Iran Sanctions: On Thursday, the United States imposed new sanctions on Iran’s oil trading networks, which include targeting a China-based crude oil storage terminal connected via pipeline to an independent refinery. This marks the latest phase in Washington’s ongoing efforts to curb Iran’s oil exports, a campaign first highlighted by President Trump in February, with the goal of reducing the country’s oil exports to zero to prevent the development of nuclear weapons. The sanctions also extend to two entities based in the UAE and two in India, which own and operate vessels transporting Iranian oil on behalf of the National Iranian Oil Company and the Iranian military. The U.S. continues to prioritize the disruption of all facets of Iran’s oil exports, particularly targeting those who facilitate and profit from this trade.
EIA Short Term Energy Outlook: According to the U.S. EIA (Energy Information Administration), global tariffs are exerting significant pressure on the economic outlook, which could have a substantial impact on oil prices in the coming months. This underscores the considerable uncertainty in energy markets, driven by the potential for lower global economic growth and an increase in oil supply. The EIA has revised its forecast for global oil and fuel demand for 2025, now projecting growth of 900,000 bpd from last year, down from an earlier estimate of 1.2 million bpd, and for 2026, the EIA has adjusted its forecast for demand growth to around 1 million bpd. Additionally, a combination of weaker demand and an accelerated increase in oil supply by the OPEC+ group is expected to raise global crude inventories sooner than anticipated, and as a result, the global oil market is likely to experience a broader surplus this year compared to earlier projections. The EIA now forecasts that WTI crude prices will average $63.88 per barrel in 2025 and $57.48 in 2026, significantly lower than its previous forecasts of $70.68 for 2025 and $64.97 for 2026.
U.S. Weekly Jobless Claims: The U.S. Department of Labor reported a modest increase in the number of Americans filing new claims for unemployment benefits, suggesting a potential upward trend as businesses adjust to tariffs imposed under President Donald Trump’s administration. Initial jobless claims rose by 4,000 to 223,000 for the week ending April 5th, aligning with economists' expectations. The administration’s ongoing tariff policies have significantly dampened both business and consumer confidence, potentially curbing investment, consumer spending, and demand for labor. In March, the economy added 228,000 jobs, while the unemployment rate inched up to 4.2% from 4.1% in February. Despite ongoing legal challenges and concerns over possible mass layoffs of federal employees, there has been no clear evidence of a widespread impact on the broader labor market. Overall, while layoffs remain historically low, hiring activity has shown signs of slowing.
Market Overview: Oil prices are trading fairly flat so far this morning, but remain on course for a second consecutive weekly decline, amid growing concerns over the escalating trade tensions between the United States and China. Analysts anticipate continued downward pressure on prices as investors closely monitor the progress of trade negotiations and the broader implications of the deepening conflict between the two economic powers.
Crude Movement Since January 20th
The chart today shows how Brent oil prices have been affected since President Trump came into office January 20th. Global commodity markets are reacting to the escalating tariffs imposed by the U.S., with retaliatory measures from major trading partners introducing additional risks. These developments have heightened market volatility, compelling traders to closely monitor policy announcements and reassess trade flows. The oil and energy markets are under significant pressure due to the ongoing trade conflict, with crude prices hitting their lowest levels since the pandemic. WTI crude oil prices have fallen below $60 per barrel multiple times this week, marking the first occurrence of such levels since 2021. These steep declines come in response to the latest round of tariffs, which have reignited concerns over a potential global economic slowdown and weakened investor sentiment.
Once again, today’s oil prices have been a bit of a rollercoaster, bouncing between red and black throughout the trading session. The recent fluctuations in oil prices are largely attributed to concerns over the ongoing U.S. - China trade tensions, which are dampening global economic growth prospects and, consequently, oil demand. Additionally, geopolitical factors such as tensions in the Middle East and production decisions by major oil-producing nations like Russia and OPEC have contributed to market volatility. At the close WTI finished the day higher by just shy of 2.5% at $61.50.
