HEAD OF RESEARCH REVIEW
Our last report warned of turbulence ahead, and oil prices have indeed reflected this in the past month. Weakness emerged early in April and again in May, following OPEC+’s decision to return voluntary cut barrels to the market. Brent closed on 31 March at $74.74/bbl and resurfaced above $61/bbl at the time of writing. The macro backdrop remained difficult, with freight activity at US and Chinese ports declining, Chinese manufacturing PMI surveys struggling, and US GDP contracting in Q1. The market has grappled with continued tariff policy uncertainty since President Trump’s “Liberation Day” package, and policy unpredictability is regularly buffeting market sentiment. That much was clear in April when oil received a boost from statements suggesting that the US would not impose a 145% tariff on China forever. Unsurprisingly, the mood was quickly soured by subsequent comments that made progress between the US and China far less tangible. Aside from OPEC+’s decisions to increase supply, at least on paper, indirect talks between the US and Iran continued, suggesting Iranian crude export stability. Yet this too is subject to policy unpredictability. The US imposed new sanctions on various entities tied to Iranian oil while President Trump threatened ‘secondary’ sanctions on any country or entities importing Iranian crude or petrochemicals.
