| Key Points: – Oil prices retreat as markets weigh impact of potential US retaliatory tariffs – Treasury signals stricter Iran export limits, targeting 100,000 barrels per day – JPMorgan forecasts Brent crude to average $61 in 2026 amid supply surplus |
Crude oil markets demonstrated heightened volatility on Friday as traders grappled with conflicting signals from geopolitical tensions and trade policy uncertainties. The commodity market’s response highlights growing concerns about global demand amid an increasingly complex international trade landscape.
West Texas Intermediate (WTI) crude retreated below the critical $71 mark, continuing its downward trajectory for the week, while Brent futures showed resilience but remained vulnerable to mounting trade concerns. The mixed performance comes as markets digest President Trump’s latest trade policy moves and stricter Iran sanctions.
Treasury Secretary Scott Bessent’s hawkish statements regarding Iranian oil exports sent initial shockwaves through the market, pushing prices up by 1% in early trading. “We are committed to bringing the Iranians to going back to 100,000 barrels per day of exports, as when Trump left office,” Bessent told Fox Business, signaling a potentially significant supply disruption.
However, the bullish momentum was quickly tempered by escalating trade tensions. President Trump’s signing of a reciprocal tariff plan, although delayed for negotiations, has introduced new uncertainties into the global economic outlook. The move follows recent targeted sanctions against Chinese products, which prompted immediate retaliation from Beijing.
“The demand picture remains in question near term as the retaliation of even higher US tariffs may hamper global demand,” warns Dennis Kissler, senior vice president at BOK Financial. This sentiment echoes throughout the trading community, with many analysts expressing concern about the potential impact on global growth and oil demand.
Adding another layer of complexity to the market outlook, recent developments in the Ukraine-Russia conflict have introduced additional price pressures. JPMorgan’s commodity team, led by Natasha Kaneva, maintains their 2025 Brent forecast at $73 per barrel, citing supply surpluses. Their analysis extends into 2026, projecting prices to decline below $60 by year-end.
Market veterans note that the current price action reflects a delicate balance between supply-side constraints and demand-side uncertainties. “We’re seeing a market that’s increasingly sensitive to macro factors beyond traditional supply-demand dynamics,” explains Maria Rodriguez, chief commodities strategist at Global Market Analytics. “The interplay between trade policy, geopolitical tensions, and energy security concerns is creating a complex trading environment.”
Technical analysts point to key support levels around $70 for WTI crude, suggesting potential downside risks if this threshold is breached. “The market is showing signs of technical weakness, with the 50-day moving average crossing below the 200-day moving average, forming what traders call a ‘death cross,'” notes Alex Chen, senior technical analyst at Energy Market Solutions. This bearish technical signal, combined with fundamental headwinds, could pressure prices further in the near term.
Looking ahead to Q2 2025, market participants are closely monitoring several key factors that could influence price direction. The effectiveness of Iran sanctions, potential shifts in OPEC+ production policy, and the outcome of trade negotiations between major economies will likely determine the market’s trajectory. Goldman Sachs maintains a more bullish outlook than its peers, forecasting Brent crude to reach $85 per barrel by year-end, citing potential supply disruptions and stronger-than-expected Chinese demand.