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 potential shifts in U.S. sanctions on Russia, drone strikes on refineries, and upcoming tariffs on Canadian and Mexican oil could impact global oil prices 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 me.

TOM KLOZA: Great to be here.

SANICOLA: So the Trump administration has indicated that they might be open to lifting sanctions on Russia. We don’t have a ton more details, but, obviously, that would have an impact on oil and gas. What’s your read on the situation?

KLOZA: Well, my read is that would be the magic wand for oil prices this year. I mean, if there is any kind of progress for peace and for more Russian oil flows, Russian oil flows are really behind the increases we’ve seen since February 24th, 2022.

There’s diversity of opinion about it. You’ve got one big bank that says it wouldn’t mean anything because they’re still restricted by the OPEC+ quota. And there’s another one that says an immediate five to ten dollar discount. I would say this much. If we do see more Russian oil flowing, and a peace initiative there, it would be very, very bearish for oil prices.

SANICOLA: Of course. Right now, they’re staying a bit elevated because of drone strikes on Russian refining capacity. What’s going on there? That was a bit of a surprise.

KLOZA: Well, you know, that’s the most amazing thing about the market in 2025. By all accounts, global inventories are about as low as they’ve been in the last five years, and yet the market refuses to take off. These drone strikes, I think, are very, very interesting to watch. And ultimately it could be a wild card for 2025. But right now, the community of traders that invests money in oil or speculates in oil is not willing to chase higher prices for the moment.

SANICOLA: Of course, we’ve got, tariffs on Canadian and Mexican oil products scheduled to come back on March 4th. That’s a ten percent tariff on Canadian energy and twenty five percent on Mexican. Is the market pricing that in, or are they skeptical considering the way the conversations went last month?

KLOZA: It’s really not pricing it in right now. That would be a six dollar increase on four million barrels of Canadian oil, and it would probably lead to a greater discount for the oil in Alberta. But right now, we’re not seeing any real change in those discounts. So I think there is a general consensus view that these are negotiating tactics, and perhaps we might see them measured in days, but not in weeks or months.

SANICOLA: Alright. Well, thanks so much for joining us, Tom, and we’ll see everybody next week.