Trade War: The risk of a global trade war is limiting oil price gains after President Trump ordered officials to study reciprocal tariffs on countries that impose tariffs on U.S. goods. Analysts warn that oversupply concerns persist, with potential U.S. tariff impacts on demand growth and the possible easing of Russian sanctions adding uncertainty. OPEC+ is reportedly considering delaying planned supply increases, though Russian Deputy Prime Minister Novak denied such plans. Crude prices found support from a weaker U.S. dollar and reduced oil flows via the Caspian Pipeline Consortium (CPC) after a drone attack on a Russian pumping station. Meanwhile, U.S. energy firms have increased oil and natural gas rig counts for the third consecutive week, marking the first such trend since December 2023.

Ukrainian Drone Strike: A Ukrainian drone strike hit a pumping station on Kazakhstan’s main oil export pipeline in Russia, reducing flows to the Black Sea port of Novorossiisk. The Caspian Pipeline Consortium (CPC) confirmed the attack on the Kropotkinskaya station in Russia’s Krasnodar region, halting operations to assess the damage. A Ukrainian security source claimed responsibility, stating that both the pumping station and a nearby oil refinery were targeted for supporting Russia’s military. The CPC pipeline, crucial for Kazakhstan’s oil exports, is partly owned by U.S. energy giants Chevron and ExxonMobil. The attack occurred just a day before U.S. Secretary of State Marco Rubio and Russian Foreign Minister Sergei Lavrov are set to discuss the Ukraine war in Saudi Arabia.

Chevron Workforce Slash: Chevron announced plans to cut 15% to 20% of its workforce as part of a cost-reduction strategy aiming to save $2 billion to $3 billion by the end of 2025. With a workforce of 45,600 employees as of late 2023, the cuts could result in more than 9,000 layoffs. The company cited the need for long-term competitiveness, with Vice Chairman Mark Nelson emphasizing support for affected employees. Chevron’s stock dropped slightly on Wednesday, despite being up 7% for the year, as the company missed fourth-quarter earnings expectations due to declining refining margins. Additionally, its $53 billion acquisition of Hess Corp. faces uncertainty due to arbitration with Exxon Mobil, while the company is also in the process of relocating its headquarters to Houston.

Market Overview: Oil prices are mostly stable as investors monitored potential progress on a Russia-Ukraine peace deal that could ease supply disruptions. U.S. West Texas Intermediate crude fell slightly by 5 cents to $70.69 per barrel. The market focused on peace talks after U.S. President Donald Trump announced that discussions with Russia had begun. Analysts suggested that oil prices could drop if sanctions relief allows Russian exports to flow more freely. They also warned that global refining margins, especially for diesel, could decline further under reduced sanctions. Trump stated on Sunday that he expects to meet with Russian President Vladimir Putin soon to negotiate an end to the conflict. Meanwhile, the U.S. and Russia are preparing for initial talks in Saudi Arabia in the coming days.

The chart illustrates the annual change in petroleum and other liquids production from 2023 to 2026, distinguishing between OPEC+ and non-OPEC+ producers. Non-OPEC+ production is projected to grow steadily each year, with the highest increase occurring between 2024 and 2025. In contrast, OPEC+ production saw a significant decline in 2023–2024, followed by a slight increase in 2024–2025 and a more moderate rise in 2025–2026. This suggests that non-OPEC+ countries are driving global production growth, while OPEC+ is recovering from earlier cuts. Overall, the data indicates a shift in production dynamics, with non-OPEC+ supply playing a growing role in global oil markets.   

Oil prices remained steady as investors monitored potential Russia-Ukraine peace talks that could ease sanctions and increase global supply. U.S. West Texas Intermediate crude rose to $71.19 a barrel, with trading subdued due to the Presidents Day holiday. Analysts suggested that sanctions relief could lower oil prices by $5 to $10 per barrel, while refining margins might also decline. President Donald Trump indicated he could soon meet with Russian President Vladimir Putin to discuss ending the war, prompting emergency talks among European leaders. Concerns over a potential global trade war also weighed on market sentiment after Trump’s directive on reciprocal tariffs. Meanwhile, crude prices received support after a drone attack on Russia's Kropotkinskaya pipeline pumping station reduced oil flows from Kazakhstan. Analysts warned that while recent drone attacks have had limited disruption, their increasing frequency could pose future supply risks.