HG MARKETS:

West Texas Intermediate (WTI) crude oil prices have climbed again, trading around $62.40 per barrel during Asian hours on Thursday. This uptick comes as markets respond to escalating geopolitical tensions and strategic production adjustments by major oil-producing nations. Analysts say the gains mark the second consecutive day of upward movement in crude prices, reflecting growing concerns about potential supply disruptions and the broader implications for energy markets.

On April 16, the United States introduced a new wave of sanctions targeting Iran’s oil exports. These measures are focused particularly on Chinese importers, including a China-based “teapot refinery” reportedly involved in purchasing over $1 billion worth of Iranian crude oil. The sanctions are part of former President Donald Trump’s reinvigorated “maximum pressure” strategy, intended to reduce Iran’s oil exports to zero and put further constraints on Tehran’s nuclear ambitions. The move comes with a broader targeting of several companies and vessels accused of facilitating Iranian oil trade through what the U.S. government refers to as a “shadow fleet” network. These developments have injected new uncertainty into global oil markets, fueling bullish sentiment in the short term.

Simultaneously, key OPEC+ member states, including Iraq and Kazakhstan, have submitted updated production plans that detail additional output cuts. These adjustments are intended to offset prior overproduction and realign with the group’s agreed targets. Kazakhstan, for example, has pledged to cut its output by 297,000 barrels per day to meet compliance obligations. The broader OPEC+ group is expected to continue monitoring adherence among members closely, as it seeks to maintain stability and prevent another market glut.

Despite recent price support, the global oil demand outlook remains cautious. The International Energy Agency (IEA) has maintained its 2025 forecast for oil demand growth at 1.1 million barrels per day, citing expected gains in consumption from China and the United States. However, the agency also warns of a potential supply overhang of around 950,000 barrels per day if OPEC+ continues with current output curbs without further adjustment.

Adding to market uncertainty, the World Trade Organization (WTO) has sharply downgraded its forecast for global merchandise trade growth in 2025, from 3.0% to just 0.2%. This downgrade reflects rising protectionism, including renewed U.S. tariffs, and broader economic headwinds. The WTO cautions that long-term trade decoupling could shrink global GDP by as much as 7%.

As these dynamics unfold, oil markets remain in a fragile balance. While supply-side constraints are lending short-term support, lingering demand-side risks and economic volatility could limit further price gains in the months ahead.