Oil Prices Climb as U.S. Court Blocks Tariffs, Supply Disruptions and OPEC+ Production Talks Raise Market Expectations
Oil prices rose on Thursday after a U.S. trade court denied most of the tariffs the Trump administration had put in place. The move allayed fears over the global economy and lifted expectations for oil demand. Brent crude added 1.6% to $65.93 a barrel by midday, and U.S. West Texas Intermediate (WTI) crude jumped 1.7% to $62.90 a barrel.
The court held that the expansive tariffs on imports from multiple trading partners of the United States were beyond the president's authority. This is a positive development for world trade as well as economic growth, which supports stronger fuel demand. But the ruling may be appealed, leaving some uncertainty.
The oil market is also monitoring possible new United States sanctions that would restrict Russian crude exports. The sanctions could curtail supply and drive up prices. While OPEC and its allies, known as OPEC+, are expected to meet later this week and debate raising oil production. Sources predict an increase of approximately 411,000 barrels per day as demand increases.
Supply fears rose after Chevron halted its oil extraction in Venezuela following the expiration of a major operating license earlier this year. Before the shutdown, Chevron's production eclipsed 290,000 barrels per day, or a third of Venezuela's total output.
Analysts expect global demand for oil liquids to exceed supply by between 600,000 and 700,000 barrels a day each month between May and August. That imbalance suggests an oil-price bull market during the travel- and industry-heavy summer season.
Complicating supply matters are the wildfires in Alberta, Canada, which have forced evacuations and temporary shutdowns of some oil and gas operations. These disruptions cut crude supplies and place additional upward pressure on prices."
Investors are paying close attention to weekly U.S. inventory figures to inform what they think about crude and fuel stock levels. Preliminary estimates indicate that U.S. crude and gasoline stockpiles fell last week, potentially aiding additional price gains.
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- Straits Times
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Straits Times
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Straits Times
an hour ago
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Europe's top diplomat rejects Pentagon chief's call that it limits role in Asia
Europe's top diplomat Kaja Kallas said she had made her views known to US Secretary of Defence Pete Hegseth after his speech. ST PHOTO: LIM YAOHUI SINGAPORE - Europe's top diplomat Kaja Kallas has rejected calls from the United States that the continent should limit its role in Asia, saying that the security theatres of Indo-Pacific and Europe are intimately connected. Secretary of Defence Pete Hegseth had suggested at the Shangri-La Dialogue that allies in Europe focus on security in Europe, so that Washington could focus on Asia. In response to a question at the security forum organised by the Institute of International and Strategic Studies on what role Europe's militaries should play in Asia, Mr Hegseth said initially that it could be 'useful' that China takes into account the presence of other countries in the region. Bu t, he added, the US 'would much prefer that the overwhelming balance of European investment be on that continent'. 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Ask about the toughest thing she's had to navigate since she became the European Union's No 2 - and thus its high representative for foreign affairs and security policy - on Dec 1 2024, and Ms Kallas says without hesitation: 'To be very frank with you, the biggest challenge has been that the strong alliance that we have had with the Americans is somewhat changing.' Working out a common position on China Ms Kallas, who turns 48 in June, was Estonia's first female prime minister - a role she held from 2021 to 2024 - before she resigned to assume her current position taking over from Spain's Josep Borrell. Being PM was 'a walk in the park' compared to what she does now, having to corral the EU's 27 countries from Germany to Hungary - all of whom have their own views on foreign matters. Getting a majority is hard. Unanimity is near impossible. One of the most important issues confronting the bloc today is its China policy. Reeling from the shock of long-time ally US ripping up the trade playbook - Europe was hit by a 20 per cent 'reciprocal tariff' before Mr Trump called for a pause and 25 per cent tariffs on autos, steel and aluminum imports - some European leaders want a pivot towards China, and to find common cause in open global trade. Leaders from countries such as Spain and France have made recent trips to Beijing, as has Ms Kallas' boss European Commission chief Ursula von der Leyen. But Ms Kallas flags 'two big worries with China' - its role in Russia's war in Ukraine, and what she calls 'coercive economic practices' - the dumping of cheap Chinese goods in Europe. She runs through other concerns: Chinese-flagged ships that damage subsea cables in the Baltic Sea and cyber attacks that she says were conducted by Chinese companies on the Czech Republic. 'So these are not good signs. China is saying that they want good, strong relations with us Europeans. And then we say, if we are your friends, why are you doing these things to friends, or why are you helping those who are not our friends, like Russia? 'But there are, of course, different views as well on how to proceed with China,' she adds. 'We have very divergent views. As long as we have divergent views, then we are weaker.' 'So this needs some contemplation on our side, how we see our relationship developing.' She refuses to be drawn into whether the bloc has developed a more pro-China tilt in the last six months. Later in June, she and the EU's 27 foreign ministers are meeting to see how they can work on a common position on China. The last such meeting was in June 2023. 'I think a lot has changed in the meantime,' she says wryly. 'Israel is losing friends' One big change has been how the US has positioned itself in the Ukraine-Russia conflict. Mr Trump has appeared to side with Moscow against Europe's strategic interests, inducing fears that Washington may throw Ukraine - and Europe - under the bus in a bid to end the war. But on May 29, Mr Trump signalled that he would set a two week deadline for Mr Putin to demonstrate his seriousness about ending the war. Asked whether he believe d Russian President Vladimir Putin intende d to do so, a frustrated-sounding Mr Trump told reporters: 'I'll let you know in about two weeks. We're going to find out whether or not he's tapping us along or not. And if he is, we'll respond a little bit differently.' But the mercurial Mr Trump has had a track record of walking back on what he's said, and when asked if she thinks he is serious this time, Ms Kallas gives little away but for a tiny grimace. She says simply: 'It has been now over two months since Ukraine agreed to unconditional ceasefire. If you want the killing to stop, then you should put the pressure on the one who's doing the killing.' For its part, Europe is putting together its 18th package of sanctions, which Ms Kallas says will focus on banking and energy fuelling Russia's war chest. These steps could include lowering the price cap for Russian oil and disconnecting more Russian banks from the SWIFT international payment system. It was also in recent weeks that Europe along with the UK has taken the lead to ratchet up pressure on Israel over the war in Gaza, with Ms Kallas announcing on May 20 that the bloc will be reviewing preferential trade arrangements with Tel Aviv, under the EU-Israel association agreement. Observers say that this could be finally an inflection point in the EU's - Israel's biggest trading partner - response to the nearly 20-month war. The EU-Israel Association pact includes a human rights clause, Article 2, that is now being reviewed. It states that human rights and respect for international law are legally 'essential elements' of the agreement. What has been the turning point for Europe, she says, was the blockade of humanitarian aid, mostly European-funded. 'The loss of life is untenable, and we have been conveying these messages to our Israeli counterparts as well. So we are working on that review, and also proposing next steps, and at the same time talking to Israelis all the time to really stop this, also putting pressure on Hamas to have the ceasefire.' A suspension of the preferential trade benefits requires a qualified majority - 15 of 27 EU states voting in favour; while harsher steps - such as sanctions on Israel - requires unanimity. On how much time the EU will give the Israelis, before taking action, she demurs: 'You know, we have also 27 countries with very different views. 'But that we actually agreed on the review of Article 2 - that means that that Israel is losing friends.' Li Xueying is foreign editor at The Straits Times. Join ST's Telegram channel and get the latest breaking news delivered to you.
