Oil Prices Drop as Middle East Risks Ease and Supply Concerns Persist

Oil prices fell by over $2 per barrel on Friday, posting a weekly decline as Middle East tensions eased and uncertainty remained over a Ukraine peace deal. Brent crude settled at $74.43 per barrel, down 2.68%, while WTI closed at $70.40, a 2.87% drop. Analysts attributed the decline to the Gaza ceasefire holding, along with reports of a new coronavirus discovery in bats by Chinese researchers. U.S. crude stockpiles rose due to refinery maintenance, while Baker Hughes reported a continued increase in oil and gas rigs. Despite losses, supply concerns limited the decline, as Russia reported a 30-40% reduction in Caspian Pipeline Consortium oil flows following a Ukrainian drone attack. Analysts suggested that tensions between Ukraine and former U.S. President Trump, along with speculation over easing Russian oil sanctions, could further impact global markets.

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EU Seeks More U.S. Gas and Renewables to Cut Russian Energy Dependence

The European Union plans to increase gas imports from the U.S. and other suppliers while accelerating renewable energy expansion to eliminate Russian fossil fuel reliance by 2027. Despite a sharp decline in Russian pipeline gas imports, the EU increased purchases of Russian liquefied natural gas (LNG) last year, prompting calls for alternative sources. EU energy commissioner Dan Jorgensen emphasized reducing payments to Russia and ensuring cheaper, non-Russian energy while also expediting renewable energy projects. With European gas prices hitting two-year highs and U.S. President Trump warning of trade tariffs unless the EU imports more American energy, Brussels is exploring long-term LNG contracts and infrastructure investments. The EU also plans stricter gas market controls to prevent price speculation and financial mechanisms to decouple electricity prices from gas costs. While European gas contracts must end by 2049 under the EU's net-zero target, short-term measures aim to stabilize prices and secure supply diversity.

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Campaigners Urge EU to Tighten Sanctions on Russia’s Shadow Fleet to Reduce Revenue

Campaigners are calling for the European Union to step up sanctions against Russia’s shadow fleet to curb its oil revenue, which has only dropped by 8% since the invasion of Ukraine, according to a report by the Centre for Research on Energy and Clean Air (Crea). The EU is expected to announce new sanctions targeting over 70 ships, bringing the total to more than 150. Crea claims Russia has relied on 558 shadow fleet tankers to transport oil, accounting for 61% of its $83bn in annual seaborne oil exports. The report suggests blacklisting more ships would weaken Russia’s oil trade and could re-establish the effectiveness of the oil price cap, which has failed due to widespread evasion. Crea recommends reducing the price cap from $60 to $50 or $30 per barrel, estimating this could cut $32.8bn or $68.7bn from Russia’s revenue, respectively. However, any change to the cap would require US approval, which has hindered unified action against Russia.

[SLOW] Oil Market _ North Sea Oil Price

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Iraq to Receive 185,000 Barrels of Oil Daily as Kurdistan Exports Resume

Iraq is set to receive approximately 185,000 barrels of crude oil per day from Kurdistan as the region prepares to restart its oil exports via a pipeline to Turkey. The Iraqi oil ministry confirmed the resumption of exports but did not provide a specific date for when it will happen. The current export capacity from Kurdistan stands at 300,000 barrels per day, with 185,000 barrels allocated for export and the remainder for domestic consumption. The pipeline, which was halted in March 2023 following a legal dispute, is undergoing preparations for its reopening, and Iraq is awaiting a response from Turkey regarding its readiness. Although the pipeline was initially shut due to a court ruling, Turkey has expressed its readiness to restart the flow, pending Iraq’s decision.

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U.S. Pressures Iraq to Resume Kurdish Oil Exports Amid Sanctions Threat

The U.S. is pressuring Iraq to restart Kurdish oil exports of over 300,000 barrels per day (bpd) to Turkey, warning of sanctions as part of Trump's effort to cut Iran’s 2 million bpd oil exports to zero. Iraq announced plans to resume exports next week after a two-year halt, but unresolved financial and technical issues persist, including a $1.5 billion ICC-ordered payment from Turkey to Iraq. The 2023 pipeline closure led to an estimated 200,000 bpd of Kurdish crude being smuggled to Iran and Turkey, which the U.S. urges Iraq to curb. Norwegian oil firm DNO seeks clarity on payments, including $300 million owed for pre-shutdown deliveries, while OPEC+ compliance concerns arise if increased Kurdish flows push Iraq over its production cap. Turkey has yet to receive formal confirmation, and analysts suggest that while resuming exports could stabilize prices, it would only partially offset lost Iranian supply. The restart remains uncertain due to financial disputes, geopolitical tensions, and logistical hurdles.

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Guyana's Oil Output Drops to 620,000 Bpd in January

Guyana's oil production decreased to 620,000 barrels per day (bpd) in January, down from 656,000 bpd in December, marking the lowest output since August, according to the Ministry of Natural Resources. The drop was attributed to a fall in output from the consortium led by ExxonMobil, which controls the country's oil production via three floating production facilities. Despite the decrease in January, Guyana's oil output increased overall in 2024, reaching 616,000 bpd, up from 391,000 bpd in 2023, thanks to upgrades and ramped-up operations at the Prosperity vessel. The government reported $230 million in oil revenue for January and forecasts $2.5 billion for 2025, a slight decline due to lower crude prices. Additionally, a fourth producing vessel is on its way to Guyana, expected to raise production capacity to around 940,000 bpd by the third quarter. The country's oil sector remains a significant contributor to its strong economic growth.