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 oil price volatility due to U.S. sanctions on Venezuela and Iran, OPEC’s likely extension of production cuts, and uncertainty surrounding tariffs on Canadian and Mexican oil.

Transcript:

LAURA SANICOLA: Hi, everyone. This is Laura Sanicola, author of Barron’s Energy Insider. And joining me again this week is Tom Kloza, global head of energy analysis at OPIS. Tom, thanks again for being here today.

TOM KLOZA: Hi. Nice to be here.

SANICOLA: So oil has had a few upward pressures this week after a dismal start to the year, what with the Trump administration sanctioning barrels of oil from both Venezuela and Iran. What do you think is the long-term impact of this on the oil market?

KLOZA: Well, those were the expectations. And particularly with Venezuela, we’re gonna lose the kind of crude that we need right now, which is the heavy sour crude. I think probably that these actions were baked into the price.

We’ve also baked into the price the notion that OPEC’s going to meet and probably push back the restoration of some of the cuts into the summer or so, but you never know. This was a wild week. It was a week that saw some of the lows for the year, but it was very, very, volatile.

SANICOLA: So you think that, in response to the weakness in the global environment, that OPEC is probably not going to bring back production on target. And, obviously, they’ve been delaying for the better part of a year now.

KLOZA: Yeah. I do. I think that they will extend the cuts, certainly through April and perhaps into the end of June. You know, the the fact of the matter is with five, five and a half million barrels a day of spare capacity, the market’s not willing to chase crude oil prices higher. You know, that’s been something that’s been consistent all year, and I think it’ll be something we see in the second quarter and certainly in March as well.

SANICOLA: it’s sort of hard to tell how the market is pricing in the potential for more tariffs on Canadian oil, ten percent, and twenty five percent tariffs on Mexican oil, which are supposed to begin this week after last month being canceled at the last moment. Do you think they’re being priced in? How long do you think can the cycle of tariffs or almost tariffs will last?

KLOZA: I think they’re starting to get priced in. I mean, you’re talking about a five or a six dollar barrel increase in Canadian crude. You’re also talking about fewer exports from Canada into the US Northeast. So the US Northeast might be some something to watch. But I think there’s a genuine sort of recognition that these can’t last long. That certainly would be it would be something that kind of screws up the president’s agenda to really, really usher in low energy prices for all of two 2025 and beyond.

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