Oil Prices Dip as Traders Brace for Trump’s Tariffs and Supply Uncertainty

Oil prices fell slightly on Tuesday, with Brent crude down 0.37% to $74.49 per barrel and WTI crude dropping 0.39% to $71.20, after hitting five-week highs. Market uncertainty grew as traders awaited Trump’s announcement of new tariffs, which could disrupt supplies from Mexico, Venezuela, and Canada. Trump also threatened secondary tariffs of 25%-50% on Russian oil buyers, potentially impacting major importers like China and India, while also warning Iran of similar measures and military action over its nuclear program. Meanwhile, Russia ordered Kazakhstan to close two of three moorings at its main oil export terminal, which may lead to production cuts. OPEC+ is expected to proceed with a 135,000-barrel-per-day production hike in May, with traders closely watching the April 5 ministerial meeting. Analysts estimate U.S. crude inventories declined by 2.1 million barrels in the week ending March 28, which could provide some support to prices.

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Russia Cuts Kazakh Oil Exports Amid OPEC+ Dispute, Raising Supply Concerns

Russia has ordered the closure of two out of three moorings at the Black Sea terminal handling Kazakhstan’s oil exports, impacting U.S. firms Chevron and Exxon Mobil, and potentially halving Caspian Pipeline Consortium (CPC) exports, which account for 1% of global supply. The move follows tensions between Kazakhstan and OPEC+ over excess production, as Kazakhstan’s oil output hit a record 2.17 million bpd in March, exceeding its OPEC+ quota. While Kazakhstan’s energy ministry claims oil shipments remain uninterrupted via the third mooring, industry sources suggest production cuts may be necessary within days if the issue persists beyond the five-day storage capacity at the port. The closures, cited as a response to regulatory inspections, come after a Ukrainian drone attack in February on a CPC pumping station and past Russian suspensions in 2022 and 2023 due to damage and storms. CPC had planned to export 1.7 million bpd in April, after exporting 63 million metric tons (1.4 million bpd) in 2024. With CPC's key shareholders including Transneft (24%), Kazakhstan’s KazMunayGas (19%), and U.S. majors Chevron and Exxon Mobil, the situation could further strain global oil markets.

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OPEC+ Expected to Approve Planned Output Hikes Amid Quota Disputes

OPEC+ ministers from eight nations will meet online on Thursday to discuss oil production plans, with sources indicating they are likely to approve a scheduled 135,000 bpd output hike for May. This would mark the second consecutive monthly increase as part of OPEC+'s strategy to gradually unwind production cuts implemented since 2022. The group, which has been cutting 5.85 million bpd (5.7% of global supply), is also pressuring overproducing members to make additional cuts to compensate for exceeding quotas. While some sources expect the plan for gradual output increases to remain unchanged, others suggest the meeting may also review compensatory cuts for those surpassing their targets. The OPEC+ ministerial committee, which can recommend production policy changes, was initially set to meet on April 5 but may now convene on Thursday. OPEC has yet to officially comment on the matter.

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Venezuela’s Oil Exports Drop 11.5% Amid U.S. Tariffs and Sanctions

Venezuela's crude and fuel exports fell 11.5% in March due to new U.S. secondary tariffs and the revocation of key operational licenses, delaying shipments and suspending cargoes. The U.S. imposed a 25% tariff on Venezuelan crude and gas buyers, revoked export authorizations for PDVSA’s foreign partners, and set a May 27 deadline for companies to halt operations, leading to cancellations from China and India. In March, Venezuela exported 804,677 bpd of crude and fuel, down 7.8% from the previous year, with China receiving 483,700 bpd, the U.S. 210,700 bpd, India 60,160 bpd, and Cuba 50,130 bpd. Over 80 vessels remained in or near Venezuelan waters, with 35 laden but yet to depart, as companies await clarity on U.S. enforcement. Analysts predict these measures will significantly impact Venezuela’s economy, similar to the 2020 sanctions, though the country may seek alternative export routes through Asia via third-party intermediaries. European buyers are currently scheduling what could be their final shipments before the sanctions deadline.

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Repsol Tanker Cancels Venezuelan Load After US Revokes Export Licenses

A Repsol-chartered Suezmax tanker, the Monte Serantes, has canceled its planned loading of Venezuelan crude at the Jose terminal after the U.S. revoked oil export licenses for Spanish energy company Eni and France's Maurel & Prom. The tanker instead docked in Mexico to load Maya crude. This follows the U.S. Treasury Department's decision to halt operations involving Venezuelan oil for these companies, with a deadline set for May 27. The move is part of U.S. sanctions that also include a 25% tariff on countries importing Venezuelan oil. The sanctions have already caused significant disruptions in Venezuela's oil exports, with fewer vessels loading at key terminals.

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California's Surge in Canadian Oil Imports Driven by Pricing and Tariff Concerns

U.S. West Coast refiners imported a record 224,000 barrels of Canadian oil per day last month, a 42% increase from February, according to data. This surge is fueled by favorable pricing of Canadian heavy crude and concerns over potential U.S. tariffs on Canadian oil. The shipments came via the expanded Trans Mountain pipeline, which transports crude from Alberta’s oil sands to Vancouver. U.S. refiners stockpiled Canadian oil in anticipation of a 10% tariff by President Donald Trump. Meanwhile, the U.S. Gulf Coast saw Canadian oil prices rise due to sanctions on Venezuela, while eastern Canadian crude exports to the U.S. dropped amid tariff risks, with more shipments rerouted to Europe.

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China’s Oil Demand to Rise 1.1% in 2025, But Transportation Fuel Use Peaks

China’s oil consumption is expected to increase by 1.1% to 765 million metric tons in 2025, driven by stronger-than-expected economic growth and rising petrochemical demand, according to CNPC’s think tank. Petrochemical demand is set to grow as China’s per-capita plastic consumption remains around 60% of developed countries, with electric vehicles (EVs) further boosting plastic usage due to their higher reliance on lightweight materials. However, transportation fuel consumption has peaked, as alternative energy sources, including EVs and LNG trucks, are projected to exceed 30% and 15% market share, respectively, by 2030.

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Russia’s Arctic Shipping Faces Ice Challenges Until 2050, Despite Warming Expectations

Russia does not expect significant changes to the ice cover along the Northern Sea Route (NSR) until 2050, despite global warming concerns. Sergey Zybko, head of the NSR administration, stated that the ice conditions have been worsening in recent years, affecting the route used by Russian ships heading to Asia as an alternative to the Mediterranean and Suez Canal. The NSR’s importance has grown since Russia's oil exports have shifted to Asia following the 2022 EU sanctions due to the Ukraine invasion. President Putin recently visited Murmansk’s Atomflot, which manages the country’s icebreaker fleet, despite sanctions from the EU, US, and UK. Although global warming is discussed widely, research from Arctic & Antarctic Research Institutes shows no major changes in ice cover until 2050. The Arctic’s potential ice-free period by the 2030s, suggested by a June 2023 paper, contrasts with Russia’s stance. Russia's icebreaker fleet, especially nuclear-powered ones, is essential for making the NSR a viable transport route for oil and gas exports to Asia. The NSR, 3,500 miles long, offers a shorter route to China compared to the Suez Canal, cutting journey time by 10 days.

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NYK Acquires Eneos Shipowning Venture in $508 Million Deal to Expand LPG Carrier Fleet

Japanese shipping giant NYK has completed a ¥76 billion ($508 million) deal to acquire 80% of NYK Energy Ocean Corporation (NEO) from Eneos Ocean Corp. The deal strengthens NYK’s position as one of the world’s largest LPG carrier operators. The NEO fleet includes 18 LPG units, 18 chemical and product tankers, and 11 bulk carriers, adding to NYK's existing 16 LPG carriers. Eneos retains a 20% stake in the venture. This acquisition aims to enhance NYK’s LNG/LPG carrier business, with synergies expected from the transfer of more than 100 employees and a high-quality fleet. NEO, based in Yokohama, will continue to focus on safe and efficient marine transport, benefiting from NYK's scale to improve cost competitiveness and quality control.

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Panama Canal Introduces Guaranteed Slot for Net-Zero Vessels to Encourage Sustainability

The Panama Canal Authority (ACP) is launching a "Net-Zero Slot" starting 5 October to promote the use of low-carbon ships. This initiative reserves a passage for neo-panamax vessels with dual-fuel engines using bunkers with carbon intensity below 75 grams of CO2 equivalent per megajoule. Unlike previous auctions, the slot will be allocated through a competition 30 days before the scheduled transit. The initiative aims to incentivize investment in more energy-efficient vessels and supports global decarbonization goals. ACP's commitment to sustainability also complements other recent efforts, including the introduction of long-term transit slot sales.