Oil Prices (WTI, CL=F) Slide Under $67 Amid Intensifying Geopolitical Turmoil and OPEC+ Supply Shifts
WTI Oil Prices Pressured by Tariff Tensions and Demand Concerns
West Texas Intermediate (WTI), trading under the ticker CL=F, slid sharply to settle at $66.03 a barrel, down $1.01 or approximately 1.5% during Monday’s session. This marks the seventh consecutive weekly decline for WTI, its longest negative streak since November 2023, reflecting investor anxiety over the macroeconomic ramifications of rising protectionist measures from the U.S. administration. Brent crude (BZ=F), similarly affected, dropped to $69.28 per barrel, down $1.08 or about 1.5%, echoing concerns that intensifying tariff wars between the United States and its major trading partners—China, Canada, and Mexico—will severely curtail global demand for oil in the foreseeable future.
WTI's persistent weakness around the critical $67 level signals bearish technical indicators, threatening further downside to the next major support around $65 if the current psychological floor of $67 fails to hold. Even though prices briefly rebounded late last week following news of possible easing of sanctions against Russia contingent upon geopolitical developments, selling resumed aggressively as tariff worries eclipsed short-term bullish narratives. Given the broader market sentiment, CL=F remains vulnerable, and the bearish trend appears deeply entrenched unless a sustained close above $68.00 occurs, potentially signaling a short-term rally targeting the $70 resistance level.
Geopolitical Volatility Spikes as Russia Resumes Kurdistan Oil Operations
Further complicating global oil market dynamics, Russia announced it will restart major oil and gas activities in the Kurdistan Region of Iraq (KRI). Moscow previously dominated KRI’s oil sector through Rosneft, controlling key assets including 80% stakes in significant exploration blocks totaling an estimated 670 million barrels of 3P reserves. Russia’s strategy includes leveraging geopolitical instability, specifically taking advantage of disputes between Baghdad’s Federal Government (FGI) and Kurdistan Regional Government (KRG). By re-entering this region, Russia aims to regain influence eroded by setbacks in Syria and Ukraine.
The strategic implications for CL=F prices are notable; Moscow’s resumed engagement could complicate future production and exports from Iraq—a major OPEC producer currently exporting around 4.5 million barrels per day. Iraq has only tapped approximately 15-20% of its recoverable oil reserves, and intensified Russian control could threaten Western energy companies’ access, such as BP’s recent $25 billion development agreement near Kirkuk. A shift in production dominance in this critical region could substantially alter long-term supply dynamics, indirectly supporting oil prices by raising geopolitical risk premiums.
Supply Pressures Mount as Kazakhstan Cuts Oil Exports via CPC
Adding to the bearish sentiment in global crude markets, Kazakhstan plans a dramatic 70% reduction in crude exports via the Caspian Pipeline Consortium (CPC). Kazakhstan, historically an overproducer among OPEC+ members, indicated this month’s crude shipments would fall significantly from recent highs of 2.12 million barrels per day in February—substantially above its OPEC+ quota. Specifically, the country's Deputy Energy Minister Alibek Zhamauov confirmed March’s output would align closer to 1.5 million barrels per day. This sudden shift in output, influenced partly by recent Ukrainian attacks disrupting pipeline operations, could paradoxically support oil prices in the short term due to constrained regional supplies, counterbalancing broader bearish market trends.
Yet, continued OPEC+ announcements, particularly from Russia’s Deputy Prime Minister Alexander Novak, indicate planned production increases starting April—though subject to market conditions. Such announcements have pressured WTI (CL=F) further, fueling concerns over excess supply amid already fragile demand, underscored by ongoing tariff conflicts and recession fears in the United States. U.S. Commerce Secretary Howard Lutnick underscored the administration’s unwillingness to ease tariffs on key trade partners, exacerbating market anxiety and thus dampening global oil demand forecasts.
Asian Demand Outlook Mixed Amid China Refining Boost, Indian Coal Consumption Shift
Shandong Yulong Petrochemical, China’s newest major refining entity, is poised to start trial operations of a second crude processing unit at a capacity of 200,000 barrels per day. This development potentially boosts China’s crude import demand, previously suppressed due to weak domestic refining margins. Last month alone, the facility secured significant West African and Brazilian crude supplies, signaling robust import potential which could partially offset broader demand concerns. Conversely, China’s overall crude imports contracted by 5% year-over-year for January-February 2025, affected by international disruptions from new U.S. sanctions against Russian energy exports.
Meanwhile, India's thermal coal imports continue declining sharply, down 15.3% in February alone due to increased domestic coal production and muted industrial power demand. This ongoing trend suggests slower-than-expected recovery in energy consumption in Asia’s second-largest economy, indirectly impacting oil consumption growth expectations across the region. Though India's energy trajectory diverges significantly from China, this subdued coal demand underscores a broader moderation in Asian industrial activity, placing downward pressure on WTI prices in the near term.
Major Canadian Merger Highlights Long-Term Confidence in Oil Sector
Despite current bearish sentiments impacting CL=F prices globally, a major Canadian merger between Whitecap Resources and Veren indicates continued investor optimism toward high-quality oil assets. The $10.4 billion all-stock merger will create Canada's largest light oil-focused producer with combined production of approximately 370,000 barrels of oil equivalent per day. This deal particularly strengthens their presence in high-margin unconventional plays including the Kaybob Duvernay and Alberta Montney formations, representing approximately 220,000 barrels per day of premium production. Such mergers signal long-term strategic confidence within specific oil sectors, emphasizing resilience despite immediate macroeconomic concerns currently pressuring global benchmark prices.
Vietnam’s Renewable Policy Shift Could Rebalance Regional Energy Markets
Shifting gears, Vietnam’s decision to retroactively slash feed-in-tariffs for renewable projects threatens $13 billion worth of existing international investments. While this policy primarily impacts renewable energy, potential disruptions in Vietnam’s rapidly growing renewable sector could indirectly bolster regional oil and coal demand—particularly given Vietnam’s heavy reliance on coal for electricity generation and its rising industrial energy needs. Such policy reversals in renewable energy commitments typically translate into increased fossil fuel consumption in developing economies, indirectly providing marginal support for global oil demand projections.
Technical Outlook: WTI (CL=F) Key Levels and Price Projections
Technically, WTI’s (CL=F) inability to reclaim sustained levels above the $68.00 resistance following its recent bounce underscores prevailing bearish sentiment. Currently consolidating just under critical support around $67.00, WTI faces substantial downside risk toward the $65.00 level if bearish pressures persist. Alternatively, a successful breakout and close above $68.00 could signal a brief bullish reversal, targeting the psychologically important $70.00 barrier in the short term. For now, market dynamics heavily lean bearish, with ongoing tariff disputes, uncertain geopolitical factors in the Middle East and Central Asia, and fluctuating Asian energy consumption patterns collectively capping upside potential.
Investor sentiment remains dominated by macroeconomic uncertainty and persistent fears of reduced global energy demand, intensified by looming trade wars, OPEC+ supply expansions, and volatile geopolitical influences emanating from Iraq, Russia, and China. Given this context, WTI crude (CL=F) faces a challenging near-term outlook, requiring a decisive shift in fundamental narratives or geopolitical developments to restore significant bullish momentum. At present, cautious traders might favor defensive positions until clearer macroeconomic signals emerge.
