Higher last week along with equities and Iran sanctions. Brent crude gained 2.4% last week. It closed the week at USD 72.16/b and traded within a range of USD 69.9 – 72.51/b with the high of the week being set on Friday. New US sanctions towards Iran was one of the drivers while a continued rebound in global equities was an important ingredient as well. Brent crude is up 0.2% this morning at USD 72.3/b along with positive equities. 

First round panic over harsh Trump tariffs is lifting with hopes for more targeted tariffs. Concerns for global economic growth and oil demand growth due to unexpectedly harsh Trump tariffs initiated a sharp selloff in equities as well as oil. Crude oil and equities have rebounded together as the first-round panic on Trump tariffs has lifted. Equity futures are rising 0.5% or more this morning on hopes that the next round of Trump tariffs will be more targeted and less broadly damaging. Looking at equities this morning one should expect Brent to move yet higher today.

Speculators are putting money back into the market. Net long speculative positions rose 45 mb over the week to Tuesday last week following an almost non-stop selloff since late January.

No oil market surplus yet. The question is mid-year onwards. It’s about oil demand growth and OPEC+. The global oil market is not yet running a surplus, but it will likely do so by mid-year. Key will be:

1) How will global oil demand growth develop in response to Trump tariffs?

2) Will OPEC+ decide to lift production yet higher after its first hike in April?

OPEC+ has already decided to lift production in April. Our impression is that that decision was partially influenced by Donald Trump asking for more oil and a lower oil price. I.e. that OPEC+ (controlled by Russia and Saudi Arabia) now has a slightly different approach to how they set production targets. I.e. that it is no longer just about price but also about the political relationship with Donald Trump. The Joint Ministerial Monitoring Committee (JMMC) will meet on 3 April to decide what to do in May.

Net long speculative positions in Brent crude and WTI rose 45 mb over week to Tuesday last week.

Brent crude prices have risen for three consecutive days, gaining USD 1.7 per barrel since last Thursday’s close. On Friday afternoon, prices briefly dipped to USD 69.9 per barrel before rebounding to a high of USD 71.8 per barrel yesterday morning. As of this morning, Brent crude is trading at USD 71.67 per barrel, up USD 0.77 per barrel since midnight.

Why?

1. Chinese economic data
Two days ago, China released better-than-expected consumption, investment, and industrial production data for the start of the year, signaling economic resilience despite the need for further stimulus. With Donald Trump’s tariffs posing a risk to growth, China has responded by committing to policies aimed at boosting incomes, stabilizing equity and real estate markets, and reviving economic consumption – all of which naturally support crude and refined product demand.

2. U.S. strikes on Yemen’s Houthis
The U.S. airstrikes on Yemen’s Houthis on Sunday, March 16 served as a stark reminder of geopolitical risk, a factor that has not been fully priced into the market recently.

3. Rising tensions in the ME
Escalating tensions in the Middle East are currently (short-term) overshadowing concerns about a potential global oversupply. Overnight, Israel launched a series of military strikes on Gaza, breaking a nearly two-month ceasefire.

4. U.S. sanctions on Iran
Iran’s Oil Minister stated over the weekend (March 15) that Iranian oil exports are “unstoppable” and that Iran will not relinquish its share in the global oil market. The new U.S. administration has already imposed sanctions on Iranian crude, but these have yet to impact production levels significantly.

As of February 2025, Iran’s crude production stood at 3.23 million barrels per day (bpd), remaining above 3 million bpd since September 2023 (Platts data). Of this, Iran exports approximately 1.7 million bpd. For comparison, under Trump’s previous presidency, the U.S. withdrew from the Iran nuclear deal, and Iranian crude production fell to 1.95 million bpd by August 2020, significantly reducing its export capacity.

If the Trump administration reintroduces maximum pressure sanctions on Iran, the market impact could be substantial. In a worst-case scenario, where Iran loses its entire 1.7 million bpd of exports, and if Saudi Arabia or other major producers do not immediately compensate for the loss, global oil prices could theroretically see an upside of as much as USD 10 per barrel (Platts).

Bearish fundamentals still loom:
Despite these bullish factors, crude remains on track for a quarterly loss due to fundamental market weaknesses. Escalating global trade tensions threaten oil demand. OPEC+ is set to increase production from April, adding additional supply to a market already at risk of oversupply.

As a result, while geopolitical risks and bullish headlines provide short-term support to prices, SEB: forecasts that fundamental market conditions limit the potential for sustained price rallies.

A tight sideways range last week. Bearish equities on tariff fears. Brent crude rose 0.3% last week with a close of USD 70.58/b. It traded in a range of USD 68.63 – 71.25/b. Closing wise it held well within the USD 69 – 71/b band, held down by S&P 500 moving into correction mode and the Russel 2000 index moving into bear territory. Brent is up 0.6% this morning at USD 71/b with a high so far today of USD 71.8/b. That is the highest intraday price point since 3 March. Brent crude is thus pushing towards the upper boundary of the trading range over the past 8-9 days.

Chinese stimulus measures feed some optimism back in crude. The upwards move this morning is driven by news that politicians will boost people’s income, revive consumption and stabilize the stock and real estate market. The Chinese economy has been struggling for a while following Covid-lockdowns and a tanking real estate market. The tariffs from Donald Trump are now an additional challenge making it even more imperative to support the Chinese economy. While the signaled measures are supportive and positive, words like ”reasonable” growth in wages are used. There isn’t any sense of ”bazooka” stimulus measures as of yet.

Moving up with the negative fallout from the Trump tariffs is left for another day to worry about. The oil market is thus in a balance between the negative effects of Trump’s tariffs versus the positive effects of Chinese stimulative measures. The global oil market isn’t in surplus yet if we look at the 1-3mth time-spreads as a measure. The bearish downwards pressure on oil has come from the forceful selloff in US equities with natural fears that the tariffs from Trump will give both the US and the global economy a hard, negative kick. But today it seems that the positive political signals from China on stimulus there is set to lift Brent crude up and out of the depressed range it has traded in over the past 8-9 trading days. The negative fallout from the Trump tariffs is left for another day to worry about it seems.

Brent crude 1mth has traded in a tight range over the past 8-9 trading days when it has closed between USD 69-71/b. Today it looks set to move up and out of that range.