Oil market fundamentals return with aplomb

The oil futures slide began even before Iran's muted response to the US bombing of its nuclear sites had ended on Monday. And the benchmarks tanked further still once a ceasefire between Israel and Iran took effect in the following session. 

That's because oil market fundamentals took hold the moment de-risking started, evaporating the so-called risk premium double quick. 

Prior to this week's declines, oil futures had risen 20% month-over-month. Those price gains have now almost entirely been lost. And so much so for the outlandish claims that Iran may shut the Strait of Hormuz, which was never going to happen as yours truly noted in a column for Forbes. 

Since the start of hostilities on June 13, the Oilholic has always maintained that if there was a swift end to the conflict - as has been the case - price will fall rapidly again. That's because the market remains well supplied with plenty of non-Middle Eastern, non-OPEC crude from Brazil, Canada, Guyana, Norway, and indeed - the US - still the world's number 1 producer of oil. 

If you believe global oil demand growth for 2025 to be in the region that's just a smidge north or south of 1 million barrels per day, that can be serviced by growth in non-OPEC production alone. And OPEC+ led by the Saudis and Russians is also pumping more in a fight for market share. 

It all points to a market surplus come the end of 2025, especially for light sweet crude. That itself points to oil prices heading lower, perhaps even below $60! Well that's all for the moment folks! More musings to follow soon. Keep reading, keep it here, keep it 'crude'! 

To follow The Oilholic on Twitter click here.

To follow The Oilholic on Forbes click here.

To follow The Oilholic on Energy Connects click here.

To email: journalist_gsharma@yahoo.co.uk  

© Gaurav Sharma 2025. Photo: Oil pump jack building block model at the AVEVA World 2023 Conference, Moscone Center, San Francisco, US © Gaurav Sharma, October 2023.

A crude view from Abu Dhabi as oil price spike cools

As the Oilholic hopped across from Doha to Abu Dhabi on Monday it became evident that a further (read dramatic) spike in oil prices was not going to materialize.

It was helped in no small part by a report in the Wall Street Journal claiming that the Iranians - battered by precision Israeli bombing that began on Friday - were keen to get back to the negotiating table to end hostilities and resume discussions over their nuclear program. 

It meant the Brent futures rally slowed quite significantly with the global proxy benchmark sliding below $75 per barrel instead of heading toward $80-levels. The report was met with some scepticism but it needn't have been. 

In fact, informed sources both in Qatar as well as the UAE tell yours truly that Tehran is asking its Arab intermediaries to broker a cooling down of the daily barrage of attacks with much more fervor than the story suggests, provided the US doesn't join Israel in its campaign against Iran.  

Traders took the cue from that, much to the consternation of market bulls. That's because were market sentiment to switch from "Israel is now attacking Iran's oil facilities" back to the negotiating table, normal market fundamentals would start applying, and that would mean even $70 levels would not be worth holding on to. 

More musings to follow soon folks. Keep reading, keep it here, keep it 'crude'! 

To follow The Oilholic on Twitter click here.

To follow The Oilholic on Forbes click here.

To follow The Oilholic on Energy Connects click here.

To email: journalist_gsharma@yahoo.co.uk  

© Gaurav Sharma 2025. Photo: A view of Abu Dhabi from Qatar Airways QR 1044 © Gaurav Sharma, June 2025. 

State of play ahead of heading out to the Middle East

Doubtless you couldn't have escaped an escalation of tensions in the Middle East after Israel attacked Iranian nuclear and military sites early on Friday, and Tehran inevitably responded. 

The two have sparred before including last year. But as yours truly contemplates this - over a pre-departure negroni at a Heathrow Airport lounge ahead of a trip out to the region whilst waiting for BA 123 to Doha, followed by Abu Dhabi for a speaking engagement - something feels different this time around. 

For starters, last time Israel and Iran sparred, the former left the latter's oil and gas infrastructure intact. But that doesn't appear to be the case this time around. Over the last 24 hours, Israel has attacked the Shahran oil depot in Tehran. It has also attacked two of Iran’s gas fields, including Phase 14 of South Pars so far.

This clearly indicates that the Israelis no longer see Iran's energy infrastructure as off limits. Worse may (or may not) yet follow as the Oilholic said in a BBC interview on Friday. 

And here's more detail on some of the potential worst case scenarios for the oil markets in your's truly's latest Forbes missive, including, yes, the not-so-likely-at-all possibility of Iran attempting to close the Strait of Hormuz in a fit of consternation. 

But there will be wider near-to-medium-term implications for the oil market and you can fully expect oil futures to post a(nother) near-term spike next week, especially given Israel's attacks on the Iran's oil and gas sites. 

It is just as well that there is plenty of shall we say non-OPEC, non-Middle Eastern oil out in the market as the Oilholic said in an Al Jazeera interview prior to all hell breaking loose. 

Consumers could well have been looking forward to an easing in prices at the pump were it not for this development. 

Where it goes from here is anybody's guess - but if this calms down, it won't take long for market fundamentals to return and drag oil prices lower! The Oilholic knows it feels a million miles away from there right now, but things can change in an instant because that's the nature of the cyclical volatility of the oil market. 

In the interim, as the old British saying, or shall we say the old adage, goes - Keep calm and carry on! More musings to follow soon folks. Keep reading, keep it here, keep it 'crude'! 

To follow The Oilholic on Twitter click here.

To follow The Oilholic on Forbes click here.

To follow The Oilholic on Energy Connects click here.

To email: journalist_gsharma@yahoo.co.uk  

© Gaurav Sharma 2025. Photo I: A delicious negroni at British Airways First Lounge, London Heathrow Airport © Gaurav Sharma, June 2025. Photo II: Energy Analyst Gaurav Sharma on BBC World Service © BBC News, June 2025. Photo III: Energy Analyst Gaurav Sharma on Al Jazeera English © Al Jazeera, June 2025. 

OPEC+, uptick in crude prices & more

For crude traders, the month of June began exactly the way May did - with another 411,000 bpd production hike by OPEC+. 

The move was almost entirely priced in by the global market. And if anything else, prices actually rose a bit to clawback the ground lost in the wake of the Trump Tariffs kerfuffle in April. 

Overall, the crude price - using Brent as a benchmark - is still down by double digits on last year. 

Of course, there are different opinions out there in the market, but respectfully the Oilholic sees little reason to be overtly bullish on oil prices as things stand. 

Here's yours truly's Forbes post on OPEC's move and its wider implications with another hike - most likely - coming in for August from the producers' group. 

All things considered, with the hedges of US shale players not rolling off for another six months in many cases (and as high as 18 months in the case of some), this blogger expects the market in 2025 to be in surplus. 

Furthermore, as The Oilholic noted in an interview with Asharq Bloomberg Business News last week, this isn't just about OPEC+ versus US shale production. 

The market can (and will continue to) expect additional barrels from Canada, Brazil, Guyana and Norway too. 

On balance, we're looking at an oil market surplus in 2025, especially for light sweet crude. 

This then does beg the age-old question (again) - what about investment in oil and gas in the current market and macroeconomic climate? We're in retreat from the Covid-years of frowning upon oil and gas investments to somewhat of a panic on the need for it to ensure security of supply in the energy transition era.

According to the IEF, around $740 billion a year is needed in investments to the end of the current decade assuming a global demand figure north of 100 million bpd. But in 2024, we didn't even cap $600 billion worth of oil and gas investments. So is the industry investing enough? It's what yours truly asked in his latest Energy Connects column (available here). 

Well that's all for the moment folks! More musings to follow soon. Keep reading, keep it here, keep it 'crude'! 

To follow The Oilholic on Twitter click here.

To follow The Oilholic on Forbes click here.

To follow The Oilholic on Energy Connects click here.

To email: journalist_gsharma@yahoo.co.uk  

© Gaurav Sharma 2025. Photo I: Oil production site. © jplenio / Pixabay, 2018. Photo II: Energy Analyst Gaurav Sharma on Asharq Bloomberg Business News channel. © Asharq Bloomberg Business News, June 2025. 

What oil price would Trump want for US consumers?

US President Donald Trump makes no secret of his pro oil and gas credentials. It is also widely understood that the President seeks lower crude prices for the American consumer. 

Ideally, US shale producers would prefer oil prices north of $75 per barrel. That isn't exactly low enough for the President. 

Thanks to an uncertain macroeconomic climate, the kerfuffle caused by his trade tariffs and OPEC+ opting to bring more barrels on to an already well supplied market - prices have recently slumped down to $60-65 per barrel. But is that range now low enough for the President? Perhaps not, say many, including global investment bank Goldman Sachs. 

Apparently, after a forensic analysis of the President's social media posts, analysts at the bank have concluded that his preference would be for a $40-50 per barrel West Texas Intermediate range. The US benchmark is trading at ~$3 per barrel discount to the global proxy benchmark Brent at the time of writing.

Quoting parts of a Goldman Sachs report to clients, Bloomberg recently noted it as having observed that Trump's "inferred preference for WTI appears to be around $40 to $50 a barrel, where his propensity to post about oil prices bottoms.” 

He also “tends to call for lower prices (or celebrate falling prices) when WTI is greater than $50,” Goldman analysts added. “In contrast, President Trump has called for higher prices when prices are very low (WTI less than $30) often in the context of supporting US production.”

However, for US shale drillers this blogger has spoken to, that range is a tad too low. Many are presently hedged 12-18 months out on $70-plus prices. When the hedges come off, a low price environment will bite. 

But the President has also been very vocal about US energy dominance - or as Goldman analysts note - tweeting nearly "900 times" about it. Clearly he wants US oil inc. to succeed too. So, where would the happy middle ground be between both sentiment tugs? 

Market forces might well decide that, skewing it to one side or the other. The only confirmed thing is the overwhelmingly bearish climate this may all play out in 2025. That's all for the moment folks. Keep reading, keep it here, keep it 'crude'! 

To follow The Oilholic on Twitter click here.

To follow The Oilholic on Forbes click here.

To follow The Oilholic on Motley Fool click here.

To email: journalist_gsharma@yahoo.co.uk  

© Gaurav Sharma 2025. Photo: US flag. © DWilliam / Pixabay, 2015. 

Oil shed $10/bbl or 14% week-on-week on Trump Tariffs

Oil futures have taken a heavy pummelling in the wake of the so-called Trump Tariffs right down to four-year lows. That's after President Donald Trump imposed a 10% baseline tariff on imports to the US, and much higher rates of up to 50% against dozens of countries. 

With major manufacturing centers in Asia on the President's tariffs list published on April 2, both Brent and WTI front-month futures subsequently shed over $10 per barrel or 14% from the price they were trading at the day before the announcement.  

The extreme volatility has brought WTI down below $60 per barrel and Brent shy of $65. A modicum of market calm is unlikely in the short-term, more so as the President has vowed further tariffs against countries (e.g. China) who chose to retaliate. Indeed, there is relatively little to be bullish about oil at the moment. 

In fact, the Oilholic argues via an op-ed in Forbes that bearish sentiment was already entrenched in

crude markets heading in to the second quarter of 2025, before the President's move amplified it. 

So even when the tariff din subsides, it may be wise not to expect an overshoot past prices noted prior to Trump crude shock. (Here's more.)

Yours truly also offered his analysis on Asharq Business with Bloomberg TV, noting that the road ahead for crude markets will likely be very, very choppy thanks to uncertain demand in China, doubts over the performance of the global economy and lower levels of consumer confidence in key markets. The full interview (dubbed in Arabic) is available here. 

There's heavy uncertainty all around from the commodities market to equites, with real fears of an international trade war and a global recession. So, how much of a drag it turns out to be on near-term oil prices is anyone's guess. Oil futures will remain hostage to Trump's next move. 

Away from crude matters, the Oilholic also published his latest Energy Connects missive on the global digital economy being powered by natural gas for decades. Here's more, have a read on why all those hyperscale datacentres simply cant be powered by renewable energy alone for a good few decades if not more. 

Well that's all for the moment folks. More musings to follow soon. Keep reading, keep it here, keep it 'crude'! 

To follow The Oilholic on Twitter click here.

To follow The Oilholic on Forbes click here.

To follow The Oilholic on Motley Fool click here.

To email: journalist_gsharma@yahoo.co.uk  

© Gaurav Sharma 2025. Photo: Energy Analyst Gaurav Sharma on Asharq Business with Bloomberg TV channel © Asharq Business, April 2025.

Crude prices in tariff war zone as OPEC+ wakes up

Global crude oil markets have taken a bit of a double whammy. First off, US President Donald Trump - a.k.a (perhaps) Tariff Man - is back with... err ..tariffs! Canada, Mexico and China were all (again) in the firing line and (again) retaliated with tariffs of their own against the US. 

As global stock markets plunged, commodity prices took a knock, oil benchmarks slumped as well and then some more. That's because OPEC+ finally woke up to the reality of its production restraint propping up prices as well, as it continues to hemorrhage market share to non-OPEC producers. 

On Monday, with its production already at a one-year high, the producers' group finally decided it had had enough and would start phasing out its 2.2 million barrels per day (bpd) voluntary production cut from April. This would be done via monthly increases of 138,000 bpd until the cuts are fully reversed by Q4 2026. 

For clarity, the eight OPEC+ countries - that previously announced these "additional voluntary adjustments" - include Saudi Arabia, Russia, Iraq, United Arab Emirates, Kuwait, Kazakhstan, Algeria and Oman. They were only intending to keep the cuts in place as an interim measure. But kept on rolling the cuts well beyond what they had originally proposed. 

However, overnight they provided a downside surprise to the market when many were expecting another rolling over of the cuts. Before news of the OPEC+ decision arrived, crude prices were already trending lower with Brent and WTI front-month contracts down 3.97% and 3.31% respectively, on the prior week. The double whammy knocked the benchmarks further lower with Brent breaking the $70 per barrel resistance barrier intraday. 

At 18:42 GMT on Wednesday, the Oilholic noted Brent down 2.55% or $1.81 to $69.12 per barrel, while the WTI was down 2.96% or $2.04 to $65.92 per barrel. All indications point to a bearish week at a time when macroeconomic scenarios ranging from uncertain Chinese demand to the threat of global trade wars point to lower crude prices. 

While Trump's moves are often unpredictable, it must be acknowledged that sooner or later OPEC+ would unwind its production. And, so, it has happened! More OPEC+ as well as non-OPEC+ crude may be expected over the near-term tariffs or no tariffs. 

Away from oil, but sticking with Trump, here are yours truly's thoughts in an interview with MarketWatch on Trump's plan to tap mineral wealth from Ukraine, and of course, at home and wherever else possible abroad. 

That's all for now folks, more to follow over the course of the month. Keep reading, keep it here, keep it 'crude'! 

To follow The Oilholic on Twitter click here.

To follow The Oilholic on Forbes click here.

To follow The Oilholic on Motley Fool click here.

To email: journalist_gsharma@yahoo.co.uk  

© Gaurav Sharma 2025. Photo: Photo: Oil production site. © jplenio / Pixabay, 2018.