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Jordan News
7 days ago
- Business
- Jordan News
Global Oil Prices Decline Amid OPEC+ Output Boost and U.S. Economic Concerns - Jordan News
Global Oil Prices Decline Amid OPEC+ Output Boost and U.S. Economic Concerns Oil prices continued to decline on Monday following a decision by the Organization of the Petroleum Exporting Countries and its allies (OPEC+) to implement another significant production increase in September, amid growing concerns over a slowdown in the U.S. economy, the world's largest oil consumer. اضافة اعلان According to Bloomberg News, Brent crude futures fell by 40 cents to settle at $69.27 per barrel, while U.S. West Texas Intermediate (WTI) dropped 37 cents, reaching $66.96 per barrel. On Sunday, OPEC+ agreed to raise oil production by 547,000 barrels per day in September, marking the latest in a series of accelerated output hikes aimed at regaining market share. The group cited economic strength and declining inventories as key reasons behind the move. Analysts at Goldman Sachs project that the actual increase in supply from the eight countries that have ramped up production since March could reach 1.7 million barrels per day, or about two-thirds of the announced increase, due to production cuts by other members who had previously overproduced. — (Petra)
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First Post
7 days ago
- Business
- First Post
The 'drill, baby, drill' that has kept oil prices low, and it's not all about Trump
Per the promise of 'Drill, baby, drill', the price of oil has indeed tanked, and drilling has increased somewhat…but in parts of the world that are not the US, that is. Trump has a hand in it, but he's far from the main character in this game read more Oil prices have decreased, in part due to "Drill, baby, drill" strategy by OPEC+ nations. It's not all because of Trump, though. AI-generated image Immediately after Trump took office as the President of the United States for the second time in January this year, he proclaimed 'Drill, baby, drill' as one of the top agendas of his administration. The Republican vowed an oil drilling boom that he claimed would make the US more 'energy independent' and lower voters' spending at the gas station. The price of oil has indeed tanked, and drilling has increased somewhat…in parts of the world that are not the US, that is. STORY CONTINUES BELOW THIS AD The 'Drill, baby, drill' that is keeping oil prices low has got to do way more with actions being taken by the Organisation of Petroleum Exporting Countries and its allies (OPEC+) than Trump. OPEC+ on Sunday (August 3) concluded a two-year drive to restore oil output that had been slashed during the pandemic-era demand collapse. But instead of clarity for markets, the group has left traders navigating a thicket of uncertainty, and prices under mounting pressure. The latest decision, a 547,000 barrel-a-day increase, reverses the final segment of the bloc's 2023 voluntary cutbacks. It completes, one year ahead of schedule, a strategic pivot by Saudi Arabia and its allies toward reviving lost market share. Yet another 1.66 million barrels per day remain idled and are unlikely to return before late 2026, unless OPEC+ changes course. The move follows months of softening oil prices, driven not only by the bloc's aggressive production policy but also by a broader resurgence in global supply, particularly from non-OPEC producers. In North and South America, output gains are reshaping market dynamics in ways that neither Riyadh nor Moscow can fully control. 'The group is still threading a fine needle,' said Jorge Leon, senior vice-president at Rystad Energy and a former OPEC official. 'On one side, there's Trump's pressure on prices. On the other, there's the cohesion of the alliance to consider , particularly as the Russia-Ukraine conflict complicates every equation.' America's silent surge Though US President Donald Trump has taken credit for easing oil prices, the reality is more complex. According to analysts at the International Energy Agency, US production has steadily crept upward in 2025 despite tepid economic signals and a cooling labour market. This expansion , along with growing output in Brazil and Guyana , has contributed to what the IEA projects as a fourth-quarter global surplus of 2 million barrels per day. Brent crude, the international benchmark, has fallen 6.7 per cent since January, to just above $70 per barrel. Goldman Sachs expects a further slide toward $60, levels well below what Saudi Arabia needs to balance its budget. STORY CONTINUES BELOW THIS AD At the same time, Trump's renewed trade war and tariff escalations have dampened demand expectations. The twin impact , higher supply and slower growth , has weighed on futures, leaving OPEC+ in a quandary over whether to keep pumping or pull back again. Market share versus market stability In theory, the group could now pause. A meeting scheduled for September 7 may serve as a checkpoint, particularly if weak macroeconomic data continues to weigh on demand. Analysts at JPMorgan and Goldman Sachs expect a production freeze rather than another boost. Several crude traders surveyed by Bloomberg also predict a cautious holding pattern. But Saudi Arabia's ambitions may not align with that view. 'Ultimately, market share is now the name of the game.' said Harry Tchilinguirian, research chief at Onyx Capital Group. 'The Saudis won't want to sit on spare capacity if others are capturing customers.' This calculus is especially salient given mounting diplomatic friction between the US and Russia. Last week, Trump threatened secondary sanctions on Moscow's oil buyers, in an effort to force a ceasefire in Ukraine. In response, Russian Deputy Prime Minister Alexander Novak travelled to Riyadh for a rare meeting with Saudi energy minister Prince Abdulaziz bin Salman , a gesture meant to reinforce unity under pressure. Yet the optics belie the deeper tension. If the US moves to isolate Russian crude further, Riyadh may find itself torn between alliance loyalty and an opening to expand its own sales , even at the cost of further undercutting prices. STORY CONTINUES BELOW THIS AD A tough ropewalk for OPEC+ 'We can expect the group to adopt a wait-and-see approach for at least the first several months,' said Greg Brew, senior analyst at Eurasia Group. 'But if there is a contraction in US supply, and if demand growth and the general macro environment remains favorable, I think further unwinding of cuts should be expected.' For now, the group appears to be betting that the oil market will tighten again in 2026, when the remaining 1.66 million barrels per day could be reintroduced under more favourable conditions. Trump's tariffs may have accelerated the downward price spiral, but the more durable forces keeping oil under $75 are structural: supply growth in the Americas, a cooling Chinese economy, and OPEC's own shift toward short-term tactical moves.
Dubai Eye
07-07-2025
- Business
- Dubai Eye
Oil tumbles as OPEC+ hikes August output more than expected
Oil prices slipped more than 1 per cent on Monday after Organisation of the Petroleum Exporting Countries and their allies (OPEC+) surprised markets by hiking output more than expected in August, raising concerns about oversupply. Brent crude futures fell 80 cents, or 1.2 per cent, to $67.50 a barrel by 0010 GMT, while US West Texas Intermediate crude was at $65.68, down $1.32, or 2 per cent. The OPEC+ agreed on Saturday to raise production by 548,000 barrels per day in August. "The increased production clearly represents a more aggressive competition for market share and some tolerance for the resulting decline in price and revenue," said Tim Evans of Evans Energy in a note. The August increase represents a jump from monthly increases of 411,000 bpd OPEC+ had approved for May, June and July, and 138,000 bpd in April. OPEC+ cited a steady global economic outlook and healthy market fundamentals, including low oil inventories, as reasons for releasing more oil. The decision will bring nearly 80 per cent of the 2.2 million bpd voluntary cuts from eight OPEC producers back in the market, RBC Capital analysts led by Helima Croft said in a note. However, the actual output increase has been smaller than planned so far and most of the supply has been from Saudi Arabia, they added. In a show of confidence in oil demand, Saudi Arabia on Sunday raised the August price for its flagship Arab Light crude to a four-month high for Asia. Goldman analysts expect OPEC+ to announce a final 550,000 bpd increase for September at the next meeting on August 3. Separately, the United States is close to finalising several trade agreements in the coming days and will notify other countries of higher tariff rates by July 9, US President Donald Trump said on Sunday, with the higher rates scheduled to take effect on August 1.
IOL News
20-06-2025
- Business
- IOL News
Fuel price pain as missiles fly
While missiles fly thousands of kilometres away, the effects of a deepening conflict between Israel and Iran are beginning to reach South African shores - not through politics or security, but through rising prices at the pump and pressure on already-stretched household budgets. A surge in global oil prices, triggered by military strikes on strategic energy assets and growing fears of supply disruption, is stoking inflation concerns that could ripple through the economy and stall any hopes of interest rate relief. The bombardment of Iranian military targets by Isreal erupted over a week ago as airstrikes targeted Iranian military infrastructure, including pivotal oil and gas facilities such as the South Pars gas field and the Shahr Rey oil refinery, provoking retaliatory missile attacks by Iran on major Israeli cities. This has raised alarm bells among market watchers, particularly given Iran's critical role as the third-largest oil producer within the Organisation of the Petroleum Exporting Countries (OPEC+), contributing around four million barrels of crude oil per day and controlling access to the vital Strait of Hormuz. The Strait of Hormuz is a crucial maritime chokepoint through which approximately 18–19 million barrels per day or 20% of global oil shipments pass, making any potential disruption a considerable concern for worldwide oil supply. Despite Iran maintaining crude exports at 2.2 million barrels per day amid the conflict, rising shipping costs and delays due to the potential blockade of this strategic waterway could influence inflation across the globe. Nolan Wapenaar, co-chief investment officer at Anchor Capital, on Friday said the blockade of the Strait of Hormuz would have far-reaching consequences for South Africa's economy. Wapenaar said this would obviously be a major blockage in the supply of oil to the rest of the globe. 'This could drastically impact the availability of oil and one would expect significantly higher prices. The clear impact in South Africa is higher inflation and quite potentially rising interest rates again,' Wapenaar said. 'The impact of a major supply shock to oil will be more pronounced and detrimental to South Africa. We would expect pressure on the terms of trade from rising oil prices, the South African rand could well weaken, exacerbating inflation pressures beyond just the impact of oil prices and supply.' According to the OPEC+, the global oil demand growth forecast for 2025 remains at 1.3 million barrels per day. The eight OPEC+ countries, which previously announced additional voluntary adjustments, have agreed to start a gradual and flexible return of the 2.2 million barrels per day by implementing a production adjustment of 411 000 barrels per day in July 2025 in view of a steady global economic outlook and current healthy market fundamentals. Analysts warn that the conflict has the potential to reshape power relations within the Middle East and influence OPECʼs internal dynamics as Iran's role as a major oil producer and its strategic position in the Gulf give it considerable leverage. Bianca Botes, director at Citadel Global, said the Strait of Hormuzʼs strategic importance cannot be overstated. 'Any disruption – whether due to military action, electronic interference affecting navigation systems, or blockades – could severely constrain global oil supply. Recent incidents, such as the collision and fire involving two oil tankers near the strait, have heightened these concerns,' Botes said. 'While OPEC members possess some excess production capacity that could theoretically offset Iranian supply losses, the risk of a prolonged or expanded conflict introduces significant uncertainty. 'Analysts warn that oil prices could spike to $100/barrel or even $120/barrel if supply through the Strait of Hormuz is disrupted. Such a price shock would reverberate through global markets, impacting inflation, consumer costs, and economic growth worldwide.' South Africa consumes around 530 000 barrels of oil per day, or more than 25 million litres of petroleum products each year, facilitated by imports and its three operational refiners. Petrol and diesel are the most important petroleum products, accounting for more than 85% of consumption. While the country refines imported crude oil, a portion of its fuel supply also comes from synthetic fuels produced from coal and natural gas. The increase in the fuel price would come as consumers are already battling with the high cost of living after the finance minister hiked the General Fuel Levy (GFL) by 16 cents per litre for petrol and 15 cents per litre for diesel — the first increase in three years — on the back of inflationary pressures. The price of Brent crude oil traded around $77 (around R1 390) per barrel on Friday, heading for a third consecutive weekly gain as escalating hostilities in the Middle East continued to fuel fears of regional supply disruptions. However, Investec chief economist Annabel Bishop allayed fears of any fuel supply shortages but said the blockade of the Strait of Hormuz would raise shipping costs, impacting inflation and also increase shipping delays. 'South Africa mainly gets oil from Africa and Saudi Arabia (which is expected to stay out of the conflict) so the supply is not expected to be interrupted,' Bishop said. 'We are less impacted as we get our oil supply from Africa not the middle east and are food secure. We would be impacted on price not supply as all oil is priced off Brent crude.' Rising oil prices have immediate and far-reaching consequences. Higher crude costs translate into increased transportation and manufacturing expenses, feeding into broader inflationary pressures. This dynamic can slow economic activity by reducing consumer purchasing power and increasing production costs. Inflation in South Africa has held steady at 2.8%, paving the way for potential interest rate cuts though several factors may yet cause the Reserve Bank to adopt a more hawkish stance. Everest Wealth CEO, Thys van Zyl, said rising tensions in the Middle East and discussions about lowering South Africa's inflation target band were two key concerns that could temper expectations of further rate cuts. 'This conflict could quickly filter through to fuel prices and transport inflation – and that will narrow the room for rate cuts,' Van Zyl said. 'Although food inflation rose sharply in May due to the impact of foot-and-mouth disease on beef prices, transport inflation was the only category with negative growth thanks to the past year's decline in fuel prices – which helped keep overall inflation low.' BUSINESS REPORT
News18
17-06-2025
- Business
- News18
Israel-Iran War: No Cause For Alarm Over Crude Oil Supplies At Present, Say Indian Govt Sources
Last Updated: The market is experiencing an oversupply, with no imminent risk of shortage, the sources added There is no cause for alarm regarding the global crude oil supply at present amid the Israel-Iran conflict and tensions in West Asia, Indian government sources told CNN-News18 on Tuesday. The market is experiencing an oversupply, with no imminent risk of shortage, they added. The Organization of the Petroleum Exporting Countries and its allies (OPEC+) are producing approximately 120 million barrels per day. However, production has been slightly reduced by 5 million barrels, bringing the current production level to roughly 97 million barrels per day. Additionally, countries in the Western Hemisphere, such as Guyana, Brazil, and the United States, have become significant oil suppliers, contributing to the increasing global supply. The supply chains remain uninterrupted through key maritime routes, including the strategically vital Strait of Hormuz. Despite ongoing geopolitical dynamics, such as those involving Iran and China, the global oil supply chains continue to function efficiently. For India, which consumes 5.6 million barrels of oil per day, only 1.5 to 2 million barrels are transported through the Strait of Hormuz, indicating a reduced dependency on this route. India has successfully diversified its oil sources, increasing from 27 countries previously to 40 countries currently. This diversification strategy has enhanced the nation's energy security. In terms of strategic reserves, India maintains ample stock, ensuring that alternative sources can be tapped in case of a supply disruption. For liquefied petroleum gas (LPG), 50% of the demand is met domestically, and stock levels are adequate to meet current requirements. In terms of export controls, India has the capability to halt oil exports if necessary to prioritise domestic availability. The government conducts daily review meetings to monitor the situation closely and ensure proactive responses to any changes. Among India's crude imports, 38% come from Russia. Furthermore, the Oil and Natural Gas Corporation (ONGC) has drilled 500 wells, providing India with access to reserves amounting to 42 billion barrels. Regarding the price outlook, while marginal increases in freight and insurance costs may occur, the market has largely already factored in these changes. The overall situation appears stable, with sufficient measures in place to manage any potential disruptions effectively. India is closely monitoring the Iran-Israel conflict to assess its impact on crude oil and gas supply, government sources said. Officials at the petroleum and natural gas ministry are evaluating the potential effects of escalating tensions between Iran and Israel on India's oil supply. Government sources have stated that due to India's diversified energy sources and its reliance on countries in the Western Hemisphere, the nation is prepared for any potential shortages. It has reserves in place for several weeks. India will consider increasing supply from alternative energy sources, including those from West African nations, to ensure fuel supply security in case Iran blocks the Strait of Hormuz. Sources have indicated that there is an ample supply of crude oil coming to the market, so there is no shortage. India is receiving oil from Brazil, Guyana, Canada, the US, and other countries as well. Up until 2025, the Strait of Hormuz has never been completely closed. Only a third of India's oil supply comes through this route. India is also factoring in increased freight corridor charges and a rise in pricing. Senior oil ministry officials and industry leaders are conducting scenario analyses and preparing contingency plans for potential supply disruptions and price volatility, said sources. The oil ministry reports that India maintains crude oil and petroleum product storage facilities capable of meeting 74 days of domestic consumption requirements. The strategic petroleum reserves account for 9.5 days of this total capacity. Get breaking news, in-depth analysis, and expert perspectives on everything from geopolitics to diplomacy and global trends. Stay informed with the latest world news only on News18. Download the News18 App to stay updated! First Published: June 17, 2025, 17:36 IST
