Our expectation is that he might announce a 25% tariff on Mexico and Canada, but not necessarily implement it immediately. Instead, he could introduce a grace period, giving these countries time to negotiate on issues he prioritizes, such as immigration and alleged drug trafficking. It’s clear that no final decision has been made yet and that there are stillnsignificant differences of opinion within Trump’s inner circle.
Any clarity on where US sanctions are headed?
As we wrapped up 2024, we were focusing a lot on the potential for stricter sanctions enforcement, and that’s certainly playing out. At Energy Aspects, we had warned about the risks of market tightening in 2025, and with the Russian sanctions, we’re already seeing that. Now, the key question is whether Trump will strictly enforce or further tighten those sanctions, and what happens with Iran. One possible scenario is that he takes a hard stance on Russia first, while holding off on Iran. A few months ago, we wouldn’t have expected that. But now, it seems like the Trump team is keeping the door open for diplomacy with Iran, at least for the time being.
Does OPEC+ have any room to manoeuvre this year with so much spare capacity?
That remains a significant factor. We don’t see OPEC+ deviating from their market-based approach for now. The April timeline for bringing back volumes still seems the earliest they would take any action. But with tightening sanctions, there is room for them to increase production. Our 2025 balance projections already show a deficit in commercial crude inventories. We’re no longer expecting inventory builds.
Outlook on China’s role as the bedrock of incremental demand growth?
While China was previously the primary driver of growth, we’re now seeing demand more evenly distributed across emerging Asian economies. Still, China remains a dominant player for crude oil - simply because most new refining capacity coming online this year is there; we’re talking about roughly 600, 000 b/d of additional runs, so a substantial increase. There are refinery expansion projects in other parts of the world, including the Middle East and India. However, projects in countries like Indonesia and Thailand have faced delays.