When President Trump initially revived his tariff agenda in April, the announcement caught

markets off guard, triggering volatility. But the impact has since softened. The inconsistency in

Trump’s approach, delaying some tariffs, softening others, and leaving many in negotiation

has eroded the element of surprise. Markets are now conditioned to political unpredictability

and while the headlines remain noisy, their disruptive force has diminished. However, this

doesn’t mean tariffs are harmless. Global institutions like the OECD and IMF have lowered

economic growth forecasts, citing trade tensions as a key factor. Slower global growth directly

undermines oil demand. This explains why oil prices remain stagnant around $70 per barrel

despite summer’s typical demand surge, driving season in the U.S. and rising consumption in

the Middle East. It’s a case of too much supply chasing too little demand.

Is $70 oil a good price for OPEC+?

While better than the feared $40–$50 range, it still falls short of what many member countries

need to balance budgets or fund large-scale national projects. Though producers have agreed

to increase output, much of it reflects regularization rather than new barrels. With some nations

already producing above their formal quotas, others are responding by reclaiming lost market

share. OPEC’s moves suggest they see this price band as sustainable, even if not ideal. The

group appears to be managing expectations rather than celebrating a market win. They refer to

current conditions as “healthy, ” but it’s a cautious stance rather than a confident one.

How much real spare capacity is there?

Not all commitments on paper reflect real barrels. Many quota changes are reconciliations

of existing output levels. Yet countries like Saudi Arabia still hold significant spare capacity.

They could flood the market if necessary, but they won’t unless the strategy makes sense. The

decision isn’t about volume alone; it’s about timing, revenue goals, and long-term strategy. For

now, increased demand during the summer gives producers some room to maneuver without

pushing prices down. But whether they’ll keep adding supply depends on how comfortable

they are with current prices, and how they interpret the evolving balance between market

fundamentals and geopolitical signals. This is not a binary game. It’s a strategic chessboard.