add to Bearish Pressure
Reports that the White House may ease sanctions on Russian oil exports added to selling pressure. The news follows Trump’s decision to pause U.S. military aid to Ukraine, fueling speculation that Washington could be moving toward de-escalation with Moscow.
Tony Sycamore, analyst at IG, called it a “perfect storm” for crude, citing increased supply, trade disputes, and potential Russian barrels returning to market as key downside risks.
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