Oil Set for Second Weekly Decline as Market Eyes another OPEC+ Output Hike
Oil prices were on track for a second consecutive weekly decline on Friday, weighed down by expectations of another OPEC+ output hike in July and fresh uncertainty after the latest legal twist kept US President Donald Trump's tariffs in place.
Brent crude futures slipped 21 cents, or 0.33%, to $63.94 a barrel by 0626 GMT. US West Texas Intermediate crude fell 22 cents, or 0.36%, to $60.72 a barrel. The Brent July futures contract is due to expire on Friday.
Both contracts have fallen 1.3% so far this week, Reuters reported.
The downward trajectory largely stemmed from the prospect of rising supplies as investors priced in another hike by the Organization of the Petroleum Exporting Countries and its allies, a group known as OPEC+, when eight of its members meet on Saturday.
"The stage is set for another bumper production increase," Westpac's head of commodity and carbon research, Robert Rennie, said in a note, potentially more than the 411,000 barrels-per-day hike decided on at the previous two meetings.
The potential hike comes as the global surplus has widened to 2.2 million bpd, likely necessitating a price adjustment to prompt a supply-side response and restore balance, said JPMorgan analysts in a note.
The analysts expect prices to remain within current ranges before easing into the high $50s by year-end.
In the US, Trump's tariffs were to remain in effect after a federal appeals court temporarily reinstated them on Thursday, reversing a trade court's decision on Wednesday to put an immediate block on the most sweeping of the duties.
The block pushed oil prices down more than 1% on Thursday as traders weighed its effects. Analysts said uncertainty would remain as the tariff battles worked through the courts.
Oil prices have lost more than 10% since Trump announced his "Liberation Day" tariffs on April 2.
On the demand front, recession worries fuelled by the tariff war have clouded the outlook. Adding to US-China trade tension, Washington ordered a broad swathe of companies to stop shipping goods, including ethane and butane, to China without a license and revoked licenses already granted to certain suppliers.
Global oil demand improved from the previous week, driven by a rebound in US oil consumption with robust travel over the Memorial Day long weekend, the JPMorgan analysts noted.
Still, the monthly expansion in global oil demand is tracking at approximately 400,000 bpd as of May 28, 250,000 bpd below expectations, the analysts said.
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Arab News
2 hours ago
- Arab News
Global threat report reveals Trump's strategic priorities
The US Defense Intelligence Agency recently released its annual threat assessment report. While these official government documents are often bland and filled with bureaucratic language, this year's publication stands out — both for its substance and what it reveals about how the new administration views today's geopolitical challenges. This is the first threat assessment of President Donald Trump's second term, and it offers an early insight into the administration's strategic priorities. A few things jump out right away. This year's threat assessment is longer than last year's, and offers a more detailed and nuanced analysis across multiple sections. But two major changes in this year's report, when compared with the final assessment produced under the Biden administration, are particularly striking. The most notable difference is the inclusion of a dedicated section on US homeland defense and border security — placed not as an afterthought but as the first item in the report. This marks a sharp departure from last year's assessment, which focused almost exclusively on global threats and challenges. The placement and tone of the new homeland security section clearly bear Trump's personal stamp. One of his most effective political narratives has been that US policymakers focus too much on problems abroad, while neglecting the security of Americans at home. This report reflects that view. The homeland security section places particular emphasis on the national security implications of illegal immigration, transnational organized crime, and the influx of deadly narcotics by drug cartels into small American communities. These are not just political talking points; they represent real and growing threats to the safety and well-being of Americans. But the political savvy of the framing should not be overlooked. While the average American may not be deeply familiar with issues such as Taiwan's security or freedom of navigation in the South China Sea, they are certainly familiar with the devastating impact of fentanyl or cartel violence. Including homeland security at the top of the Defense Intelligence Agency's global threat assessment makes the report more relevant to the American public and highlights Trump's emphasis on border security as a matter of national defense. The second striking difference is the prominent section, entitled 'Growing Cooperation Among US Competitors and Adversaries,' which comes immediately after the homeland security section. For the first time, a US threat assessment explicitly links and highlights the emerging coordination among America's adversaries and competitors. The report states: 'Building on activities over the past two years, leaders in Beijing, Moscow, Tehran, and Pyongyang will strengthen their nations' ties in their drive to undermine the influence of the US and its allies.' This is an important — and overdue — acknowledgment of a multipolar and interconnected world. For years, much of the US foreign policy establishment has resisted the concept of multipolarity, preferring to see the world in unipolar or bipolar terms. This resistance is rooted in Cold War-era thinking, when power was viewed through a US-versus-Soviet lens. But a new generation of American strategists understands that multiple centers of power exist — and are increasingly coordinating with one another to challenge US interests around the globe. The coming months will be critical for the future of America's role in the world. Luke Coffey Recognizing the reality of this multipolar environment does not mean conceding that all powers are equal. It simply acknowledges the complexity of today's geopolitical landscape. The inclusion of this section in the threat assessment is a necessary step toward grappling with the way these regimes are learning from each other, cooperating diplomatically, militarily, and economically, and exploiting US vulnerabilities. To illustrate the shift, if you took a diplomat from 1980 and one from 1880 and brought them both to 2025, it might be the latter — accustomed to a world of competing empires and power centers — who would better recognize the dynamics at play today. Recognizing these trends is one thing, acting on them another. Within the new administration, there are competing schools of thought on how to respond. Some believe China is the primary threat and argue that all instruments of US power should be directed toward countering Beijing. Others, often aligned with more isolationist instincts, believe the US should focus exclusively on homeland security and reduce its global footprint. Then there are more traditional Republican voices who argue that the US must be able to address multiple threats simultaneously and maintain its global leadership role. Though the administration is still filling out its national security team, the contents of the Defense Intelligence Agency report suggest that the latter group is gaining the upper hand, at least for now. That could signal a more balanced approach in future, one that prioritizes US security at home, while maintaining engagement and vigilance abroad. In the coming months, the Department of Defense is expected to publish a new National Defense Strategy, which should provide additional clarity on how the US plans to counter the threats identified in the Defense Intelligence Agency assessment. Likewise, the National Security Council is likely to release a similar document outlining a more comprehensive, whole-of-government approach to these challenges. Importantly, all these strategies must be backed by resources. The White House will need to work with Congress to ensure that the budget aligns with these stated priorities. It is one thing to acknowledge that America's adversaries are coordinating their efforts, but quite another to craft a strategy — and appropriate the funds — to counter them effectively. Some in the Biden administration may have understood that this emerging coordination by America's competitors posed a threat, but were reluctant to spotlight it publicly for fear of being forced to act. The Trump administration, by contrast, has put these challenges front and center. But in doing so, it has also raised the stakes. Having declared that homeland defense is national security — and that America's adversaries are working together — the administration will now be judged on how it responds. The coming months will be critical, not only for America's national security and that of its allies, but also for the future of America's role in the world.
Arab News
2 hours ago
- Arab News
Africom's demotion sends a signal: Africa must buckle up
US Gen. Michael Langley's blunt declaration at the African Lion 2025 military exercise — 'There needs to be some burden sharing' — resonates less as a strategic evolution and more as polite euphemism for irreversible US retrenchment in Africa. It marks a discernible shift away from the usual rhetoric of good governance and counters the underlying causes of insurgency that defined past US engagement. Instead, Washington is now signaling that its fragile African allies must prepare to stand more on their own. This is not merely a tactical adjustment; it is perhaps the opening salvo in a potential dismantling of the US Africa Command, an institution born in 2008 to symbolize Africa's rising strategic importance. A leaked Pentagon briefing, contemplating Africom's merger back into European Command as a subordinate three-star billet, exposes the core driver: fiscal parsimony disguised as strategic realignment. After all, the projected savings represent a minuscule 0.03 percent of the Pentagon's nearly $900 billion annual budget, leading to one retired general's wry assessment that dismissed the proposed 'merger' as mere cost-cutting rather than well-conceived strategic maneuvering. Strangely, the move contradicts the administration's almost simultaneous escalation of kinetic operations — from loosened airstrike rules in Somalia to expanded combat authorities — revealing a preference for lethal action divorced from the holistic planning a dedicated command is almost always required to provide. On the surface, this bizarre posture does not suggest outright disengagement, as alarmists would have us believe, but a cheaper, more fragmented, and ultimately less effective militarization. 'Burden sharing,' therefore, appears less a call for equitable partnership and more a precursor to transactional disengagement. The underlying calculus seems worryingly mercenary — that is, for African countries to expect enduring US security investments, Washington must first be assured of demonstrable, immediate returns. Of course, this introduces a whole host of questions. Will potential host nations even agree to foot the bill for bases? Will access to critical minerals such as cobalt — vital for batteries, with 70 percent of global supply coming from the Democratic Republic of the Congo — be guaranteed on favorable terms? Favorable to whom? Will US energy firms secure priority contracts? Langley's oblique reference to US support for Sudan, in further comments, hints at this new 'quid pro quo' expectation. Moreover, the systematic dismantling of the United States Agency for International Development and other soft power initiatives under previous budgets leaves the military as the primary, blunt instrument of influence, now wielded with an eye firmly on the balance sheet. This is not multilateralism but rugged transactionalism, where security partnerships exist only if they yield direct, tangible economic or strategic profit that exceeds the cost of deployment. For now, however, the bureaucratic inertia favoring Africom's survival remains formidable. Congressional Armed Services Committee chairs issued an immediate rebuke of any plans to dismantle the institution, declaring combatant commands the tip of the American warfighting spear and vowing to block unilateral changes lacking rigorous process. Their control over the defense budget and security assistance programs grants them significant leverage. But it is unclear whether that will be sufficient to dissuade an administration convinced that a rather different set of rules are now at play across the African continent. For African countries to expect enduring US security investments, Washington must first be assured of demonstrable, immediate returns. Hafed Al-Ghwell Regardless, CASC lawmakers do have a point. The proposed demotion of Africom from a four-star combatant command to a three-star entity under European Command constitutes far more than an organizational reshuffle. It represents a deliberate degradation of Africa's institutional standing within the Pentagon's hierarchy, with profound implications for how US security policy toward the continent is formulated and prioritized. After all, the bureaucratic architecture of the US military assigns immense weight to the rank and position of its commanders. A four-star combatant commander occupies one of only 41 such positions across the entire US military — a rarefied stratum granting direct, unfiltered access to the defense secretary and the president. This constitutes a critical 'action channel,' a formal pathway enabling the commander to shape policy debates, advocate for resources, and present Africa-centric security assessments at the apex of national security decision-making. Removing this four-star billet effectively mutes Africa's dedicated advocate in the rooms where global priorities are set and resources allocated. A three-star deputy, nested within EUCOM's bureaucracy and reporting through a superior focused primarily on European and transatlantic security concerns, simply lacks the equivalent rank, prestige, and direct access necessary to ensure Africa's complex challenges receive commensurate high-level attention, especially when competing against demands from regions such as Ukraine or the Indo-Pacific. However, Africom's toehold on the continent, though opaque, has only become more vulnerable in recent years. The expulsion from Agadez and Niamey, two critical drone bases in Niger with more than 1,100 personnel, crippled intelligence, surveillance, and reconnaissance capabilities across the Sahel. This leaves Chabelley airport in Djibouti — supporting perhaps 4,000 troops and a squadron of MQ-9 Reaper drones — as the sole publicly confirmed, persistent drone hub. Estimates of total Africom personnel fluctuate wildly due to rotational deployments and classified sites, but credible assessments suggest fewer than 5,000–10,000 troops continent-wide at any time, concentrated heavily in Djibouti and Somalia. This scattering across what are known as 'Cooperative Security Locations' and 'Contingency Locations,' potentially two dozen sites with 100-200 troops each, creates persistent entanglement risks. Furthermore, sustaining such a diffuse, vulnerable presence has become politically unsustainable given the lack of clear, publicly defensible victories against resilient groups such as Al-Shabab or Daesh affiliates flourishing in post-Qaddafi Libya and parts of the Sahel. Yet, the confluence is undeniable. The demand for allies to shoulder more risk coincides with a push to downgrade the command structure advocating for sustained engagement, all while expanding kinetic operations on the cheap. Thus, the 'end' of Africom as an independent entity is plausible, even likely — blamed on budgetary scalpels, but mostly due to being a casualty of a transactional worldview. However, this does not in any way signify a total demilitarization of US policy in Africa. Rather, it heralds a more incoherent, reactive, and narrowly self-interested era — and Africa had better buckle up. Military force would remain an option, perhaps even the default option in the absence of robust non-kinetic tools, but planned and executed with less expertise, less consistent oversight, and less regard for long-term stability. Africa, in this emerging era, risks becoming a theater for opportunistic strikes and extractive deals, its complex challenges reduced to a ledger of costs and immediate benefits — a far cry from the 'smart power' aspirations that accompanied Africom's founding.
Saudi Gazette
3 hours ago
- Saudi Gazette
OPEC+ nations to begin phased oil production increase in July
Saudi Gazette report RIYADH — Eight OPEC+ member countries, including Saudi Arabia, Russia, and the UAE, will raise oil production by 411,000 barrels per day (bpd) in July 2025 as part of a phased reversal of previous voluntary output cuts, the alliance announced on Saturday following a virtual meeting. The decision follows the group's earlier agreement on December 5, 2024, to gradually ease the 2.2 million bpd in voluntary reductions that were implemented in April and November 2023. The upcoming adjustment is equivalent to three monthly increments and reflects what the group described as a 'steady global economic outlook' and 'healthy market fundamentals,' including low oil inventories. The eight participating countries — Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria, and Oman — stressed the adjustment remains flexible and may be paused or reversed depending on evolving market conditions. The statement emphasized that the approach is designed to support ongoing market stability and gives room for countries to accelerate compensation for previous group reaffirmed its full commitment to the Declaration of Cooperation and pledged to compensate for any excess volumes produced since January of conformity and compensation will continue through monthly meetings, with the next session scheduled for July 6, 2025, when the group will decide on production levels for August.
