Trump also threatened punitive measures, including tariffs and sanctions, against Russia and its allies if the Russia-Ukraine conflict was not resolved quickly.
In the Asian session on January 27 (Monday), the global crude oil market continued its downward trend. Brent crude oil futures fell 1.11% to US$77.63 per barrel, and the U.S. West Texas Intermediate crude oil (WTI) fell 1.19% to US$73.77 simultaneously.
This price fluctuation is mainly driven by multiple factors. In the news, U.S. President Trump once again called on the Organization of Petroleum Exporting Countries (OPEC) to lower oil prices to weaken Russia's funding sources in the Ukraine conflict. At the same time, the U.S. government announced the expansion of domestic oil and gas production capacity and the escalation of trade sanctions against Colombia.
In a public statement on Friday, January 24, Trump directly linked OPEC's pricing strategy to the war in Ukraine.He claimed: "If OPEC stops making huge profits and reduces oil prices, the war will end immediately," emphasizing weakening Russia's military capabilities by squeezing its energy revenue.In addition, if the Russia-Ukraine conflict is not resolved quickly, Trump also threatened to impose punitive measures, including tariffs and sanctions, on Russia and its allies.
On the same day, Russian President Vladimir Putin responded by saying he was willing to engage in dialogue with the United States, but OPEC+ representatives said that he currently plans to gradually increase production from April 2025 and will not respond to Trump's demands for the time being.
On the market front, Wall Street is skeptical of Trump's claim to be imminent.Analysts at Goldman Sachs pointed out that the core goal of Western sanctions against Russia is to limit its oil revenue rather than completely cut off exports, which has prompted Russia to continue to supply crude oil to price-sensitive buyers such as China and India at discounted prices through "shadow tankers"(non-sanctioned ships).Data shows that Russian Ural crude oil currently has a discount of US$4 -14 per barrel to Brent crude oil. Despite rising transportation costs, the price advantage still maintains export resilience.
However, JPMorgan warned that about 20% of the world's Aframax tankers (medium crude oil carriers) face sanctions, and logistics bottlenecks may lead to long-term risk premiums, supporting the bottom of oil prices.InvalidParameterValue
On the other hand, geopolitical tensions have further escalated.The Trump administration announced retaliatory tariffs on Colombia on Sunday, January 26, after the country refused to accept two U.S. military transport aircraft carrying deported immigrants.
According to statistics from energy data analysis company Kpler, the United States imported 183,000 barrels of Colombia seaborne crude oil per day in 2024, accounting for 41% of Colombia's total exports; U.S. Energy Information Administration (EIA) data shows that the total amount of crude oil and refined oil imported from Colombia by the United States in 2023 will be 228,000 barrels per day.Although Colombia is not a major oil producer (production in 2024 is about 780,000 barrels per day), this move exposes the Trump administration's tendency to use trade policy as a weapon.Colombia immediately announced a 25% tariff increase on U.S. goods. Trade frictions between the two sides may push up regional energy transportation costs and intensify the pressure on global supply chain restructuring.InvalidParameterValue
From the perspective of supply and demand fundamentals, the crude oil market is facing a seesaw of long and short forces.
The International Energy Agency (IEA) and OPEC have repeatedly lowered their demand growth forecasts for 2024-2025, mainly due to the global economic slowdown and accelerating energy transition.The IEA latest forecast that global oil demand growth will be 862,000 barrels per day in 2025, significantly lower than the pre-epidemic level;OPEC+ announced that it will extend its plan to voluntarily reduce production by 2.2 million barrels per day to March 2025 to avoid oversupply.On the supply side, non-OPEC + countries continue to increase production. The United States (shale oil), Canada (oil sands) and Guyana (offshore oil fields) are expected to add a total of 1.5 million barrels per day in 2025, further squeezing OPEC+ market share.InvalidParameterValue
Institutional divisions over the outlook for oil prices intensify.Beijing Institute of Technology predicts that the average prices of Brent and WTI in 2025 will be US$67 -77/barrel and US$62 -72/barrel respectively, citing the fact that non-OPEC + production increases suppress the price center; Goldman Sachs maintains an optimistic forecast of US$76/barrel, assuming that the geopolitical situation in the Middle East is stable and OPEC+ strictly adheres to production reduction discipline; Fitch Ratings and the European Central Bank are bearish to US$70 -71.8/barrel, emphasizing the drag of inventory accumulation and economic weakness.InvalidParameterValue
Analysts said that the core contradiction in current oil prices is that geopolitical shocks and policy interventions may cause short-term fluctuations, but medium-and long-term pricing power is still dominated by supply and demand fundamentals.Zhao Litao, a professor at Beijing Institute of Technology (energy policy expert), said,"The tight balance of supply and demand in 2025 will be offset by weak demand growth, and the downside risks of oil prices will outweigh the upside."For investors, there are three major variables that need to pay close attention to: first, the degree of internal unity and adjustment of production capacity policies in OPEC+; second, the wavering nature of energy policies during the U.S. election cycle; and third, the pace of recovery of China's demand and the evolution of dependence on Russian oil.
