The world energy markets are watching intently as the Trump Administration has until May 12th to decide whether or not to restore U.S. economic sanctions on Iran. Will the outcome alone be the tipping point of the 16% rally in WTI this year? The answer in short, is no.
Factors geopolitical analysts are viewing include:
- Venezuela President Nicolas Maduro sacked the head of PDVSA and handed over control to the military in order to keep the armed forces on his side.
- Accelerated rate of decline in Venezuela’s oil production due to workers quitting at the state-owned PDVSA over unsafe working conditions.
- Workers are upset over their pay due to the hyperinflation of Venezuela’s currency.
- The incapacitation of General Khalifa Haftar of the Libyan National Army due to a stroke.
- The LNA is the main oil and gas power broker in the country that controls the “oil crescent” in the Gulf of Sirte and internal instability within the LNA due to lack of succession could renew a power struggle within Libya.
- OPEC is posting its fifth consecutive record breaking month concerning production cuts as Saudi Aramco prepares for its IPO later this year.
- OPEC’s constant struggle with Non OPEC countries regarding the global supply structure.
Events in every corner of the globe impact the price of fuel such as a tweet, protests, military coup de tats, or weather disruption can cause a domino effect felt on the world stage. As tornado season approaches in the Midwest and military instability rages on in the Middle East, traders and consumers can only speculate on what the future may hold.