What's Affecting Oil Prices This Week? (April 14, 2025)

The price of Brent crude ended the week at $64.59 after closing the previous week at $66.01. The price of WTI ended the week at $61.48 after closing the previous week at $62.32. The price of DME Oman crude ended the week at $66.11.

Last week, oil prices continued to slide downward following the substantial price drop of the previous week stemming from the announcement of additional tariffs by the Trump Administration that were significantly greater in magnitude than expected, coupled with members OPEC+ agreeing on April 10 to unwind their supply cuts at a greater extent in May than previously expected (411,000 bbl/d vs. 135,000 bbl/d).

The outlook for oil demand is in flux because of the uncertainty around tariffs and the impact on economic growth and oil demand. OECD demand, however, is relatively stable and less affected by economic uncertainty, including U.S. demand, which is supported by structural factors and EU demand supported somewhat by the significantly stronger euro (with respect to the U.S. dollar). While the recent downturn in oil prices provides some support for non-OECD demand, the extent of non-OECD oil demand growth will be highly dependent on demand associated with China and countries located in south and southeast Asia. As we highlight in the Economic section of this note, China is taking numerous steps to stimulate its domestic economy to offset any hit to China’s exports. Additionally, there are signs that the extent of the tariffs will be substantially less than initially announced by the Trump Administration in early April. As such, at this time, we are not inclined to make any material changes to our oil demand forecast for 2025. (Based on our detailed analysis of oil demand with respect to each demand segment at the country level and with consideration of the shifts in the vehicle fleet and the role of alternative fuels, we are currently forecasting that oil demand growth will be 1.30 MMbbl/d in 2025.)

With the significant drop in oil prices there is increased financial pressure on U.S. shale producers, which creates doubt in their ability (and desire) to maintain their planned levels of capital expenditures and drilling programs. Even before the imposition of the tariffs, we were expecting that the U.S. shale sector would not add any material volumes this year – and we have not changed our views, except the downside risk has increased.

The potential drawback of the U.S. shale producers could possibly provide OPEC+ with the opportunity to regain some market share. Additionally, there are some thoughts that Saudi Arabia may push for more volume to drive oil prices down temporarily to encourage chronic overproducers (including Iraq and Kazakhstan) to reduce their supply to account for previous overproduction. Our view, however, remains that members of OPEC+ will maintain discipline and be proactive in aligning supply with demand. Supportive of our view is that in conjunction with the recent announcement of supply increases, the group of OPEC+ producers also stated that the gradual increases may be paused and even reversed depending on market conditions. Additionally, because of the depressed oil price, Russia is feeling even more economic pressure and is unlikely to be supportive of any further volume increases by members of OPEC+ that would threaten a recovery in oil prices. Without the support of Russia, we do think that OPEC+ will move forward with supply increases that would undermine the long-term viability of OPEC+, which is increasingly critical to the stability of the oil market.

For the upcoming week, we are expecting that oil prices will trend upward, in part, because the Trump Administration recently announced exemptions to tariffs for some electronic goods from China – including smartphones, computers, semiconductors, flash drives, memory cards, solar cells and flat-panel displays. There have been signs that the U.S. will be working with several major trading partners to arrive at new trade deals that will result in the tariffs being normalized and in some cases being eliminated. That had not been the case, however, with China – until this announcement that came late on April 12.

For a complete forecast of crude oil and refined products and other energy-related fundamentals and prices, please refer to our Short-term Outlook.

About the Author: John E. Paisie, president of Stratas Advisors, is responsible for managing the research and consulting business worldwide. Prior to joining Stratas Advisors, Paisie was a partner with PFC Energy, a strategic consultancy based in Washington, D.C., where he led a global practice focused on helping clients (including IOCs, NOC, independent oil companies and governments) to understand the future market environment and competitive landscape, set an appropriate strategic direction and implement strategic initiatives. He worked more than eight years with IBM Consulting (formerly PriceWaterhouseCoopers, PwC Consulting) as an associate partner in the strategic change practice focused on the energy sector while residing in Houston, Singapore, Beijing and London.