Brent in limbo amid supply concerns and tariff threats

The front-month ICE Brent contract has inched $0.02/bbl higher on the day from Friday, to trade at $70.25/bbl at 09.00 GMT.

PHOTO: Oil barrels. Getty Images

Upward pressure:

Brent’s price found little support after Kazakhstan’s Energy Minister Almassadam Satkaliyev said the government has instructed oil majors to cut production in an effort to stay within OPEC+’s designated output quotas, Reuters reported.

The country’s deputy energy minister Alibek Zhamauov said that oil production will be reduced through May 2025, as well as exports via the Caspian Pipeline Consortium (CPC), Kazakhstan’s biggest pipeline operator, will be slashed during the same period, the report added.

The country also plans on delaying the “full ramp-up of the Tengiz oil field to the second half of the year to comply with its OPEC+ quota,” VANDA Insights’ founder and analyst Vandana Hari remarked.

Downward pressure:

Brent crude’s price gains were limited by the impending threat of a US trade war with Canada, Mexico and China, driven by tariff uncertainties that have rattled financial markets and weighed on demand growth sentiment.

“Though [Brent] prices managed to creep back above US$70/bbl… tariff uncertainty is a key driver behind the weakness,” two analysts from ING Bank said.

Besides, a Bloomberg report on Friday suggested that Russian President Vladimir Putin is now open to a ceasefire deal with Ukraine, which could hopefully end the three-year-long conflict between Kyiv and Moscow.

A ceasefire deal between Russia and Ukraine could see the US lifting its sanctions on Russian oil exports, which in turn could increase global oil supply, according to market analysts.

“The US is reportedly exploring ways to swiftly ease energy sanctions on Russia if it agrees Ukraine ceasefire deal,” Hari added.

By Aparupa Mazumder

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