U.S. Sanctions: On April 28, 2025, the U.S. imposed sanctions on three vessels and their owners for delivering oil and gas products to Yemen’s Houthi-controlled port, aiming to cut off funding for the group's Red Sea shipping attacks. The sanctioned entities include companies registered in the Marshall Islands and Mauritius, which used cargo vessels to supply the Houthis. These actions follow the U.S.'s March designation of the Houthis as a Foreign Terrorist Organization, citing threats to regional and global security. The sanctions were announced just hours after a U.S. airstrike reportedly killed 68 people at a migrant detention center in Yemen. Houthi attacks on commercial vessels, which they claim are in support of Gaza, have disrupted global trade routes and heightened tensions linked to the broader Israel-Hamas conflict.

Emergency Waiver: The Trump administration issued an emergency waiver allowing the nationwide sale of E15, a gasoline blend containing 15% ethanol, during the summer driving season starting May 1. This move aims to boost fuel supply, lower gasoline prices, and support U.S. corn farmers and biofuel producers by expanding the market for ethanol. Normally restricted in summer due to smog concerns, E15 sales have been temporarily allowed under the justification of preventing fuel shortages amid global energy instability. The Environmental Protection Agency (EPA) expects to extend the waiver as needed and has also eased regional fuel requirements in several Midwestern states. Biofuel industry groups praised the decision, arguing it will offer consumers more choice and help stabilize prices during the peak travel season.

OPEC+: Kazakhstan’s oil production in April remained above its OPEC+ quota despite falling 3% from March levels, averaging 1.814 million barrels per day. The country's assigned OPEC+ quota for April was 1.473 million bpd, and it has consistently overproduced, drawing criticism from other members of the alliance. Energy Minister Erlan Akkenzhenov emphasized that Kazakhstan will prioritize national interests over OPEC+ commitments, though the country has pledged to reduce cumulative output by 1.3 million bpd by April 2026 to compensate. Oil exports rose 7% year-on-year in the first quarter of 2025, aided by increased flowthrough the Caspian pipeline. Output at the Tengiz field, Kazakhstan’s large stand operated by Chevron, declined slightly in April, though overall production remains elevated due to recent field expansions.

Market Overview: Oil prices fell on Tuesday to near a two-week low, with U.S. West Texas Intermediate crude dropping 1.8% to $60.95 a barrel, as investors grew concerned about weakening demand due to the ongoing U.S.-China trade war. Analysts warned that a prolonged trade conflict could lead to a global recession and further reduce oil demand, pressuring prices downward. Some OPEC+ members are expected to propose another production hike in June, despite already weak market sentiment. Kazakhstan, a key producer, continues increasing exports, with a 7% year-on-year rise in Q1 2025, further contributing to the oversupplied market.

U.S. West Texas Intermediate (WTI) crude futures remain in the red this morning. This dip reflects ongoing investor concerns over the U.S.-China trade tensions, which continue to cloud the global economic outlook and raise fears of reduced oil demand. Additionally, market participants are apprehensive about the possibility of OPEC+ accelerating its oil output increases when the group meets on May 5, potentially leading to oversupply. Geopolitical factors, including the continuation of nuclear talks between the U.S. and Iran and a significant explosion at Iran’s Bandar Abbas port, have further contributed to market volatility.

Oil prices dropped about 2% to a two-week low amid fears that an expected OPEC+ production increase and U.S. tariffs could weaken global fuel demand. West Texas Intermediate crude fell to $60.42 per barrel, as economists warned that Trump's trade policies might trigger a global recession. The U.S.-China trade war escalated, with both nations imposing tariffs, leading analysts to sharply reduce their oil demand and price forecasts. The trade conflict also impacted major corporations, with UPS announcing 20,000 job cuts and GM delaying its outlook, while BP reported a 48% drop in profit. Meanwhile, OPEC+ is expected to propose another output hike in June, which analysts warn could worsen market conditions as countries like Kazakhstan boost exports instead of curbing supply.