Mansfield Oil Company

07/11/2025 | Press release | Distributed by Public on 07/11/2025 11:35

Week in Review – Tariff Threats, Demand Revisions, and Diesel Spreads Stir Volatility

Crude oil prices saw modest gains early in the week before slipping on renewed tariff threats from President Trump. On Wednesday, he proposed sweeping tariffs, including a 50% tariff on Brazilian exports and blanket tariffs of 15-20% on a wide range of imports from major trading partners like South Korea and Japan. The market response was cautious, as investors weighed the broader economic implications of trade restrictions. While previous tariff threats have yet to be put in place, the uncertainty remains a bearish overhang for oil demand growth. Brent crude ended the week near $69/bbl, while WTI hovered closer to $67/bbl.

Adding to the bearish sentiment, the International Energy Agency (IEA) and OPEC both trimmed their global demand forecasts. The IEA now projects global crude demand will grow by just 700,000 bpd this year, marking the slowest annual increase since 2009, outside the pandemic. OPEC's updated World Oil Outlook echoed the slowdown, citing weaker economic momentum in China, accelerating EV adoption, and continued oil substitution. While OPEC sees demand reaching 111.6 Mbpd by 2029, it cut its near - and mid-term projections compared to last year's outlook.

Despite this, major OPEC+ producers remain bullish on short-term supply additions. Saudi Arabia, the UAE, and Kuwait reaffirmed that the group's recent output increases were necessary, pointing to continued tightness in global inventories-particularly low diesel and reduced reserves at the Cushing hub in the U.S. Saudi Aramco raised its prices for Asian buyers, citing "healthy global oil demand," and ministers emphasized the need to restore market balance. However, concerns linger that supply could begin to outpace demand later in the year as refinery runs slow and production quotas unwind.

In refined products, the diesel market experienced sharp regional dislocations throughout the week. The east-west diesel price spread reached its widest level in more than two and a half years, with Asian barrels trading nearly $120/ton below European prices. This arbitrage opportunity is sending increased diesel cargoes from India and the Middle East to Europe. However, backwardation in futures markets-where near-term prices are higher than forward contracts-poses risks to traders, as cargoes could lose value in route.

Meanwhile, U.S. domestic policy drew attention as Trump's newly signed budget drastically reduced planned spending to refill the Strategic Petroleum Reserve (SPR), despite his earlier pledge to "fill it right to the top." With the SPR sitting at just 56% capacity, questions are rising over its relevance in a country that has become a net oil exporter. Nonetheless, the reserve remains a geopolitical tool, especially during global crises.

Prices in Review

Crude prices opened at $67.13 on Monday and saw modest gains through midweek, peaking at $68.29 on Thursday. However, prices slipped on Friday, opening at $66.85 on renewed concerns over global demand and inventory levels. Despite the late-week pullback, crude posted a slight weekly increase of $0.28 or 0.42%.

Diesel prices opened at $2.3650 on Monday and saw steady gains early in the week, reaching a high of $2.4380 on Wednesday. Prices then dipped slightly on Thursday to $2.4103 and edged lower again on Friday, opening at $2.3996. Despite the minor end-of-week decline, diesel posted an overall increase of 3.46 cents, or 1.46%, for the week.

Gasoline prices opened at $2.1180 on Monday and trended upward through midweek, reaching a high of $2.1941 on Thursday. The sharpest increase occurred between Monday and Wednesday, with prices rising more than 6 cents. However, prices eased slightly on Friday, opening at $2.1618. Overall, gasoline posted a weekly increase of 4.38 cents, or 2.07%.

Mansfield Oil Company published this content on July 11, 2025, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on July 11, 2025 at 17:35 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at support@pubt.io