Tarrif Talks: President Trump’s renewed push for tariffs is creating uncertainty in global markets, with direct implications for West Texas Intermediate (WTI) oil prices. The threat of reinstated tariffs—especially on major trading partners like the EU and Japan—has raised concerns about reduced global demand, which typically pressures oil prices downward. Analysts note that while geopolitical tensions can temporarily boost prices, the broader economic drag from tariffs tends to outweigh those gains. The volatility triggered by Trump’s tariff policies has already shaken investor confidence, leading to market selloffs and increased caution in energy markets. As a result, WTI prices are likely to remain sensitive to further tariff developments, particularly if trade negotiations fail to prevent new levies.

China’s Shandong Raises Fuel Oil Import Tax: The provincial government of Shandong, China’s key refining hub, has increased fuel oil import tax rebates for six independent refineries. This move aims to support these refiners, often called “teapots,” which have been struggling with low profit margins and weak domestic demand. The rebates are expected to improve cash flow and competitiveness for these smaller players. Shandong’s policy shift reflects broader efforts by Chinese authorities to stabilize the refining sector amid economic uncertainty. Analysts believe the rebates could boost fuel oil imports and refining activity in the region. However, the long-term impact will depend on global oil prices and domestic consumption trends. The decision also highlights the challenges faced by independent refiners in navigating China’s evolving energy policies.

Citgo Parent Auction: A U.S. court-appointed officer has recommended a $7.38 billion bid by a Gold Reserve subsidiary as the winning offer in the auction for shares in Citgo’s parent company. This auction is part of a legal process to compensate creditors owed billions by Venezuela. The bid surpasses others, including Black Lion’s $8 billion cash offer and Vitol’s over $10 billion bid, due to its structure and legal viability. Citgo, a major U.S. refiner, is Venezuela’s most valuable foreign asset and has been at the center of a long-running legal battle. The auction process has drawn intense scrutiny due to its geopolitical and financial implications. The final decision will be made by a U.S. court, which must approve the recommendation. If confirmed, the sale could significantly impact Venezuela’s access to international assets and future creditor negotiations.

Market Overview: Oil prices dipped slightly due to uncertainty surrounding potential U.S. tariffs and expectations of increased output from OPEC+. Market participants grew cautious as trade tensions threatened to dampen global demand. Analysts noted that while geopolitical risks remain, the market is increasingly focused on economic fundamentals. The possibility of new tariffs has raised concerns about slower industrial activity and reduced fuel consumption. Meanwhile, OPEC+ is expected to continue its gradual output increases, which could add to supply pressures. Traders are watching closely for signals from upcoming meetings and economic data releases. Overall, sentiment remains mixed as bullish supply factors are offset by bearish demand signals.

In 2024,the U.S. consumed 94 quadrillion BTUs of energy, with 82% coming from fossil fuels and 18% from renewables and nuclear sources. Petroleum remained the dominant energy source, while nuclear energy surpassed coal consumption for the first time. Historically, wood was the primary energy source until the late 1800s, when coal took over, followed by petroleum in 1950. Natural gas, once a waste product, has become the second-largest energy source, widely used for heating and electricity. Hydropower began industrial use in the 1880s, but wind and solar have recently surpassed it in energy contribution. In 2022, renewables overtook nuclear energy, and by 2023, they also surpassed coal. Biofuels became the most-used renewable energy source in 2016, and wind and solar now lead among renewables.