Brent oil ends 7-week slide, struggles to hold $70 level

Oil prices are attempting to recover after seven consecutive weeks of decline, but Brent crude continues to struggle to hold the critical $70 level.

US President Donald Trump’s tariff policies, weak global oil demand, and OPEC+’s commitment to a phased production increase in April are weighing on market sentiment, keeping prices under pressure.

Following Trump’s decision to raise tariffs on China from 10% to 20%, Brent crude fell below $70 on March 4 for the first time since October 2024, before settling at $69.32 on March 5.

Between March 3-10, Brent crude hit a weekly low of $68.23 before settling at $70.19, marking a 3.8% decline and its lowest weekly close since November 2021. Meanwhile, West Texas Intermediate (WTI) crude dropped 4.2% from the previous week, closing at $66.85.

Extending its losses into the following week, Brent crude settled at $68.98 on March 10, down 1.7% from the previous day, marking its lowest level since December 2021. However, prices struggled to stay above the $70 threshold throughout the week.

By the week starting March 10, Brent crude settled at $70.24, holding steady from the previous week. Meanwhile, WTI edged up 0.1% to $66.91.

– Unrestricted production policy could trigger market collapse

Weak global demand remains the primary driver behind falling oil prices, and addressing stagnation in oil consumption during the 2025-2026 period will be a major challenge, Fereydoun Barkeshli, president of the Vienna Energy Research Group, told Anadolu.

Barkeshli noted that major market players have been expanding production capacities in anticipation of demand growth in emerging economies, particularly China and India. However, he pointed out that producers are increasingly disappointed with China’s performance, as well as other Asian economies, while Europe’s economic outlook remains weak.

He also explained that while OPEC+ has largely adhered to production cuts, rising output from non-OPEC+ producers such as Norway, Canada, Brazil, and the US poses a threat to the market share of OPEC+ members.

Barkeshli warned that while OPEC+ members are limiting production and losing revenue, non-OPEC+ producers are increasing output and gaining market share. This imbalance could eventually push OPEC+ to ramp up its own oil supply.

‘A free-for-all production policy would lead to a total market collapse. This could be similar to what markets experienced during the 1980s when prices fell as low as $10 per barrel,’ Barkeshli said.

– Sustained sub-$70 oil could undermine investment

Barkeshli emphasized that Trump’s rhetoric continues to exert downward pressure on oil prices. He cautioned that while the former president supports lower prices, a prolonged decline below $70 per barrel for a full quarter could lead energy companies to cut back on investments in new exploration and production.

He also warned that Trump’s tariff policies could escalate into a global oil and energy war, potentially triggering a recession in the world economy.

‘I cannot subscribe to any signals that might lead to a bullish market in 2025 or possibly the following year. The only positive momentum Trump has injected into the market is through his climate policies, particularly his decision to withdraw from the Paris Climate Agreement,’ Barkeshli said.

‘This has provided some impetus to the markets and oil and gas companies. However, it will have a long-term impact on the economy and oil companies. For now, prices seem unlikely to approach $80 unless a major risk emerges,’ he concluded.

By Duygu Alhan