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Last Look - Oil prices rise, but post weekly loss on tariffs and OPEC+ production plans

Latest Insight

Last Look - Oil prices rise, but post weekly loss on tariffs and OPEC+ production plans

Market Insights > First Look

First Look - US sanctions cripple Iran's oil trade, sending prices higher

February 25, 2025 | Christian Drolshagen

US sanctions on Iran increase concerns about tighter oil supply
- WTI futures rose as high as $71.13 a barrel but was trading at $70.88 Tuesday morning
  - Both Brent and WTI contracts made gains on Monday after falling over $2 last Friday
- The newly imposed sanctions target over 30 brokers, tanker operators, and shipping companies involved in transporting Iranian oil
  - The US also sanctioned four Indian companies involved in transporting Iranian oil
- The Trump administration has imposed a “maximum pressure” campaign on Iran with the stated goal of reducing their total exports to 100 MBbl/d, according to Treasury Secretary Scott Bessent
- Market analyst Tony Sycamore says WTI prices are looking for support in the $65-$70 a barrel region
  - If prices can hold in this range, we can expect a recovery back to higher prices
- The sanctions could potentially help oil prices recover, especially as Iraq seeks to bring back export capacity from its Kurdistan region
- Iran's oil exports are closely tied to China, making US sanctions a key factor in its broader trade and diplomatic relations with Beijing

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Natural gas prices are trading higher after falling 24c yesterday
- Weather forecasts shifted cooler, although temperatures are expected to remain near the ten-year average for the next two weeks
- Lower 48 gas production has maintained near yesterday’s levels, around 103 Bcf/d
Woodside to begin work on Louisiana LNG plant (BBG)
- The Australian gas producer and LNG exporter acquired the Driftwood LNG export plant in 2024, following issues with the former owner Tellurian
- Woodside said they are “in the process of bringing partners into that development” and are looking to make a final decision this quarter
- The company also said they are “seeing a lot of slowing” in competing LNG projects but would be interested in possible off-take agreements
Gas E&Ps see supply mismatch (S&P)
- Several gas-focused US producers have reported that they do not plan to increase activity or meaningfully grow production in 2025, possibly resulting in a scenario where supply growth lags demand
- Antero Resources said they see “a significant call on natural gas over the next 12 months as new LNG facilities ramp up” and that “The ability for supply to respond to this increase in demand is likely to be challenged given the low industry activity levels we have today,”

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