The Final Countdown for Oil Markets

Tom Kool

Tom majored in International Business at Amsterdam’s Higher School of Economics and later completed an Executive MBA in Energy Transition at the University of Groningen.…

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Oil markets are on edge as Trump’s deadline hits, yet prices remain oddly calm—despite unusual signals like WTI trading above Brent, hinting that volatility or a major disruption could be imminent.

Gas Prices Spike, Growth Slumps, and Trump Declares the End Times—Welcome to 2026

– Amidst Donald Trump’s posts on Truth Social about the death of a whole civilization, the commodity markets are gradually seeing the first signs of a potential period of stagflation developing ahead.
– The US’ service PMI published Monday showed employment shrinking by the most since October 2022, with a similar four-year high posted for February 2026 import prices (March would inevitably trend higher).     
– As average US retail gasoline prices jumped to $4.14 per gallon this week and diesel up at $5.65 per gallon (only $0.17/gallon away from an all-time high), the upcoming inflation reading for March could be eerily reminiscent of 2022.
– Bloomberg predicts the US March CPI to be at 0.9%, mostly coming through higher food and energy prices, as core inflation is expected to remain a tame 0.2-0.3%.
– The International Monetary Fund has signalled it would lower its economic growth forecasts for 2026-2027 and raise inflation projections, formally presenting its World Economic Outlook on April 14.

Market Movers

– US oil major Chevron (NYSE:CVX) has taken a final investment decision on its $700 million Aseng gas project in the offshore Block I of Equatorial Guinea, boosting LNG production in the country into the mid-2030s.
– Japan’s leading utility firm JERA has terminated its 20-year term LNG supply agreement for 1 mtpa of liquefied gas from Commonwealth LNG, potentially allowing Saudi Aramco to exercise its option to double its offtake deal to 2 mtpa.
– US refining giant Phillips 66 (NYSE:PSX) warned investors that a sharp rise in commodity prices led to a roughly $900 million pre-tax mark-to-market loss on oil derivatives, raising questions about the viability of its debt reduction targets.
– French energy giant TotalEnergies (NYSE:TTE) has shut production from its offshore Al Khalij oil field in Qatar, losing some 20,000 boe/d of production until the regional security outlook improves.

Tuesday, April 07, 2026

The post-Easter final countdown is finally here; however, the oil markets’ intense trepidation is yet to be reflected in prices. Having survived the past month of rollercoaster news, we shouldn’t be surprised by any major market development, even if the current $5 per barrel premium of WTI over ICE Brent would, under normal circumstances, equate to a harbinger of apocalypse. Perhaps the apocalypse isn’t that far away from us, with US President Trump’s deadline running out today, paving the way for an extremely volatile short-term outlook ahead.

OPEC+ Keeps on Lifting Production Quotas. OPEC+ members agreed to hike production targets for May 2026 by another 206,000 b/d, continuing with their gradual unwinding even though most Middle Eastern countries have shut in more than 10 million b/d of production due to the Hormuz closure.

Saudi Hikes Asian Prices to Record Premiums. Saudi national oil company Saudi Aramco raised the formula prices of its May-loading cargoes destined for Asian buyers by a record $17 per barrel, putting the country’s Arab Light grade at a $19.50/barrel premium to the Oman/Dubai average.

EU Countries Want to Fleece Oil Companies. The finance ministers of Germany, Spain, Italy, Portugal and Austria made a joint call for an EU-wide windfall tax on energy companies’ profits in reaction to surging fuel prices and all-time high refined product cracks, mirroring 2022 measures.

Dangote Benefits from Africa’s Fuel Vacuum. The 650,000 b/d Dangote refinery in Nigeria is ramping up exports of gasoline and diesel to neighboring countries in West Africa, with the plant’s top management claiming its operating at maximum capacity for the first time in history.

Ukraine Drones Russia’s Black Sea. After Russia’s Baltic Sea ports of Primorsk and Ust-Luga resumed loadings following a week-long drone attack, Ukraine’s drone strikes have started to target the key Black Sea port of Novorossiysk this week, temporarily halting some 0.5 million b/d of oil flows.

India Asks Refiners to Delay Maintenance. The Indian government has asked refiners Indian Oil Corp. and Bharat Petroleum to postpone maintenance at their plants to ensure adequate refined product supply in the country, with Nayara’s 400,000 b/d plant out for a month from mid-April.

Qatari LNG Carriers Rush to the Hormuz. Two stranded LNG carriers laden with Qatari LNG, the al Daayen and Rasheeda, have attempted to transit the Strait of Hormuz, potentially the first LNG vessels to do so, however were turned away by Iran’s Coast Guard and returned to UAE waters.

IEA Warns of Worst Energy Crisis Ever. Fatih Birol, the head of the International Energy Agency, said that the current oil and gas crisis, coming on the back of the US-Iran conflict, is more serious than the ones in 1973, 1979 and 2022 combined, warning of high risks of unrest in developing nations.

Gulf War Extends into Petrochemicals. After Israel’s army targeted Iranian petrochemical plants on Monday, Iran’s IRGC retaliated by attacking Saudi Arabia’s Jubail petrochemical complex, impacting the $20 billion Sadara joint venture between Aramco and Dow for the second time in a week.

Russian Oil Prices Skyrocket. Asia’s desperation for medium sour barrels lifted the price of Russia’s flagship Urals grade to a 13-year high, with cargoes out of the Baltic Sea currently selling for $116 per barrel, almost twice as high as the average $59 per barrel assumed by the Kremlin’s budget.

Israel Restarts Key Gas Field. Chevron and its project partners resumed natural gas production at Israel’s Leviathan offshore field following a 33-day halt mandated by the government after Tel Aviv struck Iran on February 28, with stakeholders demanding downtime compensation from the state.

Tehran Grants Iraq a Special Hormuz Exception. The Iranian military stated that Iraqi oil exporters would be exempt from shipping restrictions in the Strait of Hormuz; it is unclear if the exemption will apply to Iraqi oil produced by Western companies or just the nation’s tankers.

Taiwan Rediscovers Coal as Gas Prices Bite. Taiwan will soon ramp up coal-fired power generation as LNG prices around $20 per MMBtu forced the state-run Taiwan Power Co. to reconsider its heavy reliance on natural gas, aiming to maximize generation from the Mailiao coal plant by May 2026.

Aluminium Prices Rise on Gulf Disruptions. The best-performing base metal of March – aluminium – is rising again this week as the LME’s 3-month futures contract surged past $3,500/mt, pushed higher by the UAE’s al Taweelah smelter needing up to a year to repair its recent drone damage.

By Tom Kool for Oilprice.com

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