The price of Brent crude ended the week at $69.23 after closing the previous week at $70.36. The price of WTI ended the week at $67.31 after closing the previous week at $68.45. The price of Oman crude oil ended the week at $71.08.
At the beginning of last week, we put forth the view that oil prices would move upward if President Trump announced enhanced sanctions on Russian oil. While President Trump did make an announcement pertaining to sanctions, the announcement included a period of 50 days for Russia to reach a ceasefire with Ukraine before the enhanced sanctions would take effect. As such, the announcement had a muted impact on oil prices despite including the threat of secondary sanctions on the countries importing Russian oil.
Note: Since the announcement by President Trump, the EU has recently agreed to additional sanctions on Russian oil, including a lower price cap and restrictions on fuels made from Russian crude.
Last week, relatively positive economic data were released for the U.S. economy and the Chinese economy.
- The U.S. Census Bureau reported that retail and food services sales increased by 0.6% from May and are 3.9% higher in comparison to the previous year. Additionally, the Department of Labor released data that show initial jobless claims were 221,000, a decrease of 7,000 from the previous week's level. The 4-week moving average stands at 229,500, a decrease of 6,250 from the previous week's average. Inflation data continues to be muted with the producer price index (PPI), which pertains to wholesale costs, registering no change in June in comparison to May. On an annual basis, the headline PPI was up 2.3%, compared with 2.7% in May and the lowest level since September 2024. The core PPI (excluding food and energy was at 2.6%, which is the smallest gain since July 2024.
- According to official data, China’s economy grew by 5.2% during 2Q, which compares to 5.4% in 1Q. Despite the relatively strong growth, China’s Commerce Minister stated that China's economy is still facing a very severe and complex situation, and that the government will be taking additional action to address the challenges, including policies to encourage increased domestic consumption and to reduce reliance on exports. China also continues to face deflationary pressures. Producer prices fell 3.6% year-on-year in June 2025, marking 33 months of factory-gate deflation, the worst since July 2023.
Concerns about the global economy, however, remain, with tariffs being a major factor creating uncertainty about the global economy despite some recent positive developments. Besides the recent trade agreement being reached between the U.S. and Indonesia, the big tariff news continues to be the easing of trade tensions between the U.S. and China. U.S. Treasury Secretary Scott Bessent and other U.S. officials are meeting in London in early June with their Chinese counterparts. The meeting appears to have reset the trade negotiations between the two countries and resulted in an agreed framework. The current tariffs on Chinese imports, however, remain elevated at 55%, and there are still issues to be resolved pertaining to critical metals and rare earths. Within this context, China and the U.S. confirmed further details of a trade framework that covers rare earth exports and the easing of technology restrictions. As a follow-up to the agreement in London, China has committed to expediting REE shipments to the U.S. in exchange for U.S. concessions like maintaining Chinese student visas. Additionally, the Trump administration has lifted the ban on the sale of AI chips to China. Subsequently, China’s exports of rare-earth magnets increased last month by almost three times the previous month. The levels of exports remain lower than before the announcement of tariffs by the Trump administration. Additionally, the U.S. is attempting to accelerate domestic production and diversification, but building a robust rare-earth supply chain will take years and significant investment. Stratas Advisors has assessed the challenges and the gaps facing the U.S. and the West as highlighted here.
Meanwhile, the supply/demand dynamic associated with the oil market is presenting challenges for oil prices. During June, Saudi Arabia increased production to 9.8 MMbbl/d and exceeded its OPEC+ quota of 9.5 MMbbl/d. Additionally, Saudi Arabia’s crude exports are expected to increase further with production ramping up, while Saudi Arabia’s domestic demand will decrease with direct crude burn reducing as summer comes to an end. Since the beginning of June, we have been putting forth the view that OPEC+ will continue with the accelerated pace until signs of U.S. shale producers reducing production and backing off plans for increased capex and future production increases. At their last meeting, members of OPEC+ announced a production increase of 548,000 bbl/d in August – after increasing production by 411,000 bbl/d in May, June, and July. OPEC+ is also hinting that another 548,000 bbl/d increase will be added in September.
For the upcoming week, we expect that the price of Brent crude oil will remain below $70 with downward pressure from supply and demand factors, as well as the negative sentiment of oil traders, which together will offset upward pressure from geopolitical developments and the favorable refining environment.
For a complete forecast of crude oil and refined products and other energy-related fundamentals and prices, please refer to our Short-term Outlook.
About the Author: John E. Paisie, president of Stratas Advisors, is responsible for managing the research and consulting business worldwide. Prior to joining Stratas Advisors, Paisie was a partner with PFC Energy, a strategic consultancy based in Washington, D.C., where he led a global practice focused on helping clients (including IOCs, NOC, independent oil companies and governments) to understand the future market environment and competitive landscape, set an appropriate strategic direction and implement strategic initiatives. He worked more than eight years with IBM Consulting (formerly PriceWaterhouseCoopers, PwC Consulting) as an associate partner in the strategic change practice focused on the energy sector while residing in Houston, Singapore, Beijing and London.