IMF says tariffs a significant risk to growth: Update

: Crude oil
25/04/04

Updates Brent price in paragraph 4, adds PVM comment in paragraphs 5-6, Morgan Stanley in paragraph 10

US import tariffs pose a "significant risk" to the global economy, according to the IMF.

"We are still assessing the macroeconomic implications of the announced tariff measures, but they clearly represent a significant risk to the global outlook at a time of sluggish growth," IMF managing director Kristalina Georgieva said. "It is important to avoid steps that could further harm the world economy."

The comments came after two days of turmoil on global oil and equities markets, sparked by the US imposition of sweeping tariffs on trade. For oil markets, this was compounded by a surprise decision from the Opec+ producer group to speed up the unwinding of its output cuts. Front-month Ice Brent crude futures prices fell earlier today to a 3.5 year low of $67.48/bl, down by more than 10pc since US President Donald Trump released details of the tariffs on 2 April.

Analysts at brokerage PVM described the timing of this as "frankly amazing" and said it was "the icing to this global bearish cake".

"The market is now reckoning on the cork being out of the production bottle and believes, as we do, that it will not be pushed back in," PVM said.

US-based bank Goldman Sachs today said it has cut its oil demand growth estimate for this year to 600,000 b/d from 900,000 b/d, based on its economists' new view of economic growth. This and the extra production from Opec+ has led the bank, which was bullish on oil prices for a long time, to cut its Brent crude price forecasts for a second time in three weeks, by $5/bl to $66/bl this year.

Goldman also removed a price range from its forecasts, "because price volatility is likely to stay elevated on higher recession risk."

Like Goldman, UK-based bank Barclays said there is downside risk to its $74/bl forecast for Brent this year. It said oil demand is holding up, "but the potential effect of the trade war on demand is hard to ignore."

Analysts at US-based bank Morgan Stanley said a recession is a realistic outcome of the tariffs decision, although not its base case. Modelled against previous recessions, the bank said there is a risk of oil demand growth falling to zero, compared with its forecast of 900,000 b/d for this year. On supply, it noted that an Opec quota increase "is not the same as an actual production increase", and said it would wait for additional clarity before reassessing its second-half 2025 Brent price forecast of $67.5/bl.

By Ben Winkley

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25/04/07

US producers look overseas as shale stalls

New York, 7 April (Argus) — US shale producers are seeking to deploy their expertise around hydraulic fracturing in international markets, in a marked departure from their recent strategy and one that is set to accelerate as domestic output slows. Continental Resources — whose billionaire founder and executive chairman Harold Hamm was one of the driving forces behind the shale revolution after figuring out how to unlock the vast resources of North Dakota's Bakken basin with horizontal drilling — recently announced plans to explore for unconventional resources in Turkey. And EOG Resources aims to kick-start a drilling campaign in Bahrain. Early successes could prompt a scramble by peers to follow suit, which would be a reversal of the trend seen in the early days of the shale boom when the industry largely retrenched from overseas investments to concentrate on exploiting domestic plays. And while decisions to venture abroad have been mainly based on individual company strategies up until now — and investors have been lukewarm at best — forecasts for shale to start plateauing in the coming years could lend them greater impetus. "Maybe, as they have success, that will draw others in," energy investment firm Bison Interests chief investment officer and founder Josh Young says. "It could be the start of something big." The caveat is that a potential international push at scale is unlikely to happen overnight, and companies such as Murphy Oil and APA — which already have exploration campaigns under way from Vietnam to Ivory Coast and Suriname — have underperformed compared with their rivals. "You are not seeing that market acceptance or market credit for international projects," Young says. That perception may shift if international exploration yields above-average returns for shareholders, boosting the case for producers to seek to build out their inventory further afield as growth in the shale patch slowly grinds to a halt. International exploration may have its own risks, given shale's success story has largely been confined to the US and Argentina to date. But the "cost of entry is relatively low compared to a North American landscape with little room for exploration and high premiums for solid assets in the Permian", consultancy Rystad Energy vice-president for North America oil and gas Matthew Bernstein says. Hamm, who took Continental private more than two years ago after tiring of public markets, recently warned that US shale is beginning to plateau . "What we really need to concentrate on is where we go as we crest right here in America, what the downside looks like," he told the CERAWeek by S&P Global conference in Houston. He also signalled a greater openness to drill outside North America. Talking Turkey Continental recently announced a joint venture with Turkey's national oil company and US-based TransAtlantic Petroleum to develop oil and gas resources in southeast and northwest Turkey. State-owned Turkish Petroleum has pegged initial estimates from the Diyarbakir basin in the southeast that could reach 6bn bl of oil and 12 trillion-20 trillion ft³ (340bn-570bn m³) of gas. The Thrace basin in northwest Turkey may hold up to 20 trillion-45 trillion ft³. "We see immense potential in Turkey's untapped resources," Continental's chief executive, Doug Lawler, says. And in February, EOG Resources announced a tie-in with state-owned Bapco Energies to evaluate a gas prospect in Bahrain. EOG will take on the role of operator, and the venture is awaiting further government approvals. "The formation has previously been tested using horizontal technology, delivering positive results," EOG chief executive Ezra Yacob says. By deploying its existing skillset around horizontal drilling and completions, EOG is confident of achieving results that are competitive with projects in its domestic portfolio. By Stephen Cunningham Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Asian governments hold fire on tariff retaliation

25/04/07

Asian governments hold fire on tariff retaliation

Singapore, 7 April (Argus) — Governments in Asia-Pacific have so far not followed China's lead by retaliating against US president Donald Trump's import tariffs, even as they warn of the potential for long-term economic disruption. The leaders of Vietnam, Malaysia, Indonesia, Taiwan and Singapore said over the weekend that they are not planning to respond in kind to the US tariffs. The restrained reactions came despite China's decision to match Trump's targeted tariffs with duties of 34pc on all imports from the US. China's tariffs, announced late last week, take effect on 10 April, a day after what Trump is calling his "reciprocal" duties on a range of countries. Countries in Asia-Pacific have been hit with some of the highest of Trump's targeted duties. Vietnam, which is facing one of the highest targeted tariff rates of any country at 46pc, is considering removing all its own tariffs on US imports, Trump said following a call with To Lam, general secretary of Vietnam's communist party, on 4 April. The offer has not been officially confirmed by Hanoi. Vietnam benefitted from the tariffs that Trump imposed on China during his first term in office, as some manufacturing and exports were shifted to the country. That helped send its trade surplus with the US to a record $123bn last year, the third-highest of any single country behind China and Mexico, according to US customs data. Malaysia, which faces a 24pc tariff, will not levy retaliatory duties, prime minister Anwar Ibrahim said on 6 April. The US duties are a major threat to the world economy and could force Kuala Lumpur to reduce its forecast for gross domestic product (GDP) growth this year, he warned. The direct impact of the US tariffs on commodity exporters like Malaysia and its neighbour Indonesia has been reduced by the extensive exemptions announced for energy, metals and other commodities. Still, the prospect of a global economic slowdown and disruption to trade flows threatens to have a major impact. Despite their measured approach, governments of emerging Asian economies may struggle to quickly negotiate lower tariffs given Trump's focus on reducing bilateral trade deficits, analysts at UK bank Barclays said on 7 April. The bank has reduced its 2025 forecast for GDP growth in emerging Asia by 0.2 percentage points to 3.3pc and warned of the risk of deeper cuts. Australia eyes price hit The government of Australia, another large commodity exporter, warned on 7 April that the uncertainty caused by Trump's tariffs could reduce consumer confidence and potentially damage the budget by causing a decline in commodity prices. Trump's so-called "liberation day" tariffs are more significant than expected when it released its budget in March, the Australian Treasury said in its economic and fiscal outlook released ahead of federal elections next month. The direct impact of the tariffs on Australia would be limited, but indirect effects would be larger because of the hit imposed on the country's major trading partners, including China, it said. "The potential magnitude and persistence of the economic effects of these announcements has resulted in greater-than-usual uncertainty around the outlook," the Treasury said. Trump has targeted Australia with the minimum 10pc tariff, but this could still disrupt its exports of beef and tallow, among other products. Australian prime minister Anthony Albanese has also pledged not to retaliate with tariffs on US imports. Japan and South Korea, long-standing allies which nevertheless have been singled out for higher US tariff rates of 24pc and 25pc respectively, have also indicated they will not respond in kind. The US accounted for almost 19pc of South Korea's total exports in 2024, including passenger cars, auto parts and lithium-ion batteries. Seoul is considering measures to support its automobile industry in the wake of the tariffs, the trade and industry ministry said. India, which faces a 26pc rate, is considering lowering import tariffs on US goods, including a 2.75pc duty on LNG, to ease tensions. By Kevin Foster, Tom Major and Joseph Ho Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Oil, stock markets slump as tariffs take effect: Update

25/04/07

Oil, stock markets slump as tariffs take effect: Update

Updates with latest oil prices, stock market declines Singapore, 7 April (Argus) — Oil futures and stock markets fell sharply again on Monday after the first tranche of US import tariffs came into force. Crude oil futures fell by almost 5pc, with US benchmark crude WTI futures dropping below $60/bl to a new four-year low. Stock markets in Asia and Europe also dropped sharply. Markets in China — which were closed for a holiday at the end of last week — dropped by around 10pc, while Japanese and South Korean exchanges fell by up to 8pc. The sell-off in crude futures accelerated when markets in Europe opened, in line with big drops in the continent's stock markets. Germany's Dax stock exchange fell by as much as 10pc, while the UK FTSE 100 dropped by up to 6pc. Shares in oil majors BP and Shell were up to 9pc lower. US president Donald Trump's 10pc tariff on imports from all countries took effect on 5 April, with exemptions for some commodities . What Trump has described as "reciprocal" tariffs targeting some of the US' biggest trade partners are due to enter into force at 12:01 ET (04:01 GMT) on 9 April. Trump has given no indication that he will cancel or postpone the tariffs, despite the market turmoil in recent days, although he has held out prospects of negotiated reductions with some countries. The president denied on 6 April that he is crashing the markets deliberately. "But sometimes you have to take medicine to fix something," he told reporters. China announced its own 34pc tariffs on all US imports late on 4 April, adding to the pressure on financial markets. Beijing will continue to take "resolute measures" to protect its interests, state-owned media reported over the weekend. China is the only major US trading partner that has so far retaliated against the US tariffs. Several other countries in Asia have said they do not plan to retaliate or have asked Trump to delay the tariffs. Benchmark crude futures have now fallen by up to 18pc since Trump announced his tariffs. Crude oil came under additional pressure on 7 April after Saudi Arabia's state-controlled producer Saudi Aramco reduced its official formula prices for May-loading cargoes, including particularly sharp cuts for buyers in Asia. The front-month June Brent contract on Ice fell by 4.7pc to a low of $62.51/bl. The Nymex front-month May crude contract fell to $58.95/bl, the lowest since April 2021. By Kevin Foster Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Oil futures, stock markets slump as tariffs take effect

25/04/07

Oil futures, stock markets slump as tariffs take effect

Singapore, 7 April (Argus) — Oil futures and stock markets fell sharply again in early Asian trading on Monday, after the first tranche of US import tariffs came into force. Crude futures fell by more than 4pc after markets opened. US benchmark crude WTI futures fell below $60/bl to a new four-year low. Regional stock markets also dropped sharply. Markets in China — which were closed for a holiday at the end of last week — dropped by almost 10pc, while Japanese and South Korean exchanges fell by up to 6pc. US president Donald Trump's 10pc tariff on imports from all countries took effect on 5 April, with exemptions for some commodities . What Trump has described as "reciprocal" tariffs targeting some of the US' biggest trade partners are due to enter into force at 12:01 ET (04:01 GMT) on 9 April. Trump has given no indication that he will cancel or postpone the tariffs, despite the market turmoil in recent days, although he has held out prospects of negotiated reductions with some countries. The president denied on 6 April that he is crashing the markets deliberately. "But sometimes you have to take medicine to fix something," he told reporters. China announced its own 34pc tariffs on all US imports late on 4 April, adding to the pressure on financial markets. Beijing will continue to take "resolute measures" to protect its interests, state-owned media reported over the weekend. China is the only major US trading partner that has so far retaliated against the US tariffs. Several other countries in Asia have said they do not plan to retaliate or have asked Trump to delay the tariffs. Benchmark crude futures have now fallen by up to 18pc since Trump announced his tariffs. Crude oil came under additional pressure on 7 April after Saudi Arabia's state-controlled producer Saudi Aramco reduced its official formula prices for May-loading cargoes, including particularly sharp cuts for buyers in Asia. The front-month June Brent contract on Ice fell by 3.9pc to a low of $63.01/bl soon after trading opened in Asia on 7 April, before later recovering slightly to trade 2.8pc lower at 10:45am Singapore time (3:45am GMT). The Nymex front-month May crude contract fell to $59.38/bl, the lowest since April 2021, before narrowing its losses slightly. By Kevin Foster Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

WTI crude falls near 4-year low on trade war: Update

25/04/04

WTI crude falls near 4-year low on trade war: Update

Adds end of day changes to stock markets, WTI, Treasuries Calgary, 4 April (Argus) — The US light sweet crude benchmark WTI fell by more than 7pc after China retaliated against the US' latest tariff action, while a selloff in global equity markets deepened. May Nymex WTI fell by $4.96/bl to $61.99/bl, the lowest since 26 April 2021, and is down by $9.72/bl over the most recent two days. Turmoil also continued for a second day in equity markets with the S&P 500 down by 6pc, the Nasdaq down by 5.8pc and the Dow Jones Industrial Average down by 5.5pc from the day prior, which saw similiar losses, wiping out nearly a year of gains for the S&P 500 and the Nasdaq. Trillions of dollars in value were wiped out. The yield on the 10-year Treasury note fell to end the day just above 4pc, its lowest since October, as Treasury prices rallied as investors sought safe haven in the dollar-denominated notes. Treasury yields and prices move counter to each other. The equity selloff persisted on mounting fears of a recession after US president Donald Trump on 2 April imposed sweeping tariffs on dozens of global trading partners for imports into the US. China hit back on Friday with a 34pc tariff of its own against the US from 10 April, driving away any hope by investors for a rebound after a selloff the day before. WTI fell by as much as 9pc during Friday's session after China's retaliation, bottoming out at $60.45/bl. The gloomy economic outlook overshadowed a strong job report that showed the US added a more-than-expected 228,000 jobs in March, showing hiring was picking up last month just as the new US administration began mass federal firings and announced tariffs on trading partners. The IMF say tariffs represent a "significant risk" to the global outlook while US-based bank Goldman Sachs said Friday it has cut its oil demand growth estimate for this year to 600,000 b/d from 900,000 b/d, based on its economists' new view of economic growth. Adding price pressure this week has also been the unexpected plans by eight Opec+ members to unwind production cuts faster , upping output in May by 411,000 b/d. By Brett Holmes Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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