Market Analysis of Raw Materials, Focused on the Impact of Recent Geopolitical and Economic Dynamics, Particularly on Brent and WTI Prices

Current Oil Price Context:

Brent and WTI prices have recently increased, supported by hopes for an easing in trade tensions between the United States and China, fueling expectations of increased global demand.

• Brent: $63.70 (↑)

• WTI: $60.60 (↑)

However, sustained price increases will require concrete progress in reducing tariffs between the world’s two largest economies. At this stage, optimism remains cautious, as significant progress is still needed to positively influence long-term oil demand.

Factors Influencing the Oil Market:

1. Trade tensions between the United States and China

   • Impact on demand: If trade negotiations between the U.S. and China result in tariff reductions, demand—particularly from China, the world’s largest oil importer—could be stimulated.

   • However, an immediate impact on oil purchases is expected to be limited, given the structural uncertainties that persist regarding the evolution of bilateral trade relations.

2. OPEC+ and supply dynamics

   • Production increase: OPEC+ continues to ramp up production, which could exert downward pressure on prices in the medium term. Producing countries are seeking to regain market share, especially in the face of uncertain global demand.

   • Production strategy: A continued increase in output could keep prices under pressure, particularly if global demand fails to grow proportionally.

3. U.S. sanctions on Chinese refineries and Iranian imports

   • U.S. sanctions target certain Chinese refineries for their purchases of Iranian oil, which has reduced Iranian oil exports. This puts pressure on Iranian supply, a key player in the global market.

   • This situation increases geopolitical uncertainty, prompting some Chinese buyers to reconsider their sourcing options, potentially shifting demand to other regions (notably the Middle East and Russia).

4. U.S.-UK Trade Agreement

   • The bilateral trade agreement between the U.S. and the UK has eased markets by reducing certain risks, but the details suggest its immediate impact on oil prices remains limited.

   • Nevertheless, the agreement could support greater economic stability in the region, providing slight support to demand for oil products in transatlantic markets.

Short- and Medium-Term Outlook:

• Risk of downward pressure on prices

  • Continued supply growth from OPEC+ and non-member producers (e.g., the U.S.) may lead to a global oil surplus in the coming months.

  • Demand growth may prove insufficient, particularly if tariff reductions between China and the U.S. do not materialize in the short term.

• Focus on geopolitics and regional tensions

  • U.S. sanctions on Iran will remain a key factor, and reduced Iranian exports may cause disruptions in supply chains.

  • The situation in the Middle East—especially tensions between the U.S. and oil-producing countries—could further contribute to price volatility.

• Impact of the U.S.-UK trade deal

  • Limited short-term effect: While the agreement reduces some economic tensions, it does not fundamentally alter oil supply or demand in the short term.

  • Relative stability in transatlantic markets, but no major direct impact on the global oil market.

Conclusion and Recommendations:

Oil prices are expected to continue fluctuating within a moderate range, supported by trade tensions and a cautiously optimistic outlook on demand.
Investors should closely monitor U.S.-China trade discussions and OPEC+ strategy, as these factors will directly influence short- and medium-term price trends.
Persistent volatility is expected due to geopolitical factors, particularly U.S. sanctions and the evolving production dynamics of oil-producing countries.