Economic Update – Baghdad
Oil prices experienced a decline today, as investor uncertainty regarding the implications of U.S. tariffs on global economic conditions and fuel demand intensified. This drop was further compounded by an increase in production levels from OPEC+.
Brent crude oil settled at $70.11 per barrel, reflecting a decrease of 25 cents or 0.4%, following a significant rise of 90 cents at the close of trading last Friday.
West Texas Intermediate (WTI) crude oil was priced at $66.76 per barrel, down 28 cents or 0.4%, after a previous session where it rose by 68 cents.
WTI crude has now posted seven consecutive weeks of decline—the longest losing streak since November 2023—while Brent crude has decreased for three straight weeks. These variations have been largely attributed to U.S. President Donald Trump’s imposition of tariffs on key oil suppliers, Canada and Mexico, followed by postponed tariffs while increasing taxes on goods from China.
In retaliation, China has enacted tariffs on agricultural products from the United States and Canada.
“Crude oil prices dipped last week amid uncertainty surrounding U.S. tariffs, concerns regarding growth in the U.S. economy, the potential lifting of sanctions on Russia, and increased production from OPEC+,” stated Tony Sikammore of IG in a client memorandum.
Oil prices managed to recover some losses on Friday after news emerged that the U.S. would tighten sanctions on Russia should it fail to reach a ceasefire agreement with Ukraine.
The U.S. is also exploring pathways to reduce restrictions within the Russian energy sector, contingent on Russia’s agreement to conclude hostilities with Ukraine.
In parallel, the Organization of Petroleum Exporting Countries (OPEC) and its allies, collectively termed OPEC+, announced their commitment to increasing oil production starting in April.
Russian Deputy Prime Minister Alexander Novak indicated that OPEC+ may reconsider this decision should market conditions shift towards balance.
Additionally, President Trump conveyed intentions to negotiate a deal with Iran, an OPEC member, aimed at preventing nuclear weapon pursuits; however, Iran has firmly asserted that it is not engaged in such efforts.
A spokesperson for the U.S. State Department reiterated that President Trump is committed to the “maximum pressure” campaign against Iran, evidenced by the recent cancellation of an exemption that permitted Iraq to pay for electricity imports from Iran.
On the contrary, Iranian Supreme Leader Ayatollah Ali Khamenei confirmed that Iran will not be compelled into negotiations.
