Oil Prices Remain Under Pressure From Trade War Fears
Crude oil prices were set to end the week with a third consecutive decline as worry about the effect of Trump’s tariffs and China’s retaliation to them dragged benchmarks down. At the time of writing, oil was slightly up from Thursday, with Brent crude at $74.69 a barrel and West Texas Intermediate at $70.92 per barrel, but both were lower than they were on Monday, by over 2%. The slide in prices followed the introduction of a 10% tariff on all Chinese imports into the United States, which prompted China to respond in kind, slapping a 10% import duty on U.S. crude and a 15% tariff on liquefied natural gas. A Thursday announcement by the Department of Treasury that it would sanction several people and vessels carrying Iranian crude oil abroad somewhat limited the downward pressure on oil prices but the impact of the move is yet to manifest in full. “Oil prices saw some stability return this morning following a volatile session overnight, as traders react to news of U.S. sanctions on Iranian crude exports to China,” IG analyst Yeap Jun Rong told Reuters. “Nevertheless, (today’s) oil gains are limited, reflecting persistent concerns over supply and demand headwinds, including the potential for increased production from OPEC+ and the US, as well as tariff risks weighing on global oil demand,” he added. ING commodity analysts, meanwhile, revised their general expectations about oil prices in 2025 this week, noting that “The supply risks facing the market due to sanctions mean that the floor for oil prices is probably a little higher than we had expected coming into this year. However, much will depend on how trade relations progress. A tougher stance from the US on trade will be a concern for global growth.” BMI analysts pointed out the prospect of a full-blown trade war as a source of price pressure on oil as such a development could weaken demand for the commodity.
ADNOC and India: strengthening energy ties for a sustainable future
As we gather for the Third Edition of India Energy Week in New Delhi, we stand at the crossroads of a new era of human progress and global prosperity that will be shaped by three megatrends: the rise of emerging economies, the transformation of global energy systems and the rapid growth of AI. Among the drivers of these megatrends is the world’s population which is expected to increase to 9.7 billion by 2050 from the current 8 billion, a rise that will increase demand for energy. Meeting this demand will require a diversity of energy options and the transformation of current energy systems. With its broad portfolio across the energy spectrum – spanning renewables, nuclear, hydrogen and hydrocarbons – the UAE has been at the forefront of this energy transformation. At ADNOC, we are embracing these megatrends to future-proof our business, drive decarbonisation and deliver long-term sustainable value and growth. In collaboration with long-standing partners, such as India, we are expanding access to energy to meet rising demand, empower lives and enable a more secure and sustainable energy future. Underscoring the deep-rooted, longstanding strategic and historic relationship between the UAE and India is the Comprehensive Economic Partnership Agreement (CEPA), under which bilateral trade has flourished across multiple sectors, including energy. As a testament to this relationship, ADNOC has established several strategic partnerships with Indian companies across the energy value chain including with Indian Oil Corporation (IOC), ONGC Videsh, GAIL and Bharat Petroleum Corporation Limited. We have also welcomed Indian companies as partners in Abu Dhabi’s oil and gas concessions, providing a path to securing long-term energy supplies for India. Today, India is ADNOC’s second largest market for crude oil. Our partnership with India is not just about supply—it is about co-creating long-term energy solutions. In a world where a billion people still lack access to energy, we need all energy solutions to meet demand and we need everyone who can provide solutions to work closely together. This is the thinking behind XRG, ADNOC’s $80+ billion international energy investment company. With an initial focus on international gas, global chemicals, and low carbon energies, XRG is set to lead transformative investments in global energy systems and solutions to meet the increase in energy demand. AI is also proving to be an important tool in accelerating the journey to transform energy systems. To this end, ADNOC has integrated AI across our value chain to enhance efficiencies and unlock greater value from our assets and resources. For example, together with AIQ, we recently completed the trial phase of ENERGYai, the world’s first-of-its-kind agentic AI solution tailored for the energy sector. The solution, which uses AI agents and combines large language model technology with proprietary data, successfully demonstrated significant improvements to seismic interpretation, reservoir performance and monitoring. As one of the fastest growing world economic powers and largest energy consumers, India plays a crucial role in the global energy transformation. On our part, ADNOC continues to engage with our Indian partners to explore new ways to enhance energy security, expand access to cleaner energy, and drive innovation in emerging technologies. We see significant potential to strengthen collaboration in line with India’s ambitions for economic growth and energy security.
Trump’s tariffs and Russian oil woes deepen crisis for Indian OMCs
India’s state-owned oil-marketing companies (OMCs) are staring down an abyss in 2025 on the heels of a disappointing annual budget for oil and gas for 2025-26 and from the volatility in oil and gas markets caused by the Trump administration’s disruptive energy tariff policies. These developments come amid discounted Russian oil flows, a mainstay of gross refining margins for Indian refiners, slowing to a trickle in the face of the latest US sanctions and expensive alternative supplies. US President Donald Trump initially threatened tariffs as high as 60 per cent on China and 25 per cent on Mexico and Canada, subsequently reducing rates to 10 per cent for Chinese imports and for energy imports from Canada and Mexico. The changes were effective from Tuesday but have been delayed by at least a month for its North American trading partners.
Aramco raises prices as demand from Asia grows
Saudi Aramco, the world’s leading oil exporter, has sharply increased crude prices for March shipments to buyers in Asia. Demand from China and India is rising as US sanctions disrupt Russian supply. Aramco raised the official selling price for flagship Arab Light crude by $2.40 to $3.90 per barrel above the Oman/Dubai benchmark average, Saudi Aramco said in a statement on Wednesday. The oil exporter steeply increased crude prices for March shipments across all other regions as well. Aramco raised March prices for buyers in northwest Europe and the Mediterranean by $3.20 a barrel for all crude grades, and raised the OSPs for grades it sells to the United States by 10-30 cents a barrel. The hike in Arab Light price for Asia was broadly in line with expectations with the $2-$2.50 increase forecast in a Reuters survey of three of four Asian refining sources. On January 10, the administration of former US president Joe Biden imposed fresh sanctionson Russian producers, tankers and insurers, further tightening global oil supply from the world’s second-largest producer and limiting vessel availability. In response, Chinese and Indian refiners scrambled to secure alternative cargoes, driving spot premiums for Oman and Dubai crude to their highest levels since November 2022. Opec+, which accounts for nearly half of global oil production, decided in early December to delay the start of planned output increases by three months, pushing them to April. The group also extended the full unwinding of its production cuts by a year, now set to conclude at the end of 2026.