Week in Review: Crude Snaps 3-Week Declining Streak, Russia-Ukraine Peace Efforts Fail to Lower Prices

Oil prices are ending the week higher, breaking a three-week downward streak. There are ongoing concerns over potential trade tariffs and discussions of a Russia-Ukraine peace deal. Instead of easing prices, the geopolitical landscape has added volatility to the market, with Brent crude and WTI both posting gains this week. WTI is up to $71/bbl this morning, while Brent crude has increased to $75/bbl.

U.S. Treasury Secretary Scott Bessent reaffirmed the Trump administration’s commitment to reducing Iranian oil exports to just 100,000 bpd. President Trump signed a directive yesterday instructing officials to explore reciprocal tariffs to rebalance trade relations, with a decision expected after April 1st. These developments, combined with India agreeing to increase its U.S. oil imports, have added uncertainty to the global energy market.

Refinery utilization across the nation remains lower than usual at 85% due to seasonal maintenance but is expected to rebound to the mid-90% range by summer. Crude inventories remain relatively low, and as refiners ramp up operations, increased crude withdrawals could tighten supply. Colder weather may also impact production as winter concludes.

Diesel supply has fallen below 30 days, a level that warrants monitoring but is not yet a cause for immediate concern. As refineries increase utilization, diesel supply should improve, though market stability will depend on factors like trade policies, crude availability, and geopolitical tensions.

Global oil production is set to grow more in non-OPEC+ countries than in OPEC+ nations through 2026, particularly the United States, Canada, Brazil, and Guyana. The U.S. Energy Information Administration (EIA) increased its 2025 U.S. oil production forecast to 13.59 Mbpd, up slightly from previous estimates. Total world supply is forecasted to rise by 1.9 Mbpd in 2025 and 1.6 Mbpd in 2026, with the United States alone contributing 0.6 Mbpd in 2025 and 0.5 Mbpd in 2026.

Meanwhile, OPEC+ production remains constrained, with only a 0.1 Mbpd increase expected in 2025 and 0.6 Mbpd in 2026 due to ongoing production cuts. The group’s share of global crude output is expected to decline to 46% by 2026, down from 53% in 2016. Although OPEC+ is set to increase production in April, its ability to stabilize prices will depend on broader market dynamics, including demand fluctuations and potential tariff impacts.

One of the hot-button topics from this week has been the impact of new U.S. sanctions on Russian oil exports. The sanctions, imposed on January 10th, have stranded millions of barrels of Russian crude on ships, forcing refiners in China and India to seek alternative sources from the Middle East, Africa, and Brazil. This has driven up crude prices and increased shipping costs, as traders scramble for non-sanctioned vessels to avoid secondary penalties.

India, which had recently increased its reliance on Russian oil, now faces higher costs and fewer available cargoes. The narrowing discount between Russian crude and Middle Eastern oil has left Indian refiners with little incentive to continue purchasing from Russia, forcing them to reevaluate supply chains. Meanwhile, Chinese refiners are also feeling the pressure, with many opting to shut down for maintenance rather than operate at a loss.

Adding further volatility, the U.S. has intensified pressure on Iran, with threats to reduce Iranian oil exports to zero. Goldman Sachs predicts that tighter Russian and Iranian supply could push Brent crude prices into the high $80s per barrel by May.

While oil production is expected to increase in the U.S. and other non-OPEC+ countries, uncertainties surrounding tariffs, U.S. sanctions on Russia, and potential OPEC+ production adjustments will continue influencing prices. Any new trade restrictions could impact crude flows, refining costs, and global fuel availability, potentially driving further price fluctuations.

Prices in Review

Crude opened on Monday at $71 before trading up the next two days. On Thursday, crude started tapering off again and continued the declines the rest of the week. This morning, crude opened at $71.52, and overall increase of 52 cents or 0.73%.

On Monday, diesel opened at $2.4367 and increased both Tuesday and Wednesday before beginning its descent on Thursday. This morning, diesel opened at $2.4544, an overall increase of almost 2 cents or 0.726%.

Gasoline opened the week at $2.1005, saw a modest increase on Tuesday, and jumped to its highest point for the week on Wednesday. Gasoline began declining on Thursday before reversing the trend Friday morning. Today, gasoline opened at $2.1125, an overall increase of less than 1 cent or 0.57%.