Barron’s Senior Energy Writer Laura Sanicola and OPIS Global Head of Energy Analysis Tom Kloza discuss what’s ahead for energy this week.

Watch this week’s episode for insights into how oil markets are responding to new trade policies, unexpected OPEC+ supply increases, and what these shifts could mean for gasoline prices and energy costs in 2025.

Transcript:

LAURA SANICOLA: Hi, everyone. This is Laura Sanicola, author of Barron’s Energy Insider, and I’m here this week with Tom Kloza, global head of energy analysis at OPIS. Tom, thanks again for joining us this week.

TOM KLOZA: Always good to be here.

SANICOLA: So it’s gonna be hard to avoid talking about the impacts of trade policy coming from the White House throughout the week with tariffs being sort of unexpectedly instated on trading partners, such as Canada and Mexico, and then carve-outs being enforced. And then, now it looks as though the tariffs will be pushed until April. But, obviously, it’s still a bit uncertain from where we’re sitting.

How are oil markets responding to this, given that, you know, we don’t have a lot of information about whether tariffs will actually be implemented in April?

KLOZA: Yeah. It’s very confusing because, notwithstanding the tariff issue, we’ve seen crude oil prices drop by about six dollars a barrel in a month and about four dollars a barrel in the last few days. That was largely on OPEC+ deciding we are gonna put more oil out on market beginning in April. That was not the expectation.

As far as the tariffs go, it works out to about five dollars and twenty cents a barrel on Canadian crude and, you know, probably an unwarranted increase of much, much more for Mexican oil. We did see refiners in the center of the country and in the northern states raise prices for gasoline and diesel when world prices were in full retreat. Ostensibly, they should probably back off of those increases tonight, but the typical consumer, you know, wasn’t aware of more expensive energy because they were looking at the sagging price of Brent, you know, dropping it to into the sixties. And we haven’t dealt with that since the first part of 2021.

SANICOLA: So do you expect consumers will experience lower energy costs in the coming months or higher energy costs?

KLOZA: I think consumers are gonna be fine. I think 2025 is gonna be the cheapest year since 2021. It may not be as cheap as the trajectory indicates at the moment.

You know, there’s a strong case to be made for gasoline prices moving up into the second quarter because we switched to the more difficult to make summer grade of gasoline. I think THE difference will be normally, you know, might see forty or fifty cents of increases. This year, you might be lucky you get ten to twenty cents. And then the second half of the year really looms as a bearish test for liquid oil prices.

SANICOLA: So our oil price is going to be moving more due to supply constraints or pressures or the demand side?

KLOZA: They’re gonna move. I think the biggest thing that influenced the price moves this week was OPEC+ deciding we’re going to put another 140,000 barrels a day or so on the market April 1st. Expectation was not until summer was over or even till 2026. The other thing you had that sort of messes up the scenarios is that Kazakhstan was producing about 700,000 barrels a day over quota. So I think we’re looking at a cheap year for energy and a cheap year for gasoline prices. If there’s any real threat, it probably doesn’t arrive until the hurricane season at the Gulf Coast.

SANICOLA: And we’ve seen refining cracks, for the most part, hold up here. Do you anticipate that they’ll stay okay and refiners will have an okay going, given what’s going on in the macro environment?

KLOZA: Yeah. I think that when you see very, very weak macro pricing for crude oil, refiners tend to do quite well. I mean, we saw the highest US gasoline demand of the year in this week’s report and that gasoline demand is going to move higher. We’re tracking vehicle miles traveled, increases as well. So, you know, people are gonna hit the road. They may not wanna hit the road after they checked their 401Ks, but I think we’ll still see driving account for a lot of gasoline consumption.

SANICOLA: Alright. Thanks so much, Tom. And thanks everyone for joining us, and we’ll see you next week.