Trading Signals & Macro Trends

Russia update: Finally coping with the shock of January’s sanctions

Key takeaways:

• Russian seaborne crude shipments were at 3.1 million bpd during 1-20 April, little changed from January

• Crude loadings to tankers included on the SDN sanctions list in Russian ports totaled around 365,000 bpd in weeks 13-16

• Refinery runs increased from around 5.2 million bpd in March to 5.46 million bpd in the first half of April

Three months after massive new sanctions against Russian oil exports, Russian oil loadings are finally signaling the sale of all barrels available for export, and even some reduction in inventories between 1 and 20 April.

Based on OPEC+ decisions, Russia will increase production in May and can probably further raise oil shipments due to stockpiles and the expected reduction in refinery runs during the spring maintenance period. Russian operators are also ramping up drilling, possibly signaling further acceleration of production growth by OPEC+.

The cessation of drone attacks on Russian refineries allowed runs to increase by more than 200,000 barrels per day (bpd) in April compared to February-March. However, the ceasefire agreement has not yet been extended.

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Rich in heavy crude, short on time: Can Colombia capitalize on tight market?

Colombia’s heavy sour crude is highly desirable, with sanctions on Venezuela and falling crude output levels in Mexico threatening heavy sour supply to the US. However, the country’s declining production harms its ability to capitalize on a market short on heavy and medium grades. Mature assets and a lack of discoveries are driving falling output, though Ecopetrol and regional independents are employing enhanced oil recovery (EOR) techniques to improve production in existing blocks with some success. With government policies as a wall to exploring new acreage, a focus on increasing production at existing fields will be the best avenue Colombia can take to quell declining production and maintain exports.

Colombia was the fourth-largest crude oil producer in Latin America last year, only behind Brazil, Venezuela, and Mexico. However, Argentina’s growing shale output so far in 2025 is propelling it ahead of the production-declining Colombia. Crude oil output in Colombia averaged almost 750,000 barrels per day (bpd), with condensate averaging just 16,000 bpd in 2024. The country primarily produces heavy crude, with the heavy sour grades making up 50% of the total production last year, followed by heavy regular and heavy sweet grades. Colombia often seems to be overshadowed by other Latin American producers – Brazil, Guyana, and Argentina – that, unlike Colombia, are growing domestic production rapidly. On the other hand, Colombian production has been on a declining slope since 2015, when crude and condensate output peaked at 1 million bpd, falling by 23% in 2024.

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Significant macroeconomic weakness could widen WTI-Brent spread to $5

The global economy is currently experiencing severe headwinds driven by growing trade uncertainty between the US and most of its major partners. Prospects of a slowdown in oil demand has gained momentum in recent weeks, driven by the escalating tariff war and sanctions as the US enacts policies on multiple fronts.

Oil markets are facing immense strain from the announcement of sweeping tariffs from the US on most of its trade partners, which have been subsequently put on hold, except for China where both nations now impose reciprocal duties on each other well north of 100%. Prices are also under strain from the surprise OPEC+ move to accelerate the pace of unwinding of the production cuts. 

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Agency alert: OPEC slashes 2025 demand growth forecast by 150,000 bpd

Highlights:

• OPEC revised its 2025 crude demand forecast in the April report, estimating a year-on-year increase of 1.30 million bpd. This forecast significantly exceeds the 730,000-bpd growth forecast by the IEA and the 900,000-bpd forecast by the US EIA.

• OPEC also revised down its 2026 demand forecast to 106.38 million bpd, up by 1.28 million bpd from 2025 to 2026.

• The group pared its 2025 non-OPEC+ liquids supply estimate to 54.10 million bpd, down 110,000 bpd from last month’s estimate, projecting a year-on-year increase of 900,000 bpd.

In its much-awaited April Monthly Oil Market Report (MOMR) report, OPEC indicated a downside to global economic growth from 3.1% in its March report to 3.0% in the latest one, as tariffs threaten to derail global gross domestic product (GDP) growth. The group also slashed its crude demand growth forecast from 2024 to 2025 to 1.30 million barrels per day (bpd), which is significantly higher than 730,000 bpd growth forecast by the International Energy Agency (IEA) and 900,000 bpd by the US Energy Information Administration (EIA). While EIA and IEA have revised their global demand growth forecasts down by 300,000 bpd due to the tariffs, OPEC only revised down the growth by 150,000 bpd. OPEC has historically been known to have a more optimistic view of global oil demand among the agency trio. However, the group also axed its 2026 demand forecast by 150,000 bpd and now expects total demand for next year to come in at 106.38 million bpd. 

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Crude oil stocks to fall on seasonal refinery throughput gains

Highlights:

• Crude oil stocks draws expected this week on higher domestic refinery throughput, which is moderately bullish for crude oil prices. Positive news on the US-Iran nuclear talks could be a larger factor in setting market sentiment.   

• Gasoline stocks remain high despite draws expected this week. Cracks in the East Coast have strengthened with summer specifications now in place. East Coast supply is not constrained, and only modest crack improvements are expected on the stock draws expected this week.

• Diesel stocks remain low but are expected to build this week. Cracks have weakened and will continue to decline on seasonal stock builds.

The US Energy Information Administration (EIA) weekly inventory report is expected to show a commercial crude oil stocks draw of 1.4 million barrels for the week ended 18 April despite a forecast imports growth of 312,000 barrels per day (bpd). Refinery throughput, meanwhile, is expected to rise and remain above the five-year average. The stock draw puts the crude oil inventory 15 million barrels below the seasonal five-year average. In the same reporting period, crude oil exports are expected to decline by 567,000 bpd and will remain below last year’s level as global tightness of medium and heavy crude oil continues to limit the availability of imported supply. Last week’s crude oil inventory saw a build of 500,000 barrels, which aligned closely with Rystad Energy’s estimate of a 400,000-barrel build. The EIA adjustment factor this past week was 722,000 bpd, an increase of 1.7 million bpd from the previous week. The 52-week rolling average adjustment factor used in our balance estimate has been updated to -33,170 bpd for the week ended 11 April. 

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