Energy Industry Weekly Update

Introduction

An overview of the biggest stories in the Energy Industry this week. 

This week’s major events in the oil and gas market include President Trump’s assertive energy and trade policies, impacting both oil and natural gas markets as well as ongoing geopolitical risks in the Middle East and Ukraine influencing oil prices.

While oil prices saw a slight uptick due to the renewed Houthi attacks and Chinese economic data, broader concerns about slower GDP growth and increased supply created downward pressure.

The larger natural gas market in the U.S. is experiencing price weakness due to record production and mild weather forecasts.

The Trump Administration’s Influence on Energy Markets and Trade

LNG Push to Asia:

President Trump is actively promoting Alaskan LNG exports to Asian allies, particularly Japan and South Korea. Alaskan officials are visiting Japan to seek investors for the “$44 billion 1,300-km (800-mile) pipeline” project. Trump believes this project “could pump trillions of dollars into the U.S.” and has directly asked Prime Minister Ishiba for support, with South Korea agreeing to discuss it.

Skepticism from Japanese Energy Firms:

Despite Trump’s claims, Japanese energy firms remain “skeptical of the project’s feasibility,” primarily due to concerns about “higher cost” and the project’s economic sustainability given Alaska’s extreme conditions and the pipeline’s scale. Inpex CEO Takayuki Ueda questioned, “The question is whether it can be economically sustainable.”

Trade Tensions and Tariffs Impacting Oil Demand

Goldman Sachs lowered its oil price target due to expectations of slower U.S. GDP growth stemming from Trump’s tariff policies. They anticipate “slower US GDP growth on higher tariffs” will lead to lower oil demand. Trump recently imposed “25% tariffs on aluminum and steel imports from all countries,” prompting retaliatory measures from the European Union.

“Energy Dominance” Agenda and Industry Concerns:

While oil executives at CERAWeek cheered the rollback of Biden-era climate policies, Trump’s “aggressive trade stance is giving some in the industry a case of the jitters.” His tariff war with Canada has placed “downward pressure on crude oil prices.” Harold Hamm,  warned that “if oil prices stay this low, drilling in some of America’s prized shale fields could grind to a halt,” “When you get below the cost of supply,” he said, “You can’t ‘drill, baby, drill.’ That shuts you down.”

Geopolitical Risks and Oil Price Volatility:

Renewed Attacks on Houthis in Yemen

The U.S. launched “extensive attacks on Yemen’s Houthis” in response to their continued targeting of ships in the Red Sea. This “fresh violence has all the components needed to escalate into a broad regional conflict.” A U.S. official indicated the campaign “might continue for weeks,” as Trump vowed to use “overwhelming lethal force.”

Potential for Broader Middle East Conflict

Concerns remain about the Houthis targeting U.S. allies’ interests and potential attacks on Middle East oil and gas facilities, which “could disrupt supplies from the major producers, leading to a spike in energy prices.” The risk of direct U.S. attacks on Iran could lead to a “severe escalation in regional tensions,” with Iran previously threatening to block the Strait of Hormuz.

Ukraine War Negotiations

The Trump white house announced plans to speak with Russian President Vladimir Putin about ending the Ukraine war, with potential “territorial concessions by Kyiv” being discussed. Analysts noted that a Russia/Ukraine peace deal “would likely increase Russian crude to the world market,” putting downward pressure on prices.

Impact on Oil Prices

The attacks on Houthis, coupled with Chinese economic data fueling hopes for higher demand, have caused oil prices to edge slightly higher.

Oil Market Fundamentals and Production Dynamics:

Goldman Sachs Lowers Oil Price Target

The firm reduced its December 2025 forecast for Brent crude to $71 per barrel, citing a “shift in market focus from downside risk to Russia and Iran supply to softer US GDP growth.” They also anticipate “higher OPEC+ supply next quarter.”

China’s Demand Signals Mixed

Chinese crude oil throughput rose by 2.1%, supported by a new refinery and holiday travel. However, “weak refining margins persisted, pointing to sluggish economic activity.” Diesel fuel demand remains under pressure due to the property sector downturn.

U.S. Shale Production Concerns

Harold Hamm warned this week that low oil prices near $65 a barrel put many U.S. shale fields on “shaky ground.”

Natural Gas Market in the U.S

Prices Fall to Two-Week Low

U.S. natural gas futures eased due to “record output, negative spot prices at the Waha Hub in West Texas and forecasts for the weather to remain mild through the start of April.”

Pipeline maintenance on Kinder Morgan’s El Paso Natural Gas pipe and other pipelines caused gas prices at the Waha Hub to turn negative for the first time since November 2024, as gas associated with oil production was trapped.

Natural gas production in the Lower 48 states has risen to a record “105.9 billion cubic feet per day (bcfd)” in March.

Strong LNG Exports

The U.S. became the world’s largest LNG supplier in 2023, and despite price current weakness, gas flows to U.S. LNG export plants remain high, averaging “15.7 bcfd so far in March” of 2025.

Quotes of the Week

• George Glass (Trump’s pick for Japan ambassador): “Japan has committed to reduce the trade deficit with us and its reliance on Russia by purchasing U.S. liquefied natural gas. I will hold them to that promise.”
• Goldman Sachs on oil price selloff: “The selloff mostly reflects a shift in market focus from downside risk to Russia and Iran supply to softer US GDP growth.”
• Harold Hamm (Continental Resources founder) on low oil prices: “When you get below the cost of supply, you can’t ‘drill, baby, drill.’ That shuts you down.”
• Eli Cohen (Israel’s Energy Minister) on gas exploration: “Natural gas is a strategic asset that strengthens our economic and diplomatic standing worldwide, particularly in the Middle East. That’s why we are working to expand natural gas production for both the domestic market and exports, especially in these times.”

In Summary

The current global energy market continues to be characterized by the interplay of geopolitical tensions, economic forecasts, and strategic moves by energy producers and consumers. Such significant flux and developments highlight the balance between supply, demand, and pricing in the market.

While the Trump administration’s efforts to boost U.S. energy exports and address trade imbalances are evident, they are meeting with market skepticism and creating new sets of challenges. Ongoing instability in the Middle East adds a layer of uncertainty to oil supplies and prices.

The price of Brent crude ended the week at $70.62 after closing the previous week at $70.45. The price of WTI ended the week at $67.19 after closing the previous week at $67.05.

Sources

• “Latest Oil Market News and Analysis.” March 16, 2025. – Link
• “Goldman Sachs Lowers Oil Price Target on Expectations of Slower GDP Growth.” March 17, 2025. – Link
• “Alaskan Officials Seek Investors in Japan as Trump Touts LNG.” March 17, 2025. – Link
• “Harold Hamm Sounds the Alarm: Low Oil Prices Could Shut Down US Shale.” March 17, 2025. – Link
• “What’s Affecting Oil Prices This Week (March 17, 2025).” March 17, 2025. – Link