Global oil markets are reeling from a sharp downturn, triggered by a confluence of factors including renewed trade tensions and shifting strategies from major oil-producing nations. The price of North Sea Brent crude has plummeted, reflecting investor anxiety and uncertainty about future demand and supply dynamics.

Market Overview

As of 1:15 p.m. today, a barrel of North Sea Brent crude is trading around $65.35, marking a significant 6.4% decrease as midnight. This price point represents the lowest level observed as December 2021, signaling a potential shift in the energy market landscape.

The Oslo Stock Exchange is also feeling the impact, with the main index down approximately 4%. Several major oil stocks are experiencing notable declines:

• Equinor: Down 3.25%
• Aker BP: Down 5.46%
• Vår energi: Down 4.2%

Analyst Perspectives: A “Collapse” in Prices

Bjarne Schieldrop,chief analyst at SEB,characterized the recent price drop as a collapse,highlighting the severity of the market reaction. This sentiment is echoed by his colleague, Ole Hvalbye, who attributes the downturn to a double blow: new tariffs and indications of increased production from OPEC and Russia.

Hvalbye emphasized the rapid shift in market sentiment, noting that prices were above $75 per barrel just two days prior.there was a fierce and positive growth in the prices. Then Trump went on the podium and started talking about tariffs, he stated. The analyst elaborated on the demand-side concerns:

Even tho he now does what he has said he wants to do, you are taken to bed a bit. What is worried about is a realy weak financial situation and that the macro image shoudl fade. Prices went pretty quickly from $75 to $71, becuase people were worried about demand.
Ole Hvalbye, SEB Analyst

OPEC’s Influence and geopolitical Factors

Beyond demand concerns, analysts point to increased oil supply as a contributing factor to the price decline. Hvalbye noted that OPEC and Russia signaled they would release three times more barrels than anticipated, exacerbating fears of oversupply. just hours after that again, Opec and russia went out and said they will send three times more barrels than expected to the market. Then there will be fear that the supply side also pushes the prices down. Now the oil price is down to less than $ 68 a barrel, down $ 7.5 in a day and a half. It is quite unusual, Hvalbye explained.

The analyst also suggested potential political motivations behind OPEC’s actions, linking them to broader geopolitical strategies.It is indeed not certain that all the volumes from Opec will come, but it truly seems to be a different rhetoric than before and more acceptance for low prices. It may seem like this is related to politics and Trump’s agenda about a lower oil price. This has probably also surprised the market a bit, Hvalbye added.

Natural Gas Prices Also Affected

The decline in oil prices is mirrored by a softening in natural gas prices, further impacting Norwegian energy companies. The Dutch gas price TTF is currently trading down 2% at 38.6 euros per megawatt hour, nearing its year-to-date low of 36 euros from early last month. This trend adds additional pressure on companies like Equinor and Vår Energi,which have significant exposure to both oil and gas markets.