The Jun’25 Brent Futures rallied up to $64.36/bbl this morning at 07:47 BST before quickly falling to $63.44/bbl at 09:03 BST and again to $62.89/bbl at 10:10 BST. Prices have since seen some support moving up to $63 .61/bbl at 11:38 (time of writing). China trade tensions and OPEC+ supply plans have shaken markets, with Brent falling to its lowest since 2021 and worries of recession have lead oil-dependent governments scrambling to respond. Some preparing to cut spending and others turning to debt to offset falling revenues. Countries like Saudi Arabia, Iraq, and Nigeria are now earning far less than needed to balance budgets; the IMF says Riyadh needs over $90/barrel to break even. Brazil is planning an emergency oil auction, while Kuwait and Saudi Arabia are eyeing bond markets. In Russia, economic pressure is mounting despite inflation, and in Venezuela and Iran, the oil crash combines with US sanctions to create a financial “double whammy” said Jason Tuvey, deputy chief emerging markets economist at Capital Economics. Saudi Arabia is set to boost oil exports to China to 48 mb in May, up from 35.5 mb this month, after the price of Arab Light for Asia was cut by $2.30/bbl. In other news, the EIA has cut its global oil demand and price forecasts through 2026, warning that escalating tariffs and trade tensions are clouding the economic outlook. The EIA now expects oil demand to grow by just 900 kb/d in 2025, down from the previous 1.2 mb/d estimate. Finally, the front month Jun/Jul spreads and 6-month Jun/Dec spreads re at $0.60/bbl and $1.68/bbl respectively.
