At the beginning of May 2025, a clear change of direction by OPEC+ caused a stir: Eight member states, including Saudi Arabia, announced a significant increase in production of over 400,000 barrels per day in June. The result? A sharp fall in oil prices - $IOIL00 (+2,08%) Crude oil fell below $59, WTI even to $55.30. The price of gas oil also came under pressure.

Saudi Arabia in particular seems to be losing patience with countries such as Kazakhstan and Iraq, which are not adhering to agreed production cuts.

It remains to be seen whether the threat of significantly increased production in the coming months will persuade countries to comply with the agreements. Internal tensions within OPEC+ could lead to further market distortions - i.e. more and cheaper oil.

How the power games within OPEC+ affect supply, prices and investment opportunities can be hier genauer can be read here.

#OPEC
#Öl
#Brent

This article is part of an advertising partnership with Société Générale

While European stocks and commodities are performing strongly, US equities and volatile assets such as Bitcoin are struggling with significant losses. A brief summary of the chart from Boll's Global Research

Winners

• Equity marketsGreece (+27.5%) and Spain (+25.5%) have posted the highest returns in Europe.
• Commodities: $NGAS (+4,03%) (+16.9%) and $965310 (+1,29%) (+16.2%) show the strongest performance.
• Foreign exchangeThe Swedish krona (+9.6%) and the Brazilian real (+9.4%) gained strongly against the US dollar.
• Sectors: Tech (+11.4%) and Materials (+8.0%)

Losers:

• Equity markets: US equities (-3.4%) and Taiwan (-7.3%)
• Commodities: $IOIL00 (+2,08%) (-5.2%) and $BTC (-0,48%) (-8.9%) record considerable losses.
• Foreign exchangeTurkish lira (-6.7%) and Indonesian rupiah (-2.6%) are weakening.

Current trends:

• $965515 (-0,82%) (+15.2%) and long-term US government bonds (+4.6%) remain stable.
• European stocks are outperforming, while the USA is lagging behind.

In recent years, Dubai has established itself as a safe haven for money from conflict regions. This development is driven by two factors in particular:

• Russian capital flightSince the beginning of the Ukraine war in 2022, around 200k Russian citizens have settled in Dubai. These include oligarchs, wealthy businessmen and companies seeking to escape Western sanctions. This has led to a sharp increase in demand for luxury real estate, banking services & company registration.

• Sanctions evasion and trade boomThe United Arab Emirates (UAE) has refused to enforce Western sanctions against Russia*. This has allowed Dubai to establish itself as a major hub for Russian financial transactions through dirham-ruble transactions, re-export of oil and gold trading. For example, Russian oil shipments to the UAE's Fujairah terminal increased to 141,000 barrels per day (end of 2022), while Russian gold imports to the UAE rose from 1.3 tons (2021) to 96.4 tons (2022), i.e. 74 times more. 74-fold.

*Western sanctions would include: The exclusion of Russian banks from SWIFT, freezing of 300 billion euros in Central Bank reserves, import ban on Russian coal, investment restrictions in the energy sector, export bans on high tech, import bans on steel and luxury goods, asset freezes and travel bans on "elites", oligarchs and companies close to the government, EU port and airspace closures and EU broadcasting bans on Russian state media.*

The Dubai Financial Market Index reached a ten-year high in December 2024. The main drivers of this development were real estate & banking stocks, such as Emaar Properties. This rise can be directly attributed to capital flows driven by geopolitical crises, for example.

Why peace could weaken Dubai

Dubai's dependence on Crisis Capital means that geopolitical easing brings economic risks. These can be explained by the following points:

• Should there be a peace agreement in the Ukraine war, many Russian investors could repatriate their capital or reinvest in Western markets. This would have a significant impact on Dubai's real estate and financial sector.

• If Western sanctions against Russia are eased, Dubai will lose its strategic importance as a financial and trading hub for Russian companies. Ruble-dirham settlements and trade in sanctioned goods such as semiconductors would be particularly affected.

• The value of real estate in Dubai has almost doubled since 2021. Analysts warn that a geopolitical normalization could lead to a sharp decline in demand from Russia, Ukraine and the Middle East, which would result in a real estate correction.

• While the DFMGI rose by 24.5 % in 2024, analysts expect weaker development in 2025. The reasons for this are uncertain $IOIL00 (+2,08%) prices, potential capital outflows and lower demand from crisis regions.

Dubai's role in geopolitical competition

In addition to economic implications, Dubai's position as a crisis profiteer also has diplomatic consequences.

The UAE has positioned itself as a mediator between Russia and Ukraine since 2022. Among other things, it has organized 9 prisoner exchanges and strengthened diplomatic relations. The most recent exchange took place on August 24, 2024, in which 115 prisoners were released. President Sheikh Mohamed bin Zayed Al Nahyan held talks with Vladimir Putin on bilateral relations and global developments. At the same time, he also received Ukrainian President Volodymyr Selensky. Peace would reduce this influence.

While Dubai benefits from ongoing crises, Saudi Arabia is increasingly focusing on peace initiatives and long-term investment programs. With the Vision 2030 Saudi Arabia is pursuing an ambitious reform program to reduce its dependence on oil and is planning significant investments in the mining sector and in foreign mining projects with the aim of strengthening its position in mineral supply chains. An easing of tensions would therefore further strengthen Saudi Arabia's position as a leading power in the region.

If the geopolitical situation stabilizes, European banks could expect cash in flows that are currently flowing to Dubai. According to $UBSG (+2,72%) European banks are heading for record years, with dividend payouts and share buybacks of over €120 billion over the next two years and the EY European Bank Lending Forecast forecasts significant growth in lending volumes in the Eurozone -3.1% for 2025 and 4.2% for 2026.

- Oil

- gas

- EU emissions trading

- Copper

- Aluminum

- Gold

- Silver

Link: https://shorturl.at/5VrEF

#gold
#silber
#öl
#oiel
#kupfer
#aluminium
#metall
#edelmetalle
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The oil market is facing one of the most complex challenges since the pandemic, due to a combination of geopolitical tensions, long-term production strategies and volatile demand, particularly from China and Europe. OPEC+ decisions and uncertainties in the US are currently shaping market conditions and putting pressure on both producers and consumers.

OPEC+: strategy of production delays

OPEC+, an association of 23 oil countries, has continuously extended its voluntary production cuts since 2022. These measures were aimed at stabilizing oil prices post-pandemic slumps. In June 2024, the original plan was to gradually increase production by 2.2 million barrels per day. In the most recent decisions, the following was decided:

• The production increase has been postponed again and is now scheduled to begin in April 2025 at the earliest.
• OPEC+ originally planned to extend its current production cuts until September 2025 completely. This deadline has now been extended by one year, meaning that the cuts will not be reversed until September 2026 be completed.
• This is the third delay in 6 months.

Reasons for the delay

Weak demand:

• China is experiencing slower economic growth, which is dampening demand for oil. In the third quarter of 2024, the Chinese economy grew by 4.6%, the weakest growth in a year and a half. Economic growth of around 4.8% is expected for 2024, with a further slowdown to 4.5% in 20251. The World Bank forecasts real GDP growth of 4.5% for 2024 and 4.3% for 2025. The main reasons for the slowdown in growth are weak domestic demand and consumer restraint, the real estate crisis and uncertainty on the labor market.

• European demand also remains subdued due to the energy transition, economic uncertainties and geopolitics.

Alternative offers:

• Countries such as the USA, Brazil and Canadawhich are not part of OPEC+, are taking the opportunity to increase their own oil production in order to benefit from the higher prices resulting from the OPEC+ production cuts.
• These countries can supply the market with additional oil, which could enable them to gain market share.

Risk of excess supply:

• If these countries continue to increase their production volumes while global demand for oil may stagnate or grow more slowly, this could lead to an oversupply.

- Such an oversupply would lower the oil price again, which would undermine OPEC+'s strategic cuts.

Internal tensions in OPEC+:

• States such as the United Arab Emirates are pushing for higher production volumes, while Saudi Arabia continues to pursue a restrictive policy in order to ensure price stability.
• The UAE produced around 700,000 barrels more than agreed with OPEC+ from January to October 2024. The agreed output for the UAE was 2.91 million barrels per day, but this is excused by a waiver to increase its output by 200,000 barrels per day to 3.2 million barrels per day in 2024.

• Saudi Arabia has extended its voluntary production cuts until the end of June 2024. They reduced production by 1 million barrels per day in addition to an earlier cut of 500,000 barrels per day. Saudi production will be around 9 million barrels per day by the end of June 2024.

Reasons for the tensions:

• The UAE has invested heavily in capacity reserves and is pushing to use them. However, Saudi Arabia is aiming to support oil prices by cutting production.

Price trends and market forecasts

The Brent price is currently at $IOIL00 (+2,08%) which represents a decline of around 18% compared to the peak in July 2024. The price of US WTI oil $CRUD (+2,63%) are in a similar range.

Forecasts

• $C (+2,34%) has revised its forecast upwards and sees an optimistic scenario of 60-65 USD per barrel for the end of 2024 and the beginning of 2025.
• $JPM (+1,68%) forecasts an average Brent oil price of 84 USD per barrel for 2024. For 2025, JPMorgan expects an average price of USD 75 per barrel
• $GS (+1,94%) has revised its forecast for 2024 to an average of USD 81 per barrel for Brent oil.

Long-term prospects

The US Energy Information Administration (EIA) forecasts an average Brent price of USD 61 per barrel for 2025 and 73 USD per barrel for 2030.

Effects on the producing countries

Saudi Arabia:

• Saudi Arabia needs high oil prices to balance its budget. According to forecasts, the threshold is currently around 96 USD per barrelwell above current market prices. This dependency is particularly evident in megaprojects such as Neom City and the Vision 2030which are dependent on stable income. In addition, the organization of events such as the Soccer World Cup 2034 and the Expo 2030 massive budgetary resources.
• Despite these conditions, there are signs of a possible change in strategy. Saudi Arabia could abandon its previous target of an oil price of 100 USD per barrel in order to regain market share. However, this could mean lower oil prices, which would make it more difficult to finance projects and put additional pressure on budget stability.

Russia:

• Oil plays a central role in financing the war in Ukraine. In 2024, almost a third of the Russian state budget is to be used for military spending, which amounts to around 111 billion euros equivalent. The Kremlin is financing this high expenditure through budget reallocations and is relying heavily on oil revenues to fund the war.
• Western sanctions have affected Russian oil exports, but Russia has found ways to partially circumvent them, as I explained in another report (link in the comments). A shadow fleet of oil tankers makes it possible to continue exporting oil despite sanctions. However, revenues are no longer as high as before the sanctions, and lower oil prices could further limit Russia's financial options for the war.
• Despite the sanctions, the Russian economy has adapted faster than expected. Through more intensive trade with countries such as China and other non-Western countries, the circumvention of the G7 oil price cap and increased government spending on the military industry, Russia has been able to take countermeasures. Nevertheless, it remains vulnerable to price fluctuations on the global oil market and faces an acute labor shortage.
• The extension or tightening of Western sanctions could significantly further impact Russia's oil exports and thus revenues, which would pose new challenges to the country's economic stability.

Iran:

• Iran has significantly increased its oil exports since 2021, with an average export of 1.56 million barrels per day in the first 3 months of 2024 (the highest in 6 years). This increase of 1.2 million barrels per day since 2021 is plausible given the low level of exports at the time.
• With the election victory of Donald Trump in the 2024 US presidential elections, however, Iran is facing a possible new round of sanctions. Trump is planning a return to the "maximum pressure" strategy that drastically reduced Iran's exports from 2.5 million to just 350,000 barrels per day within 2 years during his previous term.
• The reintroduction of such sanctions could have a significant impact on the global oil market. Especially China's China's role is crucial here, as it absorbed more than 85% of Iran's oil exports this year. At the same time, Iran has improved its mechanisms for circumventing sanctions, which could reduce the effectiveness of new measures. Overall, renewed sanctions could destabilize the oil market, but the exact extent remains difficult to predict as Iran has significantly increased its ability to maintain trade routes.

Long-term challenges and opportunities

Energy transition and decarbonization

• Europe: Promotes investment in renewable energy and reduces oil consumption.
• China: Is investing massively in electromobility, which will reduce oil demand in the long term

Technological innovations

• Countries such as the USA are focusing on technologies to increase oil extraction from shale oil deposits.
• This could reduce production costs and increase competitiveness.

Role of OPEC+ in the future

• Long-term coordination within OPEC+ is becoming more difficult as national interests increasingly diverge.
• A possible split in the alliance cannot be ruled out if countries such as the UAE and Russia assert their own interests more strongly.

The Iran attacks again Israel with missiles again because Israel is smoking out their network of Hezbollahs in Lebanon and Iran wants to save face so as not to look weak. Everyone wants to have the last word down there. Financial markets and cryptos are falling as a result. Precious metals, oil and defense stocks are rising.

The same thing happened back in April when Israel sent a VIP into the sky. Many YouTubers immediately called for a third world war. They were wrong, of course, because the world has rarely ended before. After a few days it was all over and the iran. Most of the missiles and drones were intercepted and neutralized.

The S&P 500 fell by just 4,46% from 11 to 19 April. That was only six trading days and the panic was in vain again. Buying / buying later was the right decision at the time. Opinions? #gold
#iran
#israel
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JP Morgan ($JPM (+1,68%)) has estimated that the equilibrium price for WTI crude oil ($OD7F) is around US dollar
per barrel per barrel. This means that a price of 60
US dollar
per barrel is considered too low to incentivize sufficient production, possibly leading to an increase to 100 US dollars per barrel next year.

They also forecast that the price of Brent crude oil ($IOIL00 (+2,08%)), the international benchmark, later in 2024 the mark of 100 US dollars per barrel could be tested. This is due to the decision of Russiato cut production in the second quarter by an additional 471k per day in the second quarter. JP Morgan estimates that Brent prices will rise by May the mid 90s US dollar and by September close to 100 US dollars could be reached if no political, supply or demand-side reactions.

The prices for US WTI crude oil ($IOIL00 (+2,08%)) have fallen to 81.76 US dollars per barrel per barrel. The main reason for this price increase was an unexpectedly large reduction in crude oil stocks in the USA. Specifically, the amount of crude oil in storage fell by 1,923
million barrels and the gasoline stocks by 2.954 million barrels. These declines obviously signal a stronger demand for oilwhich is driving prices up.

In addition, the Hurricane Berylcurrently passing through the Caribbean has led to further price increases contributed to further price increases. A hurricane can disrupt oil production and refineries along the US Gulf Coast which could reduce the available supply of oil. These potential production outages will lead to a further shortage supply and drive prices up further.

The USA support Angolaone of Africa's largest oil producers, in building up an industry to process critical minerals. This is intended to reduce dependence on oil ($IOIL00 (+2,08%) ).

The cooperation is to be supported by the US-led Minerals Security Partnership which supports projects along the entire supply chain for clean energy supply chain. Angola plans to use this cooperation to grow economically. In addition, the USA clean energy projects in Angola. Angola Angola, including the construction of two solar solar power plants with a loan of over 900 million US dollars.