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Insight Weekly Market Report Market Report - 08.04.2025

Market Report Week 15 - 08.04.2025

Other insights Apr. 08, 2025
Market Report Week 15 - 08.04.2025 Download the full report

OPEC+ and Trump a bad combination for oil prices


It has been a very hectic week since our last issue in oil and bunker markets, and unsurprisingly, Trump once again took the limelight. More surprisingly, OPEC+ also added to the bearish market sentiment.
On Thursday and Friday, we experienced the most significant percentage drop in oil prices since March 2022, when Brent prices fell from above USD 75 to below USD 65. 


We have also seen that the support level at USD 70 has effectively collapsed. The latter implies we are in unchartered territory regarding Brent oil prices in the short term.

In today's issue, we take a closer look at:

  • the impact of the US tariffs announced this week
  • the OPEC+ decision to add more oil to the market May 1
  • China retaliated and added 34% tariffs on US goods
  • Potential factors that could break this negative spiral for oil prices 

Bunker Port Brief

ARA

LSMGO is very tight and discounts are lower than we have seen last few weeks. 

Fujairah

This week has seen very strong demand across all grades.
Barge avails are good and weather is stable.
Biofuel options are plentiful versus weak demand. 

Houston

Market has fallen significantly since in the aftermath of the global tariff announcement last week. Flat prices are down close to 60+ /mton or more in some instances. Floating price premiums have held up vs their respective indexes. Demand remains lighter than normal. 
Delays offshore and at Bolivar Roads anchorage due to winds and seas swell persists. Delays at these locations should be anticipated when fixing. 

New York

HSFO demand on contract is steady. VLSFO demand on contract is heavy. LSMGO demand muted. Spot demand on USEC is muted. 

Panama

Seeing more demand with market dropping.

Gibraltar

Market at a low, seeing premiums increase to try to stabilize from supplier side.

Port Louis

The quiet demand remains in the Southern African region, with many indication requests, whilst clients wait to go firm.

Durban

A quiet week in Durban with tepid overall demand.

Walvis Bay

Stagnant demand in the region with minimal queries in the falling market; buyers waiting for a possible further bottom.

For port availability and demand, download the full report here. 

1. US announces high tariffs, notably on oil-intensive Asia

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This week's Trump tariffs hit oil-intensive Asia harder than even the most pessimistic had expected. China alone is facing tariffs of 34% in addition to the 20% already in effect. There is also an extra 25% on cars and metals such as aluminium.
Countries like Vietnam, Taiwan, and Indonesia are subject to tariffs of 46%, 32%, and 32%, respectively. 
The tariffs come at a time when the US industrial economy is out of balance. Last week's ISM indicator showed that significant inventories have been built ahead of the tariffs while order intake is plummeting. This could lead to a steep decline in US industrial output as there is no incentive to produce if inventories are full and private consumption is lacklustre. 
The tariffs are negative for oil products, gas oil, and diesel cracks, as they are typically sensitive to economic slowdowns. 
Regarding fuel oil, we can also expect lower cracks—both for HSFO and VLSFO—as reduced trade activity may affect demand from the maritime sector.

2. The OPEC+ decision to add more oil to the market May 1

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Last Thursday, amid oil sell-offs and market turmoil, OPEC+ announced that it will not only increase oil production in May by the 138,000 barrels per day outlined in its plan. Instead, the cartel has decided to bring forward the production increases scheduled for June and July, so OPEC+ will add 411,000 more barrels per day starting next month. This is three times more than expected.
According to several media sources, the significant production increase is due to Saudi Arabia's frustration with quota violators—including Kazakhstan, Iraq, and Russia—who had pledged compensation cuts but failed to deliver. Now, all member countries are allowed to produce more. The production increase may also be a concession to Trump, who has called for oil to trade at USD 50. 

3. China retaliated and added 34% tariffs on US goods

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China announced on Friday that it will impose a 34% tariff on all US goods, effective April 10, 2025, in retaliation to recent US tariff increases. This significant escalation could, if prolonged, lead to a US recession and substantially weaken the Chinese economy.
Brent crude oil prices fell further on the announcement. 
The retaliation triggered major financial turmoil on Friday afternoon and on Monday, with banks likely to come under severe selling pressure due to fear of credit losses.
Financial markets are experiencing significant stress, and it's anticipated that banks, hedge funds, and commodity trading advisors (CTAs) will continue to de-risk across all assets. The uncertainty surrounding the US response adds to market volatility, prompting the liquidation of long positions in oil.

4. Potential factors that could break this negative spiral for oil prices include:

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Negotiations: President Trump indicating readiness to negotiate and possibly rolling back tariffs to demonstrate commitment to resolving trade tensions.
Central Bank Interventions: Official statements from the Federal Reserve and the European Central Bank expressing readiness to inject liquidity if market stress escalates.
OPEC+ cancelling plans to add more oil: However, given the latest announcement, no change in OPEC+ seems imminent.

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Price forecast


Below is our oil and bunker price forecasts. We have lowered our Brent oil price forecasts in light of the latest trade-war escalations and the OPEC+ announcement to accelerate the return of oil to the market. 

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