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With the Israel Hamas conflict continuing to mount and even reports of the United States preparing to ship $750 million worth of bombs to Saudi Arabia, oil prices are trending lower due to Tuesday's IEA report that forecast lower oil demand growth in 2025 than it was previously predicting.
The IEA didn't change its 2024 forecast, but the oil markets recoiled at the prospect of smaller oil demand growth next year, rising only 950,000 bpd-just a 30,000 bpd reduction from its previous forecast.
At 11:46 pm CST, Brent crude was trading down 1.68% at $80.91 per barrel-a drop of $1.38 per barrel on the day. WTI crude was trading down 2 on the day at $78.62 per barrel. For Brent, the price is still $4 above where it was trading this same time last week.
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The demand growth outlook's effect on oil prices was undaunted by reports of the United States lifting 2021 restrictions on the sale of bombs to Saudi Arabia and its subsequent shipment of more than $750 million worth of bombs to Saudi Arabia-a move that may improve relations between the United States and Saudi Arabia, but could heat up tensions in the Middle East, particularly the war Saudi Arabia against the Houthi rebels in Yemen. The Biden Administration has enjoyed a strained relationship with Saudi Arabia after The U.S. president shunned the Saudi royals due to its assassination of journalist and dissident Jamal Khashoggi.
Those deliveries of the bombs are likely to start in several months. Saudi Arabia's military renewed its strikes on Houthi targets just yesterday, pro-Iranian media reported on Monday, with Saudi drones striking the Al-Ghor area and Kamaran Island near the port of Hodeida.
By Julianne Geiger
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group. More
Comments
The IEA and its Chief Fatih Birol have lost all credibility in the energy world because they deviated from their original remit to provide energy data for OECD decision makers and have become totally politicized and a mouth piece of the environmental activists publishing flawed data in support of climate change.
That is why OPEC+ has stopped five years ago to use IEA's energy data depicting them as politically-motivated, inaccurate and biased.
Dr Mamdouh G Salameh
International Oil Economist
Global Energy Expert