Oil prices have risen slightly, but this is far from compensating for yesterday’s drop
24 April 08:53
Oil prices rose slightly on Thursday after falling by almost 2% yesterday, "Komersant Ukrainian" reports citing Reuters. Investors are weighing a possible increase in OPEC production amid conflicting tariff signals from the White House and ongoing nuclear talks between the US and Iran.
Futures for Brent crude oil rose 8 cents, or 0.12%, to $66.20 per barrel as of 07:05 Kyiv time, while US West Texas Intermediate (WTI) rose 9 cents, or 0.14%, to $62.36 per barrel.
The day before, prices fell by 2% after a Reuters report that several OPEC members intend to propose to the group to accelerate the increase in oil production for the second consecutive month in June. This was reported by three sources familiar with the cartel’s negotiations.
“Although sentiment in the risk asset market improved yesterday, oil was left behind due to disagreements in OPEC,”
– ING analysts said in a research note.
Price war in OPEC
Kazakhstan, which accounts for about 2% of global oil production and has repeatedly exceeded its quotas over the past year, has said that it will prioritize national interests over OPEC’s when determining production levels.
Previously, there have been disputes between OPEC members over compliance with production quotas, one of which led to Angola’s withdrawal from the cartel in 2023.
“Further disagreements between OPEC members pose a clear downside risk to prices, as they could lead to a price war,”
– ING analysts warned.
As reported
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The impact of the US-China trade war
Signs that the US and China may be approaching trade negotiations supported oil prices. The Wall Street Journal reported that the White House is ready to reduce tariffs on Chinese goods by up to 50% to start negotiations.
US Treasury Secretary Scott Bessent said on Wednesday that the current import duties – 145% on Chinese goods entering the US and 125% on US goods exported to China – are not sustainable and should be reduced before trade talks between the two sides begin. However, White House press secretary Carolyn Leavitt later told Fox News that there would be no unilateral reduction in tariffs on goods from China.
According to analysts at Rystad Energy, the ongoing trade war between the US and China could cut China’s oil demand growth in half this year – to 90,000 barrels per day from the projected 180,000 barrels per day.
The Financial Times also reported on Wednesday that U.S. President Donald Trump is considering exempting import duties on automotive parts from China.
Iranian factor and nuclear negotiations
The third round of talks between the US and Iran, scheduled for the weekend, could put potential pressure on oil prices. The talks concern a possible agreement to restore restrictions on Tehran’s uranium enrichment program. The market is closely watching these talks, as any signs of rapprochement between the US and Iran could lead to a softening of sanctions on Iranian oil and an increase in its supply on the world market.
However, on Tuesday, the United States imposed new sanctions against Iran’s energy sector, which, according to the Iranian Foreign Ministry spokesman, shows a “lack of goodwill and seriousness” in the dialogue with Tehran.
Oil market analysts continue to closely monitor these geopolitical factors, which will be crucial for shaping price trends in the short term.
Russia is already hurting
It is well known that Russia is critically dependent on its energy exports. First and foremost, on oil exports. In 2024, the federal budget revenues from oil sales amounted to 9.19 trillion rubles (approximately $89.4 billion). Total budget revenues for this period amounted to 36.71 trillion rubles. Thus, the share of oil revenues in the total structure of Russian budget revenues in 2024 was approximately 25%
This indicates that, despite international sanctions and attempts to diversify revenue sources, oil remains a key source of financing for the Russian budget.
Russian Urals oil is traditionally sold at a lower price than Brent and WTI, and it is also subject to additional factors that raw materials from other countries do not experience, namely Western sanctions. However, during all three years of the full-scale war with Ukraine, Russia has been successfully selling its oil – its main buyers today are China and India.
The federal budget of the Russian Federation for 2025 included an oil price of $70. Meanwhile, due to the collapse in the global oil market caused by Donald Trump ‘s trade war and OPEC’s decision to further increase production, the price of Russian Urals oil, according to the Ministry of Finance, was $61 per barrel on April 22.
So far, market analysts’ forecasts do not promise Russia any serious problems related to the price of oil, as it still has a very large backlash for sales. According to economic expert Oleg Pendzin, even a price of $50 per barrel is still acceptable for Russia.
“Currently, the direct cost of Russian oil production is about $37-38 per barrel. This is the direct cost. The critical figure for Russia is the sales price of $45,”
– explained the economist exclusively for
Therefore, the more likely way to hurt Russia over oil is still to tighten sanctions, including secondary sanctions against its buyers. The point of this step is to make it physically impossible for Russia to sell large volumes of oil and thus receive funds to continue its aggressive war of aggression.
However, back during his election campaign, after making statements about ending the war in 24 hours or 100 days, Donald Trump made a very realistic statement. He said that in order for Russia to lose the ability to fight, it would be enough to simply collapse oil prices. And he seems to be going to do that if Russia does not make concessions. Whether Trump realizes it or not, this is exactly what is happening now.
The Russian economy is already slowing down significantly at $61 per barrel of oil, the industry is stagnating, and recession looks like a very real prospect.
And if the current downward trend in prices continues, the $45 per barrel figure no longer looks fantastic.
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