Could the US further limit crude exports from Russia, Iran and Venezuela?
April 1, 2025
Energy prices had a strong up day yesterday as the market was worried that supplies could decline if President Trump follows through on threats to impose more sanctions on Russia and Iran or even military action against Iran if they do not stop their nuclear program.
China’s manufacturing expanded at a faster pace in March and German’s inflation fell much more than expected which could lead to interest rate cuts from the ECB and spur economic growth.
The US said Spanish oil company Repsol’s license to export oil from Venezuela is to be revoked. Repsol said it is discussing with US officials on ways the company can keep operating in Venezuela.
The markets are worried that the US will be effective in limiting crude exports from Russia, Iran, and Venezuela and this is offering support to prices. But the Trump tariffs could hurt the global economy and slow demand which is a headwind for prices.
Kazakhstan is a member of OPEC+ and has been an overproducer exceeding its quota. Apparently, Russia has now taken matters into its own hands by making Kazakhstan’s main oil terminal close 2 of its 3 moorings. Producers will have to cut prodctuion with no place to go with their oil.
The EIA said that US crude oil production fell by 305,000 bpd to 13.15 million bpd in January, the lowest level since February 2024. It was the biggest decline in monthly US oil output since January last year. The main reason for this big decline was the freeze offs that occurred and was not a big surprise to the market. The EIA also lowered its estimate of record US oil prodctuion in December by about 40,000 bpd to 13.45 million bpd. Another note is that frac crews are down 24% from the year prior, down to 209 crews in February and a potential key sign that US production growth could be easing.
US total oil demand in January increased by 5.9% or 1.149 million bpd on the year to 20.736 million bpd. US distillate demand in January increased by 5% or 194,000 bpd on the year to 4.064 million bpd and US gasoline demand increases by 3% or 245,000 bpd on the year to 8.483 million bpd.