U.S. Energy: Just 100 days into President Donald Trump’s second term, oil prices have fallen over 20%, dropping below breakeven levels for many U.S. producers due to investor concerns over tariffs and policy uncertainty. Despite Trump's push for energy dominance and early efforts to boost domestic output, his protectionist trade policies have dampened global oil demand and hurt market confidence. U.S. crude has declined to around $60 per barrel—below the $65 needed for profitability especially after Trump’s April 2 tariff announcement. International sanctions and OPEC+ output increases have further destabilized prices. As a result, U.S. producers are slowing drilling activities,

China: China has quietly waived the 125% tariff on U.S. ethane imports that was imposed earlier this month, according to unnamed sources. This exemption will ease costs for Chinese petrochemical companies and help U.S. producers find a market for ethane, a byproduct of shale gas. The waiver, not yet officially announced, is part of a broader move by Beijing to reduce the economic strain of its trade tensions with the U.S., which has included exemptions on other goods like pharmaceuticals and semiconductors. China had imposed the steep tariff in retaliation against U.S. trade measures, despite being the largest buyer of U.S. ethane, accounting for nearly half of its exports. U.S. ethane exports reached a record 492,000 barrels per day in 2024, and are projected to continue growing through 2026.

OPEC+: OPEC+ is experiencing internal tensions due to some members exceeding their oil production quotas, leading to concerns about the group's cohesion and market stability. Kazakhstan, for instance, produced 1.85 million barrels per day (bpd) in March, surpassing its 1.468 million bpd target, prompting Saudi Arabia to consider increasing its output and reducing prices in response. This defiance threatens to disrupt the alliance's strategy to maintain Brent crude prices between $70 and $90 per barrel, a range crucial for Saudi Arabia's budgetary balance. In light of these developments, OPEC+ is contemplating another production increase for June, following a significant 411,000 bpd rise in May, which was three times higher than initially planned. A meeting involving eight OPEC+ countries is scheduled for May 5 to finalize the output plan for June, with discussions expected to focus on the pace of production increases and the group's overall strategy.

Market Overview: Oil prices continued to fall on Wednesday, heading for their largest monthly drop in over three years due to the global trade war and growing concerns about oversupply. U.S. West Texas Intermediate crude dropped to $60 a barrel, with Brent and WTI down roughly 15–16% for the month—marking the steepest decline since November 2021. Prices tumbled sharply following President Trump's April 2 tariff announcement, which triggered retaliatory measures from China and intensified fears of a global recession. Economic indicators reflected the strain, with China’s factory activity hitting a 16-month low and U.S. consumer confidence falling to a five-year low. Meanwhile, expectations of increased output from OPEC+ and rising U.S. crude inventories added further downward pressure on oil markets.

In 2024, U.S. imports of petroleum products declined by 210,000 barrels per day (b/d), averaging 1.8 million b/d, with reductions seen in all major transportation fuels and unfinished oils. Motor gasoline remained the largest imported petroleum product, at 651,000 b/d, accounting for 36% of imports, though this was 75,000 b/d less than in 2023. Despite steady gasoline consumption, U.S. inventories declined in 2024, reflecting reduced imports. The U.S. exported 226,000 b/d more gasoline than it imported, continuing its status as a net exporter of gasoline since 2016. Most petroleum exports come from the Gulf Coast, where high refinery output and access to ports support international shipments, though infrastructure limits prevent nationwide distribution. As a result, some regions rely on imports rather than domestic transport from the Gulf Coast. The top gasoline import sources in 2024 were Canada, the Netherlands, India, the UK, and South Korea, with Canada playing a key role in supplying northeastern states.

Oil prices dropped sharply on Wednesday, marking their biggest monthly decline in over three years due to Saudi Arabia signaling increased production and a weakening demand outlook from global trade tensions. West Texas Intermediate (WTI) crude fell 18% for the month, as Saudi Arabia indicated it may not support further supply cuts and could prioritize regaining market share. This raised fears of a renewed oil price war among major producers, especially with Saudi Arabia pushing for higher OPEC+ output. The U.S.-China trade war further dampened oil demand and contributed to recession fears, with U.S. economic data showing a Q1 contraction and falling consumer confidence. Despite these pressures, U.S. crude inventories unexpectedly declined due to strong export and refinery demand, which helped limit further price losses.