Reports

On Monday, the Apr’25 Brent futures flat price opened higher from Friday’s close, at $75/bbl, and has trended higher, reaching $75.50/bbl by 10:30 GMT (time of writing). The market is becoming sanguine in relation to tariff announcements and might be less reactive considering the possibilities of either a deal being reached or an escalation. ICE and CFTC COT data indicate a reduction in length in both Brent and WTI futures in the week ending 04 February, as their combined net position fell by 64mb (-13%) w/w. In the news, BP shares surged 7% to their highest since August after activist investor Elliott Management took a stake, fueling speculation about potential board changes and strategic shifts ahead of BP’s Capital Markets Day later this month. Nigeria’s Dangote Refinery is set to reach full capacity in 30 days after resolving crude supply challenges, with plans to expand into new markets, including supplying jet fuel to Saudi Aramco. Iran has vowed to counter Trump’s renewed “maximum pressure” campaign aimed at slashing its oil exports, arguing that similar efforts in the past have failed, even as new U.S. sanctions target entities facilitating Iranian crude shipments to China. Finally, the front (Apr/May) and 6-month (Apr/Oct) Brent futures spreads are at $0.45/bbl and $2.71/bbl respectively.

The Apr’25 Brent futures contract crept up overnight and has continued to improve this morning, rising from $74.30/bbl at 0100 GMT to reach $74.92/bbl at 1015 GMT (time of writing) after meeting resistance around $75.00/bbl in the past couple of hours. Private oil refiners in China cut rates to 43.64%, the lowest since March 2020, as US sanctions on Russian crude disrupt their key supply of ESPO oil and high freight costs are squeezing refiners across Asia. Iran’s Foreign Ministry condemned new US sanctions as unjustified and illegal, holding Washington accountable for the consequences. The sanctions target entities in China, India, and the UAE for allegedly aiding Iran’s oil trade, reinforcing the Maximum Pressure campaign against Tehran. The transit of Russian oil through the southern Druzhba pipeline via Ukraine fell 15% in 2024 to 11.5 million mt. Hungary’s imports remained steady at 4.8 million mt, while Slovakia and Czechia saw declines. Germany and Poland stopped buying Russian oil in 2023, with Germany now receiving 1.5 million mt from Kazakhstan via the northern Druzhba route. At the time of writing, the Apr/May and 6-month (Apr/Oct) Brent Futures spreads are at $0.49/bbl and $2.62/bbl respectively.

The Apr’25 Brent futures contract has seen a volatile morning, trading up from a low of $74.62 at 7:51 GMT to $75.06 at 9:56 GMT followed by a drop to $74.84 before rallying up to $75.24 at the time of writing (10:23 GMT). In headlines, Chevron is in talks with the Trump administration following pressure from top Republican officials, including Secretary of State Marco Rubio, to exit Venezuela. Critics argue Chevron’s operations there financially sustain President Nicolás Maduro’s regime, which has faced US sanctions for human rights violations. Chevron, the only major oil producer operating in Venezuela under a waiver, contributes about 20% of the country’s oil production, nearing Maduro’s target of 1 mb/d. Meanwhile, Chinese refiners are seeking alternative oil sources from the Middle East and Africa after Beijing imposed tariffs on US crude in response to Trump’s import tax hike on Chinese goods. Chinese state majors may need to replace around 200 kb of US crude daily, according to Energy Aspects. At the time of writing, the front (Apr/May) and 6-month (Apr/Oct) Brent Futures spreads are at $0.54/bbl and $2.96/bbl respectively.

The Apr’25 Brent futures flat price came off below $76/bbl Wednesday morning, falling to lows of $75.40/bbl by 10:25 GMT (time of writing). Following the price spike after Trump reinstating his ‘maximum pressure’ campaign against Iran, market participants have been selling into the high and fading the rally. In the news, TotalEnergies raised its dividend and maintained $2 billion quarterly buybacks despite a 16% drop in Q4 earnings, attributing resilience to strong LNG and power business performance amid weaker oil prices and refining margins. Trans Mountain anticipates increased interest in its 890kb/d pipeline system if the U.S. imposes tariffs on Canadian oil, potentially boosting shipments to Asia as an alternative export route. Tanker stocks surged as Trump’s pledge to tighten restrictions on Iran’s oil trade raised concerns over reduced vessel supply, further boosting a market already impacted by Russian sanctions. Beneficiaries included US-listed Teekay Tankers Ltd, Scorpio Tankers Inc, Frontline Plc, and Tokyo-listed Mitsui OSK Lines Ltd. Equinor scaled back its renewable energy targets and investment just months after acquiring a $2.3 billion stake in Orsted, shifting focus back to oil and gas amid industry-wide pullbacks in offshore wind. Finally, the front (Apr/May) and 6-month (Apr/Oct) Brent futures spreads are at $0.57/bbl and $3.12/bbl respectively.

The Apr’25 Brent futures contract softened overnight, from $75.55/bbl at 0400 GMT to $75.05/bbl at 10:33 GMT (time of writing). China has retaliated against Trump’s tariffs with a 15% levy on US liquefied natural gas and coal, a 10% tariff on crude oil, and export limits on key minerals like tungsten and molybdenum. Additional tariffs will also apply to US farm equipment and certain cars. OPEC’s oil production fell by 70 kb/d in January to just over 27 mb/d, primarily due to a fire at Iraq’s Rumaila oil field, which temporarily cut output by 300 kb/d. Despite this, Iraq’s total production averaged over 4mb/d, aligning with its OPEC quota. Pakistan has signed a $1.2 billion oil import deferral agreement with the Saudi Fund for Development to ease its fiscal burden and ensure a stable petroleum supply. Saudi Arabia’s non-oil business sector grew at its fastest pace in over a decade in January, driven by strong new orders and business activity. The Riyad Bank PMI rose to 60.5 from 58.4 in December, its highest level since September 2014. At the time of writing, the Apr/May’25 and Apr/Oct’25 Brent futures spreads stood at $0.63/bbl and $3.09/bbl, respectively.