A possible escalation of tensions between the United States and Iran has been by far the most intriguing development of the past week. Drones being shot down, military strikes called off by President Trump followed by another round of sanctions and escalating verbal altercations between the two. Concurrently, the US-China trade conflict has deteriorated amid threats from the Trump Administration of imposing tariffs on $300 billion worth of Chinese imports, including drilling components et al. (the media has already picked up the story of how these tariffs would backfire on the US oil industry).
The upcoming G20 Summit in Osaka, Japan will focus on the security of global crude supply and might even bring about a breakthrough in US-China trade talks (or at least dent the enthusiasm of those advocating further tariff hikes). The OPEC/OPEC+ meeting on July 01-02 will then provide the ultimate pricing cue for oil in the coming months. As of Wednesday afternoon, global benchmark Brent traded at $65 per barrel, whilst WTI was in the $59-59.2 per barrel interval.
1. Latin America’s Economy Malaise Brings Refining Down
- The economic fragility of leading Latin American nations is depressing product markets in Brazil and Argentina, despite both having avowedly pro-business leaders at the helm.
- President Jair Bolsonaro’s pre-election zeal has quickly evaporated as Brazil’s GDP is currently expected to grow by a mere 1 percent…