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The index aims to track the performance of 3 separate contract schedules for WTI Crude Oil futures. One-third of the index follows a monthly roll schedule two months beyond the nearby contract. The second third of the index follows a June annual roll schedule, while the remaining third follows a December annual roll schedule. The index is not linked to the spot price of WTI crude oil.

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The Trump administration is exploring a strategy to halt and examine Iranian oil tankers at sea as part of an international agreement aimed at curbing the spread of <a href="https://www.benzinga.com/25/02/43480859/trump-confirms-maximum-economic-pressure-on-iran-calls-chinas-tariff-retaliation-fine">weapons of mass destruction</a>.
What Happened: According to Reuters, Trump officials are considering enabling allied nations to stop and inspect vessels passing through critical maritime routes such as Asia's Malacca Strait.
Such actions could delay crude deliveries to refiners and potentially damage the reputations of those involved in facilitating these trades.
The administration is evaluating whether these sea inspections could be conducted under the Proliferation Security Initiative (PSI), a U.S.-led program launched in 2003 with the participation of over 100 countries to prevent the movement of weapons of mass destruction. 
See Also: <a href="https://www.benzinga.com/markets/equities/25/03/44157043/jim-cramer-doubles-down-on-crowdstrike-despite-drop-analysts-who-were-so-negativehad-it-wrong">Jim Cramer Doubles Down On CrowdStrike Despite Drop: &#8216;Analysts Who Were So Negative…Had It Wrong&#8217;</a>
Why It Matters: Opponents of Tehran's oil revenue say it supports nuclear proliferation as well as terrorism.
However, past attempts to seize Iranian oil have sparked retaliation from Tehran. In 2023, Iran seized foreign ships—one chartered by Chevron (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/CVX#NYSE">CVX</a>)—after the U.S. attempted to intercept Iranian oil cargoes.
&#8220;You don't have to sink ships or arrest people to have that chilling effect that this is just not worth the risk,&#8221; said one source, emphasizing that delivery delays could sow uncertainty in illicit trade networks. 
Analysts warn that the longer sanctions remain in place, the more Iran and its oil buyers will find ways to circumvent them.
With Iran's oil revenues largely tied to exports to China, any prolonged disruption could have significant economic impacts. 
<h2 class="wp-block-heading">ETFs To Watch</h2>
During pre-market hours on Thursday, <a href="https://pro.benzinga.com">Benzinga Pro</a> showed: 
<ul>
<li>ProShares Ultra Bloomberg Crude Oil (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UCO#NYSE">UCO</a>) fell by 0.17%,</li>
<li>United States Oil Fund LP (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/USO#NYSE">USO</a>) dropped 2.58%,</li>
<li>SPDR S&amp;P Oil &amp; Gas Exploration &amp; Production ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XOP#NYSE">XOP</a>) decreased by 0.39%, and</li>
<li>MicroSectorsTM Oil &amp; Gas Exploration &amp; Production 3X Leveraged ETNs (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/OILU#NYSE">OILU</a>) saw a 0.28% drop,</li>
</ul>
Now Read:
<ul>
<li><a href="https://www.benzinga.com/markets/forex/25/03/44161314/us-stocks-likely-to-open-lower-after-wednesdays-blip-be-patient-but-be-ready-to-act-says-analyst-as-market-uncertainties-can-create-opportunities">US Stocks Likely To Open Lower After Wednesday&#8217;s Blip: &#8216;Be Patient, But Be Ready To Act,&#8217; Says Analyst As Market Uncertainties Can Create &#8216;Opportunities&#8217;</a></li>
</ul>
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Government

News

Politics

Global

OILU

Trump Administration Weighs Sea Inspections Of Iranian Oil Tankers

President Donald Trump, while hosting a White House meeting with Jordan&#8217;s King Abdullah at the White House Tuesday, reiterated his threat that the U.S. will take control of the Gaza Strip and move the nearly two million Palestinians living there to either Jordan <a href="https://www.benzinga.com/topic/gaza">or Egypt or somewhere</a>.
Asked whether the U.S. would cut billions in financial aid to the two countries if they refused to accept the transfer of Palestinians, Trump sounded confident that Jordan and Egypt would carry out his wishes.
"I don't have to threaten that. I do believe we're above that," Trump said, contradicting his previous suggestion that holding back aid was a possibility.
<h2 class="wp-block-heading">How Will The US Attain Gaza?</h2>
Trump said the US could come to control Gaza without committing any money. 
&#8220;We are not going to buy Gaza&#8230;we are going to take it and cherish it,&#8221; Trump said. &#8221; It will bring peace to the Middle East. It is going to be a tremendous thing and put a lot of people to work.&#8221; 
Speaking in broad strokes, Trump insisted that there has been overwhelming support for his plan to turn Gaza into a resort, though in fact most world leaders <a href="https://www.benzinga.com/news/25/02/43503385/trumps-gaza-plan-for-seaside-resort-faces-global-pushback">criticized his plan</a> when it was first announced.
Trump suggested that the redeveloped area could have new hotels, office buildings and houses and "and we'll make it exciting." 
Trump then waxed on about what a successful real estate magnate he is. "I can tell you about real estate. They're going to be in love with it," he said.
<h2 class="wp-block-heading">King Abdullah, What Say You? </h2>
When pressed by reporters specifically as to whether he agreed to the transfer of Palestinians from Gaza, King Adbullah said that more talks will be held soon with Egypt to discuss the issue. Egypt has also condemned Trump&#8217;s plan. 
The King said that Jordan would need to take into consideration how it could or would be able to take Palestinians into his country. The kingdom already shelters 700,000 Syrian refugees and lacks the oil wealth of its neighbors, making continued U.S. aid crucial. Jordan receives nearly $2 billion in foreign aid to Jordan, which contributes at least 42% to the country&#8217;s total economy
&#8220;This is something that we as Arabs will discuss later and talk about the options,&#8221; King Abdullah said. 
Two Palestinians from Michigan told Benzinga that they thought the King played his cards close to his chest and that deferring to upcoming talks with Egypt &#8220;was a good idea. He [Trump] already walked back the threat of cutting aid to both Egypt and Jordan.&#8221;
Analysts from various outlets agreed that King Abdullah held back in the short press briefing during which Trump did most of the talking. Though ahead of Tuesday's meeting, King Abdullah had reaffirmed his commitment to a two-state solution and the need for a "just and comprehensive peace" in the region. 
In terms of Israel&#8217;s plan to annex the mostly Palestinian West Bank, Trump said, &#8220;That&#8217;s going to work out.&#8221;
Abdullah also announced that Jordan was intending to bring to Jordan 2,000 Palestinian children from Gaza in need of cancer treatment, which Trump said was a beautiful thing.
<h3 class="wp-block-heading">ETFs To Watch</h3>
According to <a href="https://pro.benzinga.com">Benzinga Pro</a>, oil ETFs were in the green at last check Tuesday:
<ul>
<li>ProShares Ultra Bloomberg Crude Oil (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UCO#NYSE">UCO</a>) is up by 2.65%</li>
<li>United States Oil Fund LP (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/USO#NYSE">USO</a>) is up by 1.25%</li>
<li>SPDR S&amp;P Oil &amp; Gas Exploration &amp; Production ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XOP#NYSE">XOP</a>) is up by 0.9%</li>
<li>MicroSectorsTM Oil &amp; Gas Exploration &amp; Production 3X Leveraged ETNs (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/OILU#NYSE">OILU</a>) saw a 2.94% uptick</li>
</ul>
Now Read:
<ul>
<li><a href="https://www.benzinga.com/markets/25/02/43621302/justin-trudeau-slams-unacceptable-us-tariffs-after-trump-imposes-25-levy-on-metal-imports-canadians-will-stand-up-strongly-and-firmly-if-we-need-to">Justin Trudeau Slams &#8216;Unacceptable&#8217; US Tariffs After Trump Imposes 25% Levy On Metal Imports : &#8216;Canadians Will Stand Up Strongly And Firmly If We Need To&#8217;</a></li>
</ul>
Palestinian refugees in Gaza: Shutterstock

Trump Says We Will 'Take Gaza' And 'Cherish It' In White House Meeting With Jordan's King Abdullah

The <a target="_blank" href="https://www.benzinga.com/topic/energy-sector" rel="noreferrer noopener">U.S. energy sector</a> posted a strong 2025 opening, outperforming other sectors as crude prices soared and the Market anticipated a deregulatory shift under Donald Trump&#8217;s&nbsp;government.
<a target="_blank" href="https://www.benzinga.com/topic/oil" rel="noreferrer noopener">Major oil companies</a> Exxon Mobil Corp (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XOM#NYSE">XOM</a>),&nbsp;Chevron Corp (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/CVX#NYSE">CVX</a>), and&nbsp;Shell Plc (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SHEL#NYSE">SHEL</a>), once the asset-light hypergrowth Big Tech antithesis are now targeting Big Tech to drive value.
Chevron, GE Vernova (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GEV#NYSE">GEV</a>) and Engine No. 1 launched a joint venture to power <a href="https://www.benzinga.com/25/01/43308041/chevron-ge-vernova-engine-no-1-bet-big-on-ai-power-but-is-it-too-late" target="_blank" rel="noreferrer noopener">artificial intelligence data centers</a> by 2027. Exxon will focus on providing low-carbon power through its carbon capture business.
Also Read: <a target="_blank" href="https://www.benzinga.com/media/25/01/43352019/amazon-cuts-more-jobs-in-cost-saving-push-report" rel="noreferrer noopener">Amazon Cuts More Jobs in Cost-Saving Push: Report</a>
Shell wants to use its solar energy and battery storage arm and its natural gas plant in Rhode Island.
The Big Oil trio&#8217;s&nbsp;fourth-quarter earnings grappled with fossil fuel supply outstripping demand, which took a toll on their margins, prompting them to depend on Big Tech energy supply as the latter splurge on their aggressive artificial intelligence data center ambitions, Bloomberg <a target="_blank" href="https://www.bloomberg.com/news/articles/2025-02-01/exxon-xom-chevron-cvx-brave-deepseek-risk-to-chase-ai-as-oil-glow-fades?sref=TBDibEcD" rel="noreferrer noopener">reports</a>.
However, China&#8217;s DeepSeek&#8217;s <a target="_blank" href="https://www.benzinga.com/25/01/43390988/deepseek-and-nvidia-under-us-investigation-ai-market-shakeup-wipes-out-1-trillion-in-tech-value" rel="noreferrer noopener">cheaper and low-power</a> AI model&#8217;s emergence rivaling Microsoft Corp (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/MSFT#NASDAQ">MSFT</a>) backed OpenAI, and&nbsp;other Big Tech giants posed a letdown for the oil companies by potentially cutting the need for data centers. The oil companies are betting on the growing demand for natural gas-generated electricity.
Big Oil resorted to buybacks and dividends to lure investors as the prospect of peak oil demand looms. However, the shareholder return strategy reached its limit.
Exxon paid out its entire <a target="_blank" href="https://www.benzinga.com/news/earnings/25/01/43389620/exxon-mobil-q4-earnings-mixed-results-but-ceo-promises-profitable-growth-well-into-the-future" rel="noreferrer noopener">free cash flow</a> of $36.0 billion in 2024 dividends and buybacks, yet still trades at a 46% discount to the S&amp;P 500 Index average.
It plans to expand its annual $20 billion share repurchase program through 2026.&nbsp;Chevron returned&nbsp;<a target="_blank" href="https://www.benzinga.com/25/01/43382627/chevron-falls-as-q4-profits-decline-amid-lower-oil-output-dividend-hike-offers-silver-lining" rel="noreferrer noopener">$27.0&nbsp;billion&nbsp;of</a> cash to shareholders in the year.
The U.S. is now the world&#8217;s biggest oil producer. Yet energy stocks make up just 3.2% of the S&amp;P 500. Part of Big Oil&#8217;s discounted valuation is due to its high capital spending that failed to yield returns.
Due to the energy transition, the Street remains jittery over the sustainability of dividends and buybacks. The volatility of commodity-price swings also dampened the valuation of fossil fuels compared to cash-rich Big Tech.
Goldman Sachs&#8217;&nbsp;Daan Struyven expects Donald Trump&#8217;s <a target="_blank" href="https://www.benzinga.com/general/market-summary/24/11/42212364/trumps-tariff-threat-to-canada-may-disrupt-oil-markets-inflate-prices-would-likely-raise-the-price-of-fuels-says-analyst" rel="noreferrer noopener">25% tariffs on</a> Canada to raise the price of fuels in the U.S. and drive inflation. Higher transport costs could also affect the profits of oil marketing companies.
Struyven recently said he expects <a target="_blank" href="https://www.benzinga.com/economics/macro-economic-events/25/01/43036184/us-energy-sector-enjoys-strong-start-to-2025-analysts-eye-constructive-setup-for-chevron" rel="noreferrer noopener">oil prices to</a> reach $90 per barrel if the U.S. further tightens Russia, Iran, and Venezuela&#8217;s oil supply.
Investors can gain exposure to crude oil through the United States Oil Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/USO#NYSE">USO</a>) and ProShares Ultra Bloomberg Crude Oil (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UCO#NYSE">UCO</a>).
Price Actions: At last check on Monday, XOM stock was down 0.37% to $106.43. CVX is up 0.10%, and SHEL is down 1.06%.
Also Read:
<ul>
<li><a href="https://www.benzinga.com/25/01/43351386/metas-ai-investments-llama-expansion-and-ad-tech-drive-growth-earn-analyst-conviction" target="_blank" rel="noreferrer noopener">Meta&#8217;s AI Investments, Llama Expansion, Ad Tech Growth Earn Analyst Conviction</a></li>
</ul>
Image via Shutterstock

Commodities

Media

MSFT

SHEL

Chevron, Exxon And Shell Shift Focus To Powering AI Growth

The International Energy Agency has revised its <a target="_blank" href="https://www.benzinga.com/topic/oil" rel="noreferrer noopener">global oil demand</a> outlook slightly for 2025, projecting growth of 1.05 million barrels per day, down from <a target="_blank" href="https://www.iea.org/reports/oil-market-report-december-2024" rel="noreferrer noopener">the previously estimated</a> 1.1 million barrels daily.
The new forecast anticipates global demand will average 104 million barrels daily, reflecting a combination of improving economic conditions and <a target="_blank" href="https://www.iea.org/reports/oil-market-report-january-2025" rel="noreferrer noopener">lower fuel prices</a>.
In the fourth quarter of 2024, oil demand rebounded strongly, increasing by 1.5 million barrels daily—the highest growth since late 2023.
Also Read: <a target="_blank" href="https://www.benzinga.com/25/01/42980720/microsoft-taps-meta-veteran-to-lead-new-coreai-division-plans-shift-from-openai-dependence" rel="noreferrer noopener">Microsoft Launches CoreAI Division: Ex-Meta Exec To Supercharge Copilot And AI Innovations</a>
The IEA attributed this surge to reduced fuel prices, colder weather in northern regions, and heightened petrochemical activity in the U.S. However, while 2025 demand growth will likely surpass 2024, it will fall short of the over 2 million barrels per day increase seen in 2023.
OPEC projects a higher demand growth of <a target="_blank" href="https://momr.opec.org/pdf-download/" rel="noreferrer noopener">1.45 million barrels daily</a>.
<a target="_blank" href="https://www.benzinga.com/markets/commodities/24/11/41899890/opec-cuts-2024-oil-demand-forecast-for-fourth-straight-month-amid-chinas-economic-slowdown" rel="noreferrer noopener">Disappointing data from</a> major Asian markets, including China, India, and African countries, prompted OPEC to revise its oil demand growth forecasts for 2024 several times.
Still, OPEC&#8217;s estimates looked more optimistic than those of Wall Street banks and Saudi Aramco.
China saw a significant uptick in oil demand in November, driven by rising gasoil consumption and falling diesel prices, which hit their lowest in nearly three years.
The IEA highlighted that signs of stabilization in China&#8217;s property market could support further recovery in oil demand. Projections suggest China will add 220,000 barrels per day to its oil consumption in 2025, compared to a 180,000-barrel daily increase in 2024, the Wall Street Journal <a target="_blank" href="https://www.wsj.com/business/energy-oil/iea-trims-oil-demand-outlook-but-still-expects-stronger-growth-this-year-a972c71b?mod=business_lead_pos4" rel="noreferrer noopener">reports</a>.
Recent U.S. sanctions targeting Russia&#8217;s energy sector and shipping networks and measures aimed at Iran&#8217;s shadow fleet could disrupt global oil supplies. These actions may compel major buyers like China and India to seek alternative sources.
Meanwhile, Brent crude prices hover around $80 per barrel, and U.S. West Texas Intermediate trades near $77 per barrel, reflecting market concerns over tightened supply, the WSJ reports.
Despite geopolitical pressures, global oil supply rose modestly in December 2024, supported by increased production in Nigeria and Libya. For 2025, the IEA forecasts supply growth of 1.8 million barrels daily, led by non-OPEC+ countries such as the U.S., Brazil, and Canada. However, the agency cautioned that sanctions or weather-related disruptions could rapidly draw down existing oil stocks.
Notable oil stocks include Exxon Mobil Corp (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XOM#NYSE">XOM</a>), Chevron Corp (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/CVX#NYSE">CVX</a>), Shell Plc (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SHEL#NYSE">SHEL</a>), TotalEnergies SE (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/TTE#NYSE">TTE</a>), Petroleo Brasileiro (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PBR#NYSE">PBR</a>) and BP Plc (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BP#NYSE">BP</a>).
Investors can gain exposure to the crude oil market through the United States Oil Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/USO#NYSE">USO</a>) and ProShares Ultra Bloomberg Crude Oil (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UCO#NYSE">UCO</a>).
Also Read:
<ul>
<li><a href="https://www.benzinga.com/government/regulations/25/01/42974632/us-listed-chinese-stocks-rally-on-strong-trade-data-central-bank-support-goldman-forecasts-20-growth" target="_blank" rel="noreferrer noopener">US Listed Chinese Stocks Rally on Strong Trade Data, Central Bank Support, Goldman Forecasts 20% Growth</a></li>
</ul>
Photo by William Potter on Shutterstock

Guidance

Trading Ideas

OPEC's Optimism Clashes With IEA's Conservative 2025 Oil Growth Projections

At least one aspect of Israel&#8217;s multifront war is expected to come to an end if the militant group Hamas comes to ceasefire terms <a href="https://www.benzinga.com/news/global">with Israel</a>.
What Happened: So far, Hamas has yielded at least two of Israel's demands for a cease-fire agreement in Gaza, according to a Thursday <a href="https://www.wsj.com/world/middle-east/israel-gaza-palestine-ceasefire-hostage-negotiations-d599e1d1">Wall Street Journal</a> report. 
The development comes after previous negotiations collapsed. And, just three months ago, certain <a href="https://www.benzinga.com/news/24/09/40955425/top-us-officials-skeptical-of-israel-hamas-cease-fire-and-hostage-deal-before-bidens-term-ends-repor">senior U.S. officials were skeptical</a> that a hostage-release deal would occur before the end of President Joe Biden‘s term.
The scenario has changed drastically. 
U.S. National Security Adviser Jake Sullivan spoke to the press in Tel Aviv Thursday after meeting with Prime Minister Benjamin Netanyahu in Israel.
&#8220;Hamas started this war,&#8221; Sullivan said, optimistic that a ceasefire and hostage release &#8220;can happen.&#8221;
See below.
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<iframe loading="lazy" title="LIVE: U.S. National Security Advisor Jake Sullivan holds a press availability in Tel Aviv." width="500" height="375" src="https://www.youtube.com/embed/QY5Afz4Kt94?start=2036&#038;feature=oembed" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" referrerpolicy="strict-origin-when-cross-origin" allowfullscreen></iframe>
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</figure>
Sullivan said he is set to visit Doha, Qatar and Cairo to close a deal &#8220;this month.&#8221; 
Hamas is reportedly willing to allow Israeli forces to stay in Gaza temporarily when the fighting stops, the WSJ reported. A list of hostages, including U.S. citizens, is expected to be released as part of a ceasefire pact.
Whether the ceasefire would last or be fully enforced remains to be seen.
Israel and Hezbollah were expected to <a href="https://www.benzinga.com/news/global/24/11/42199447/netanyahu-backs-cease-fire-deal-with-hezbollah-israeli-hardliner-calls-for-security-zone-inside-lebanon">pause fighting in Lebanon</a> last month, but <a href="https://www.benzinga.com/news/global/24/12/42279102/israel-hezbollah-trade-strikes-in-latest-sign-of-crumbling-ceasefire">attacks continued into December</a>. At least five people were killed in Israeli attacks on southern Lebanon in the last 24 hours, per <a href="https://www.aljazeera.com/news/2024/12/11/israeli-strikes-kill-five-in-southern-lebanon-amid-shaky-ceasefire">Al Jazeera</a>, citing the country's Health Ministry.
Hezbollah began firing rockets toward Israel after Hamas attacked <a href="https://www.benzinga.com/news/23/10/35136071/israel-under-siege-unprecedented-hamas-attack-sparks-intense-clashes-netanyahu-says-we-are-at-war">Israel on Oct. 7, 2023</a>.
Why It Matters: The ceasefire agreement would come as the balance of power in the Middle East changes.
This week, Israel seized the buffer zone as Bashar al-Assad&#8216;s rule in Syria collapsed. Al-Assad and his family were subsequently <a href="https://www.benzinga.com/24/12/42381587/bashar-al-assad-and-his-family-granted-asylum-by-russia-kremlin-source-says-always-spoken-in-favor-of-political-settlement">granted asylum by Russia</a>.
Assad&#8217;s regime was considered a lifeline to Hezbollah.
Traders can gain exposure to oil stocks that are affected by Middle East geopolitcal news via ETFs, or exchange-traded funds. According to <a href="https://pro.benzinga.com">Benzinga Pro</a>:
<ul>
<li>ProShares Ultra Bloomberg Crude Oil (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UCO#NYSE">UCO</a>) is up 0.27% Thursday. </li>
<li>United States Oil Fund LP (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/USO#NYSE">USO</a>) dropped 0.16%.</li>
<li>SPDR S&amp;P Oil &amp; Gas Exploration &amp; Production ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XOP#NYSE">XOP</a>) decreased by 0.79%.</li>
<li>MicroSectorsTM Oil &amp; Gas Exploration &amp; Production 3X Leveraged ETNs (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/OILU#NYSE">OILU</a>) saw a 2.39% drop.</li>
</ul>
Israeli stocks, as monitored through the VanEck Israel ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/ISRA#NYSE">ISRA</a>), are up 25.34% year-to-date.
Now Read:
<ul>
<li><a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/12/42468190/defense-stocks-face-headwinds-as-trumps-doge-targets-spending-cuts-goldman-sachs-downgrades-general-dynamics-to-sell">Defense Stocks Face Headwinds As Trump&#8217;s DOGE Targets Spending Cuts: Goldman Sachs Downgrades General Dynamics</a></li>
</ul>
Image: Shutterstock

Markets

ISRA

Hamas Relents On Israeli Troops In Gaza, Paves Way For Potential Hostage Release

Oil markets in 2025 could face turbulence if President-elect Donald Trump reintroduces strict <a href="https://www.benzinga.com/topic/iran">policies toward Iran.</a>
According to JPMorgan analyst Arun Jayaram, while non-OPEC supply growth is expected to stabilize prices, the geopolitical wildcard of renewed sanctions on Iran could send shockwaves through the market.
Investors in the United States Oil Fund LP (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/USO#NYSE">USO</a>), the ProShares Ultra Bloomberg Crude Oil (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UCO#NYSE">UCO</a>) and the Invesco DB Oil Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DBO#NYSE">DBO</a>) may want to closely monitor their holdings.
<h2 class="wp-block-heading">Trump's Maximum Pressure: A Familiar Script?</h2>
During Trump's first presidency, his "maximum pressure" campaign drastically curtailed Iranian oil exports, cutting them to just 400,000 barrels per day. In contrast, under the Joe Biden administration, Iran's oil exports rebounded dramatically, surging to 1.6 million barrels per day by 2024. 
Jayaram suggests that Trump's potential return to sanctions could disrupt up to 1 million barrels per day of Iranian crude—an outcome that could unsettle the fragile equilibrium.
Read Also: <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/12/42340255/opec-extends-oil-output-cuts-to-late-2026-what-it-means-for-markets">OPEC+ Extends Oil Output Cuts To Late 2026: What It Means For Markets</a>
<h2 class="wp-block-heading">Can OPEC+ Play Along?</h2>
Jayaram's analysis highlights a significant challenge for Trump's sanctions strategy this time: OPEC+. Previously, the oil cartel adjusted production to mitigate the impact of lost Iranian barrels. 
However, with shifting alliances and evolving market dynamics, securing similar cooperation may prove far more difficult for Trump 2.0. Without OPEC+ backing, the effectiveness of sanctions in stabilizing prices could be severely limited.
<h2 class="wp-block-heading">What's Next For Oil Markets?</h2>
With non-OPEC supply projected to grow, the baseline for oil prices appears steady. Yet, the prospect of geopolitical brinkmanship introduces uncertainty. 
Jayaram emphasizes that the outcome hinges on Trump's ability to navigate international diplomacy and OPEC+ politics, both of which could determine whether oil markets face disruption or find balance.
The stage is set for a complex and unpredictable 2025, where Trump's Iran policies and shifting market dynamics could redefine the balance of power in oil markets. Investors should remain attentive to how these forces unfold.&#8221;
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Photo: Shutterstock

Analyst Color

Long Ideas

Regulations

Analyst Ratings

How Trump's Iran Policies Could Shape Oil Markets In 2025

Editor&#8217;s note: This story was updated to add missing detail in the introduction and further updated to reflect approval of a cease-fire deal by Israel&#8217;s cabinet and U.S. President Joe Biden&#8217;s Tuesday afternoon announcement. Stock price action in the story has been updated and exchange and ticker info for the ISRA ETF has been corrected as well. 
The governments of Israel and Lebanon have accepted a cease-fire deal, President Joe Biden said Tuesday. 
&#8220;Today I have some good news to report from the Middle East,&#8221; Biden said, adding that he spoke with the prime ministers of Israel and Lebanon. 
&#8220;I am pleased to announce that their governments have accepted the U.S. proposal to end the devastating conflict between Israel and Hezbollah,&#8221; said Biden, who made the remarks in the White House Rose Garden. 
The cease-fire is set to take effect at 4 a.m. Wednesday, Biden said.
Hezbollah has not immediately commented on the deal announcement, the New York Times reported. Lebanon&#8217;s government does not control the Hezbollah militant group. 
The deal calls for a 60-day truce, The New York Times reported, and would be overseen by the U.S., United Nations and others. Israel would withdraw forces from Lebanon and Hezbollah would move fighters to north of the Litani River.
Strikes between Israel and Hezbollah have continued during the cease-fire negotiations.
What Happened: The short-term proposal is to pause hostilities for 60 days but with the intention of a lasting truce, according to <a href="https://www.cnn.com/world/live-news/israel-hezbollah-ceasefire-deal-gaza-war-11-26-24-intl-hnk/index.html">CNN</a>, which cited an Israeli official. 
Israeli Prime Minister Benjamin Netanyahu offered three reasons for the cease fire, one being to shift focus to Iran, replenish Israeli troops and put greater pressure on Hamas to release the hostages that were captured <a href="https://www.benzinga.com/news/23/10/35136071/israel-under-siege-unprecedented-hamas-attack-sparks-intense-clashes-netanyahu-says-we-are-at-war">on Oct. 7, 2023</a>.
See Also: <a href="https://www.benzinga.com/24/11/42198266/crude-oil-moves-lower-dicks-sporting-goods-earnings-top-views">Crude Oil Moves Lower; Dick&#8217;s Sporting Goods Earnings Top Views</a>
Why It Matters: Not everyone is so confident the cease-fire will work.
Per the <a href="https://www.nytimes.com/live/2024/11/26/world/israel-hezbollah-lebanon-cease-fire">New York Times</a>, Israel&#8217;s national security minister Itamar Ben-Gvir stressed the need for a "security zone" inside Lebanon to defend against Hezbollah. Otherwise, the two countries risk another war in the future, he said. 
Ben-Gvir did not indicate that a cease-fire decision would cause him to leave Netanyahu's coalition.
<h3 class="wp-block-heading">Market Reactions</h3>
Oil prices were trading down Tuesday, with the United States Oil Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/USO#NYSE">USO</a>) 0.65% lower at last check. 
Israeli stocks, as monitored through the VanEck Israel ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/ISRA#NYSE">ISRA</a>) are up 23.5% year-to-date.
Other oil ETFs were in the red at last check Tuesday afternoon.
ProShares Ultra Bloomberg Crude Oil (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UCO#NYSE">UCO</a>) fell by 0.93%, SPDR S&amp;P Oil &amp; Gas Exploration &amp; Production ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XOP#NYSE">XOP</a>) was down 0.75% ahead of the closing bell and MicroSectorsTM Oil &amp; Gas Exploration &amp; Production 3X Leveraged ETNs (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/OILU#NYSE">OILU</a>) saw a 0.45% drop, according to <a href="https://pro.benzinga.com">Benzinga Pro</a>.
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Sector ETFs

ETFs

Ceasefire Deal Between Israel, Hezbollah Takes Effect Wednesday: Biden

Amid&nbsp;Donald Trump&#8216;s recent pledge to boost U.S. oil production significantly, questions arise about the necessity and impact of such a move.&nbsp;Vikas Dwivedi, a global energy strategist at&nbsp;Macquarie Group, has expressed skepticism regarding the need for an additional 3 million barrels per day.
What Happened: Dwivedi discussed the potential impact of Trump&#8217;s second term on the U.S. oil supply. Talking to&nbsp;<a href="https://www.cnbc.com/video/2024/11/25/us-oil-supply-increases-will-be-marginal-with-trump-2point0-macquarie.html">CNBC</a> &#8220;Squawk Box&#8221;&nbsp;on Monday, he said that anticipates only marginal increases in supply, despite Trump&#8217;s <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/11/42130859/as-trump-backs-drill-baby-drill-his-doge-co-lead-elon-musk-believes-all-energy-generation-will-be-solar-heres-what-ubs-recommends-after-election-dip">&#8220;Drill Baby Drill&#8221; stance.</a>
&#8220;We actually think there will be marginal supply increases from the U.S. The risks to supply will eventually be marginal but in the beginning of the administration, we think, the moves that they will make will increase supply risks,&#8221; Dwivedi said, adding the risks arising particularly through attempts to limit Iranian oil exports. He noted that the Ships Act aims to eliminate entities facilitating Iranian crude sales, but this could inadvertently reduce global oil supply.
Addressing Trump&#8217;s ambitious energy policy, Dwivedi questioned the necessity of increasing U.S. oil production.
&#8220;The real challenge is: does the world need that much oil? And if the U.S. did grow 3 million barrels a day during the Trump Administration, that&#8217;s like 750,000 a day over four years,&#8221; he explained
&#8220;I think the right question to ask energy executives is are you okay with $40 oil because I think that&#8217;s what you would end up with and are you okay with trying to figure out how to maintain production and um you know still be able to do the dividends and the share buybacks that are now not as discretionary as they used to be.&#8221;
Furthermore, Dwivedi highlighted the geopolitical risks associated with a rapid U.S. withdrawal of support for Ukraine. He warned that if Ukraine feels cornered, it might target Russian oil infrastructure, which could further impact the global oil supply.
See Also:&nbsp;<a href="https://www.benzinga.com/markets/equities/24/11/42153356/is-warren-buffett-preparing-for-a-market-downturn-with-berkshire-hathaways-325b-cash-pile-analyst-says-internet-bubble-and-2008-crash-may-have-lessons?itm_source=parsely-api" target="_blank" rel="noreferrer noopener">Is Warren Buffett Preparing For A Market Downturn With Berkshire Hathaway&#8217;s $325B Cash Pile? Analyst Says</a>
Why It Matters: Trump&#8217;s energy strategy, which includes faster permitting and weaker environmental regulations, aims to cut American energy costs significantly. However, experts have warned that these<a href="https://www.benzinga.com/news/24/09/40703958/trumps-drill-baby-drill-pledge-may-not-deliver-promised-energy-price-cuts-experts-warn"> promises may not materialize</a> due to the complexities of global and regional energy markets. Many oil drillers remain cautious about increasing production, opting instead to return cash to shareholders. This hesitancy is compounded by factors like weather patterns and global conflicts, which are not easily influenced by policy changes.
Meanwhile, Elon Musk, who has been announced to head the new Department of Government Efficiency (DOGE), continues to <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/11/42130859/as-trump-backs-drill-baby-drill-his-doge-co-lead-elon-musk-believes-all-energy-generation-will-be-solar-heres-what-ubs-recommends-after-election-dip">advocate for solar power</a> as the future of energy generation, presenting a different vision from Trump&#8217;s fossil fuel-focused approach. Analysts also see an opportunity for investment in renewables, highlighting the sector&#8217;s potential for growth even amid political shifts.
Price Action: As per <a href="https://pro.benzinga.com">Benzinga Pro</a>, oil ETFs have seen slight gains in the past one month surrounding the presidential elections. As of Monday, ProShares Ultra Bloomberg Crude Oil (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UCO#NYSE">UCO</a>) increased 3.51%, SPDR S&amp;P Oil &amp; Gas Exploration &amp; Production ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XOP#NYSE">XOP</a>) increased by 10.78%, while MicroSectorsTM Oil &amp; Gas Exploration &amp; Production 3X Leveraged ETNs (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/OILU#NYSE">OILU</a>) increased by 20.99%.
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Image via Shutterstock

General

Amid Trump's 'Drill Baby, Drill' Pledge, Strategist Predicts US Oil Supply Will See 'Marginal' Increase: 'Does The World Need That Much Oil?'

President-elect Donald Trump is considering appointing an &#8220;energy czar,&#8221; a role that would have the authority to nix environmental regulations and increase U.S.<a href="https://www.benzinga.com/government/24/11/41831044/how-to-play-the-trump-trade-for-ai-energy-taxes-analyst-says-5-stocks-could-shine"> fossil fuel production. </a>
What Happened: Trump is looking to appoint an overseer of deregulation efforts across various agencies, including the Department of Energy, Department of Interior, Federal Energy Regulatory Commission, and Environmental Protection Agency.
According <a href="https://www.ft.com/content/f75bd3f1-213f-4501-9005-58b42205ffff">to</a> the Financial Times, North Dakota Gov. and billionaire Doug Burgum is the frontrunner for this so-called energy czar position. 
Read More: <a href="https://www.benzinga.com/general/biotech/24/11/41822473/trumps-potential-health-czar-robert-f-kennedy-jr-rattles-vaccine-stocks-shoot-first-reaction">Trump&#8217;s Potential &#8216;Health Czar&#8217; Robert F. Kennedy Jr. Rattles Vaccine Stocks: &#8216;Shoot First Reaction&#8217;</a>
Burgum initially competed in the Republican primary before endorsing Trump. He previously headed Great Plains Software, becoming its president in 1984, and selling the company to Microsoft Corp. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/MSFT#NASDAQ">MSFT</a>) in 2001 for $1.1 billion. 
He has also served on the board of Atlassian Corp. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TEAM#NASDAQ">TEAM</a>) and most recently served as an energy advisor to Trump during his latest presidential campaign. 
Why It Matters: The news coincides with John Podesta, Biden&#8217;s lead climate diplomat, appearing at the UN climate summit in Baku, Azerbaijan, Monday. He <a href="https://www.axios.com/2024/11/11/top-biden-climate-diplomat-criticizes-trump-at-un-summit">called</a> the Nov. 5 presidential election outcome &#8220;bitterly disappointing.&#8221;
Over the past four years, the Biden Administration <a href="https://www.benzinga.com/personal-finance/24/05/38796993/bidens-1-6-trillion-investment-in-green-energy-sector-has-hit-stonewall-in-the-form-of-unspent-c">expanded clean energy initiatives</a> and <a href="https://www.benzinga.com/government/23/10/35240230/us-is-producing-more-oil-under-biden-than-at-any-point-under-the-trump-administration">produced more oil </a>than the previous Trump Administration.
Ali Zaidi, Biden&#8217;s national climate adviser, will likely be replaced with an energy czar as president-elect Trump targets current climate and energy regulations (i.e., vehicle emissions rules and lifting restrictions on oil and gas drilling). 
Analysts <a href="https://www.benzinga.com/news/24/11/41781921/what-does-trumps-victory-mean-for-ev-giant-tesla-and-the-big-3-automakers">have said </a>such changes could spell trouble for the clean energy and electric vehicle industry, but could be a boon for oil and gas companies.&nbsp;
EV-makers including Rivian Automotive, Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/RIVN#NASDAQ">RIVN</a>) and Lucid Group, Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/LCID#NASDAQ">LCID</a>) could see fewer sales if the Trump administration pulls rebates and tax incentives. However, oil and gas companies like Exxon Mobil Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XOM#NYSE">XOM</a>) and Chevron Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/CVX#NYSE">CVX</a>) could see increased profits as Trump has vowed to lift restrictions on drilling and traditional energy production. 
Investors can also monitor the effects of potential policy changes in the broader EV sector through the iShares Self-Driving EV and Tech ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IDRV#NYSE">IDRV</a>) and oil through the ProShares Ultra Bloomberg Crude Oil ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UCO#NYSE">UCO</a>). 
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Trump Looks To Undo Biden Climate Progress With Burgum As 'Energy Czar': Report

Oil-based exchange-traded funds (ETFs) experienced a significant decline, dropping over 4%, following Israel&#8217;s recent military strikes on Iran. The strikes, which occurred over the weekend, were reported as &#8220;limited&#8221; by local media, leading analysts to downplay the potential impact on oil supplies.
What Happened: Israel&#8217;s military targeted Iranian sites in three provinces on Saturday in response to a ballistic missile attack by Tehran on October 1. According to the Iranian news agency Tasnim, the strikes resulted in the deaths of four soldiers and caused &#8220;limited damages,&#8221; sparing oil, nuclear, and civilian infrastructure. Post the strikes, oil prices saw a sharp decline of more than 4% on Monday, CNBC <a href="https://www.cnbc.com/2024/10/28/oil-slides-over-4percent-as-israels-attack-on-iran-unlikely-to-disrupt-supplies.html">reported</a> on Monday. I
See Also: <a href="https://www.benzinga.com/markets/equities/24/10/41538660/tesla-nvidia-led-market-rally-now-pressures-investment-funds-to-offload-shares-to-avoid-us-tax-l?itm_source=parsely-api" target="_blank" rel="noreferrer noopener">Tesla, Nvidia-Led Market Rally Now Pressures Investment Funds To Offload Shares To Avoid US Tax Lawsuits</a>
Following the attacks, several oil ETFs recorded notable losses.
During pre-market hours on Monday, ProShares Ultra Bloomberg Crude Oil (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UCO#NYSE">UCO</a>) fell by 8.41%, United States Oil Fund LP (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/USO#NYSE">USO</a>) dropped 4.69%, SPDR S&amp;P Oil &amp; Gas Exploration &amp; Production ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XOP#NYSE">XOP</a>) decreased by 1.81%, and MicroSectorsTM Oil &amp; Gas Exploration &amp; Production 3X Leveraged ETNs (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/OILU#NYSE">OILU</a>) saw a 4.54% drop, according to <a href="https://pro.benzinga.com">Benzinga Pro</a>.
Despite the tensions, Iran&#8217;s oil industry remains unaffected, with operations continuing as usual. Iran is responsible for up to 4% of the global oil supply, as per the U.S. Energy Information Administration. The attack comes after an Iran-backed Hamas assault on Israel on Oct. 7 last year.
Why It Matters: The recent strikes add to the ongoing geopolitical tensions that have kept energy markets on edge. Earlier this month, oil prices had already dipped by 2% after OPEC reduced its<a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/10/41320277/oil-prices-drop-2-as-opec-cuts-forecast-irans-output-rises-analyst-says-netanyahu-m"> global oil demand growth forecast</a> for the third consecutive month. This was due to actual consumption data and slightly lowered demand expectations.
Experts had warned that an Israeli attack on Iranian oil facilities could significantly disrupt global oil prices. John Driscoll, chief strategist at JTD Energy Services, highlighted the potential for <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/10/41309234/israels-attack-on-iran-would-rattle-the-nerves-of-oil-market-says-expert">such actions to unsettle the market</a>, drawing parallels to past incidents like the 2019 drone attacks on Saudi oil fields.
Although Iran&#8217;s oil production is lower due to sanctions, any disruption could still lead to a price increase.
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Disclaimer: This content was partially produced with the help of&nbsp;<a href="https://www.benzinga.com/author/benzinga-neuro" target="_blank" rel="noreferrer noopener">Benzinga Neuro</a>&nbsp;and was reviewed and published by Benzinga editors.
Photo by William Potter on Shutterstock

Pre-Market Outlook

Oil ETFs Plunge Premarket After Israel's Strikes On Iran

World&#8217;s second largest oil consumer, China has urged Israel and Iran to reduce escalating tensions, emphasizing the need to avoid a &#8220;vicious circle&#8221; of conflict. This appeal was made during separate phone calls on Monday between China&#8217;s top diplomat Wang Yi and his counterparts from both nations.
What Happened: China is actively mediating in the Middle East. Wang Yi also engaged in discussions with Saudi Arabian Foreign Vice-Minister Waleed bin Abdulkarim El-Khereiji. During a call with Israeli Foreign Minister Israel Katz, Wang expressed China&#8217;s deep concern over the escalating tensions with Iran, stressing that renewed conflict is not beneficial for any nation, South China Morning Post <a href="https://www.scmp.com/news/china/diplomacy/article/3282414/china-calls-israel-and-iran-avoid-falling-vicious-circle?module=top_story&amp;pgtype=homepage">reported</a> on Tuesday.
Wang Yi urged for an &#8220;immediate, complete and permanent&#8221; ceasefire in Gaza, highlighting the importance of releasing hostages and returning to the &#8220;two-state solution&#8221; for lasting peace. Katz, in a post on X, stated that he informed Wang of Iran&#8217;s role in destabilizing the region and expressed expectations for China to maintain a balanced stance.
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In a separate call, Iranian Foreign Minister Seyyed Abbas Araghchi conveyed Tehran&#8217;s concerns about the risk of further conflict escalation. He urged caution from Israel and welcomed China&#8217;s mediation efforts to restore regional peace and security.
Why It Matters: The call for de-escalation by China comes amid a backdrop of fluctuating oil prices and geopolitical tensions in the Middle East. Recently, oil prices fell over 1% due to concerns over <a href="https://www.benzinga.com/markets/asia/24/10/41257792/oil-dips-to-73-as-china-withholds-stimulus-biden-attempts-to-contain-netanyahu-over-israels-attack-o">weaker demand from China.</a> This occurred after China withheld aggressive fiscal stimulus that analysts had anticipated.
Additionally, <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/10/41320277/oil-prices-drop-2-as-opec-cuts-forecast-irans-output-rises-analyst-says-netanyahu-m">oil prices dropped 2%</a> after OPEC reduced its global oil demand growth estimate for the third consecutive month. This decline in oil prices reflects broader concerns about the Middle East&#8217;s geopolitical stability, particularly as Israel has not yet retaliated against Iran following a recent attack involving over 180 ballistic missiles.
Price Action: At the time of writing on Tuesday during the pre-market, United States Oil Fund, LP (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/USO#NYSE">USO</a>) was down by 4.81%, Invesco DB Oil Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DBO#NYSE">DBO</a>) was trading 5.11% lower and ProShares Ultra Bloomberg Crude Oil (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UCO#NYSE">UCO</a>) was down by 8.13%, according to <a href="https://pro.benzinga.com">Benzinga Pro</a>.
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Image via Shutterstock
This story was generated using <a href="https://www.benzinga.com/author/benzinga-neuro">Benzinga Neuro</a> and edited by <a href="https://www.benzinga.com/topic/Pooja-Rajkumari" target="_blank" rel="noreferrer noopener">Pooja Rajkumari</a>

After Pulling Down Oil Prices With Weak Demand, China Urges Israel, Iran To Avoid 'Vicious Circle' Of Conflict

Crude oil prices dropped sharply late Monday afternoon after The Washington Post reported Israeli Prime Minister Benjamin Netanyahu told the Biden administration he is willing to strike military targets rather than oil or <a href="https://www.benzinga.com/government/24/10/41298349/us-hits-iran-oil-exports-with-new-sanctions-after-israel-attack-crude-oil-holds-steady-at-75">nuclear facilities in Iran.&nbsp;</a>
The Details: Netanyahu told President Joe Biden in a call last Wednesday he is planning to target military infrastructure in a retaliatory strike against Iran, according to a U.S. official and an official <a href="https://www.washingtonpost.com/world/2024/10/14/israel-iran-strike-nuclear-oil-military/">familiar with the matter</a>. 
The sources also said Israel's action against Iran will be designed to avoid any perception of "political interference in the U.S. elections" noting an attack on Iranian oil facilities could send energy prices higher. The official familiar with the matter described Netanyahu as being in a "more moderated place" during the call between the two leaders.&nbsp;
Read Next: <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/10/41320277/oil-prices-drop-2-as-opec-cuts-forecast-irans-output-rises-analyst-says-netanyahu-m">Oil Prices Drop 2% As OPEC Cuts Forecast, Iran&#8217;s Output Rises: Analyst Says Netanyahu May Doubt US Commitment To &#8216;Restricting Iranian Exports&#8217;</a>
What Else: The United States Oil Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/USO#NYSE">USO</a>) which tracks West Texas Intermediate (WTI) light crude fell 2.01% in Monday's regular trading session after OPEC lowered its 2024 global <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/10/41320277/oil-prices-drop-2-as-opec-cuts-forecast-irans-output-rises-analyst-says-netanyahu-m">oil-demand growth forecast</a> and its 2025 global oil-demand growth forecast. 
In its Monthly Oil Market Report <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/10/41320277/oil-prices-drop-2-as-opec-cuts-forecast-irans-output-rises-analyst-says-netanyahu-m">released on Monday</a>, OPEC reduced its 2024 oil demand growth estimate by 106,000 barrels per day (bpd), now expecting global demand to increase by 1.93 million bpd next year. Additionally, the forecast for 2025 demand growth was lowered by 102,000 bpd to 1.6 million bpd year-over-year.
The ProShares Ultra Bloomberg Crude Oil (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UCO#NYSE">UCO</a>) fund fell more than 2% in regular trading Monday following the lower global oil-demand growth forecast and is down another 4.51% at $27.50 after-hours. 
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Photo: Shutterstock

Movers

Oil Prices Drop After Netanyahu Says Israel Will Attack Military, Not Oil Or Nuclear Targets In Iran

Amid rising geopolitical tensions, energy markets are on edge as experts warn of potential disruptions. An Israeli military action targeting Iranian oil facilities could significantly impact global oil prices, according to industry analysts.
What Happened: John Driscoll, chief strategist at JTD Energy Services, highlighted the potential impact of an Israeli attack on Iranian oil facilities. Driscoll noted that such an event could significantly influence oil prices, drawing parallels to past incidents like the 2019 drone attacks on Saudi Arabian oil fields, according to <a href="https://www.cnbc.com/video/2024/10/14/israel-attack-on-iran-oil-bases-would-have-dramatic-effect-strategist.html">CNBC</a> on Monday.
Driscoll explained that while Iran&#8217;s oil production is around 2.5 to 3 million barrels per day, its exports are considerably lower due to sanctions. A disruption in Iranian exports, even by half a million barrels per day, could lead to a substantial price increase. He emphasized that Iran, though not as pivotal as Saudi Arabia or Abu Dhabi, still plays a role that could unsettle the market.
&#8220;While Iran is not as critical a player as say the Saudis or Abu Dhabi or Kuwait, you know still this is going to have a dramatic effect. It&#8217;s going to rattle the nerves of the oil markets,&#8221; Driscoll said.
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The strategist remarked that traders thrive on market volatility, and such geopolitical tensions could provide them with lucrative opportunities. Driscoll warned that the oil market should brace for a turbulent period in the coming weeks, as any military action could create significant fluctuations in oil prices.
Why It Matters: The potential for an Israeli strike on Iranian oil facilities comes amid heightened tensions in the region. Earlier this month, President Joe Biden confirmed that the<a href="https://www.benzinga.com/government/24/10/41172781/oil-prices-rally-biden-confirms-us-discussions-with-israel-about-striking-iran-facilities"> U.S. had discussions with Israel </a>about targeting Iran&#8217;s oil infrastructure, causing oil prices to surge by over 5%. Although Biden appeared hesitant about the idea, the mere possibility has already influenced market dynamics.
Additionally, the U.S. recently imposed new sanctions on Iran&#8217;s petroleum and petrochemical sectors following Iran&#8217;s attacks on Israel, aiming to cut off revenue streams that <a href="https://www.benzinga.com/government/24/10/41298349/us-hits-iran-oil-exports-with-new-sanctions-after-israel-attack-crude-oil-holds-steady-at-75">fund destabilizing activities</a> in the Middle East. These developments underscore the fragile state of the oil market, where geopolitical events can lead to significant price volatility.
Price Action: On Monday, during the pre-market hours, oil ETFs were showing mixed activity as per <a href="https://pro.benzinga.com">Benzinga Pro</a>. United States Oil Fund, LP (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/USO#NYSE">USO</a>) was down by 2.37% while ProShares UltraShort Bloomberg Crude Oil (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SCO#NYSE">SCO</a>) was up by 4.40%. Meanwhile, ProShares Ultra Bloomberg Crude Oil (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UCO#NYSE">UCO</a>) was trading 4.29% lower. 
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Disclaimer: This content was partially produced with the help of&nbsp;<a href="https://www.benzinga.com/author/benzinga-neuro" target="_blank" rel="noreferrer noopener">Benzinga Neuro</a>&nbsp;and was reviewed and published by Benzinga editors.
Photo by Hamara via Shutterstock

Potential Israeli Attack On Iran Would 'Rattle The Nerves Of Oil Market,' Says Expert

Oil is trading more than 5% higher Thursday on the heels of President Joe Biden&#8216;s statement that the U.S. spoke with Israel about a possible attack on Iran's oil facilities.
"We're in discussions about that,&#8221; Biden said during an interaction with reporters. 
Biden seemingly indicated he wasn&#8217;t partial to the idea of striking at Iran&#8217;s oil facilities, before cutting himself off: &#8220;I think that would be a little&#8230; anyway.&#8221; See video below.
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When one reporter asked whether Biden would &#8220;allow&#8221; Israel to retaliate against Iran, Biden swiftly corrected him: &#8220;First of all, we don&#8217;t &#8216;allow&#8217; Israel. We advise Israel.&#8221;
<a href="https://www.benzinga.com/news/23/10/35136071/israel-under-siege-unprecedented-hamas-attack-sparks-intense-clashes-netanyahu-says-we-are-at-war">Since Oct. 7, 2023</a>, Israel has been fighting Hamas in Gaza as well as Hezbollah in Lebanon. Both groups are considered terrorist organizations by the U.S. 
See Also: <a href="https://www.benzinga.com/news/24/10/41134015/jd-vance-tim-walz-debate-sets-a-different-tone-candidates-discuss-israel-iran-escalation-immigration">JD Vance, Tim Walz Debate Sets A Different Tone, Candidates Discuss Israel-Iran Escalation</a>
<h3 class="wp-block-heading">Oil And The Israel-Iran Conflict</h3>
Iran is the seventh-largest oil producer in the world. The country, which backs the Hezbollah militant group, exports around half its production abroad. 
China, where <a href="https://www.benzinga.com/markets/asia/24/08/40596334/asia-markets-mixed-europe-gains-crude-oil-falls-on-chinese-demand-concerns-global-markets-today-whil">oil demand is weak</a>, is its main customer.
Since Iran's <a href="https://www.benzinga.com/news/global/24/10/41126038/iran-attacks-israel-with-missiles-middle-east-tensions-escalates-s-p-500-stocks-bitcoin-fall-as-oil">missile attack on Israel</a> on Monday, the price of barrels has fluctuated. As of Oct. 3, the price of West Texas Intermediate (WTI) crude oil is $73.83 per barrel. This reflects a 5.32% increase from the previous day&#8217;s close of $70.10.
The price of Brent crude is approximately $77.76 per barrel. It has fluctuated within a range of $74.33 to $77.58 for the day.
The U.S., which is producing more oil under Biden than any other U.S. presidential administration, has been filling its reserves. The Biden administration acquired an additional <a href="https://www.benzinga.com/markets/eurozone/24/10/41146905/geopolitical-risks-may-be-biggest-threat-to-markets-boe-says">6 million barrels of crude</a> just this week.
It&#8217;s worth noting that ongoing violence in the Middle East puts the Straits of Hormuz at risk. A third of tanker traffic and a fifth of LNG frozen gas is transported through that passageway. 
The U.S. and its allies are likely determined to keep the Strait open due to its strategic importance. Any attempt to block the Strait could provoke military intervention.
Iran controls much of the northern coastline of the Strait and has previously threatened to block the passage in response to sanctions or conflicts with Western countries. 
<h3 class="wp-block-heading">Market Reaction</h3>
So far, market reaction to the Middle East conflict is relatively mute compared to February 2022 when Russia invaded Ukraine.
At the time, the oil market reacted with significant volatility and disruption, leading to a sharp rise in global prices. 
Brent crude, the global benchmark, surged above $100 per barrel for the first time since 2014, and by March 2022, it had briefly spiked to $139 per barrel, near the all-time high.
Oil-related exchange-traded funds, or ETFs, were trending up at last check Thursday afternoon. Here&#8217;s where they stand: 
<ul>
<li>United States Oil Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/USO#NYSE">USO</a>) is up 4.05% to $75.71</li>
<li>Invesco DB Oil Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DBO#NYSE">DBO</a>) is up 4.08% at $15.06</li>
<li>SPDR S&amp;P Oil &amp; Gas Exploration &amp; Production ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XOP#NYSE">XOP</a>) is up 3.1% at $139.56</li>
<li>Energy Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLE#NYSE">XLE</a>) up 1.65% at $92.22</li>
<li>ProShares Ultra Bloomberg Crude Oil (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UCO#NYSE">UCO</a>) is up 6.59% at $28.81</li>
<li>VanEck Vectors Oil Services ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/OIH#NYSE">OIH</a>) is up 1.89% at $297.58</li>
</ul>
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Image: Shutterstock

Oil Prices Rally: Biden Confirms US 'Discussions' With Israel About Striking Iran Facilities

WIIM

Oil is trading higher following a report suggesting that President Biden said the US Is "discussing" potential support for Israel striking Iran's oil facilities when asked about the issue.

Macro Economic Events

Economics

Oil is trading higher following Iran's Tuesday attack on Israel, which has caused supply uncertainty.

ProShares Ultra Bloomberg Crude Oil (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/UCO#NASDAQ">UCO</a>) shares are trading higher by 6.43% to $27.06 Tuesday. Geopolitical tensions in the Middle East are once again on the rise, and this time, the potential for <a href="https://www.benzinga.com/etfs/broad-u-s-equity-etfs/24/10/41120592/iran-set-to-launch-ballistic-missile-attack-against-israel-report">significant conflict</a> is having a direct impact on financial markets, particularly in the energy sector.
The latest development comes from reports that Iran has launched a ballistic missile attack on Israel in retaliation for an airstrike that reportedly killed Hezbollah leader Hassan Nasrallah.
As tensions escalate, the market is responding, and one of the major movers is UCO.
Why This Matters: UCO is a leveraged exchange-traded fund (ETF) designed to provide investors with twice the daily return of the Bloomberg WTI Crude Oil Subindex, which tracks the price movements of West Texas Intermediate (WTI) crude oil. 
Essentially, UCO moves in direct correlation with oil prices, but with twice the volatility. When oil prices rise, UCO magnifies those gains, making it a popular choice for investors looking to capitalize on significant shifts in the energy market. On the flip side, it also carries higher risks due to its leverage.
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The ongoing conflict between Iran and Israel is particularly concerning for global oil markets because the Middle East remains a critical region for oil production and export. Iran, a major oil producer, controls access to the Strait of Hormuz, a vital chokepoint through which approximately 20% of the world's oil supply passes. 
Any conflict involving Iran could disrupt oil flows through the Strait, leading to supply shortages and sharp increases in crude oil prices. The threat of a ballistic missile attack by Iran increases the likelihood of a broader regional conflict, which would exacerbate fears of supply disruptions.
What Else: As reports of these imminent attacks surfaced, the price of crude oil surged, with investors rushing to hedge against the uncertainty. The United States Oil Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/USO#NYSE">USO</a>), which directly tracks oil prices, saw a 3% increase, while UCO spiked even higher due to its leveraged nature. 
UCO's upward movement reflects the market's anticipation that if tensions in the Middle East continue to escalate, crude oil prices could soar further.
In addition to the direct impact on oil supply routes, increased military presence by the United States in the region could further strain relations with Iran, potentially leading to sanctions or military engagements that could disrupt oil exports from the region. In such a scenario, oil prices would likely surge even more dramatically, pushing UCO to higher levels.
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According to data from&nbsp;<a href="https://benzinga.grsm.io/register174">Benzinga Pro</a>, UCO has a 52-week high of $36.51 and a 52-week low of $22.88.

Why ProShares Ultra Bloomberg Crude Oil (UCO) Is Up 6% Today

Macro Notification

Oil is trading higher following a report suggesting Iran could be preparing to attack Israel.

Oil futures edged up but then fell on Monday as <a href="https://www.benzinga.com/markets/commodities/24/09/40754979/gas-station-charges-less-than-2-50-per-gallon-how-inflation-energy-prices-are-faring-now">a possible hurricane </a>makes its way toward the U.S. Gulf Coast, continuing last week&#8217;s losses.
Brent crude was up 16 cents, or 0.23%, to $71.22 a barrel at 8:15 a.m. ET while West Texas Intermediate crude futures were 19 cents, or 0.28%, higher at $67.86, Reuters reported.
By 10 a.m. ET, however, Brent crude slipped 26 cents, or 0.37%, to $70.80 a barrel by 10 a.m. ET while West Texas Intermediate crude futures were down 21 cents, or 0.3%, at $67.53.
Prices of Brent crude had dropped over the past six trading sessions, falling by more than 11%, or almost $9 a barrel, to post the lowest closing price since December 2021 on Friday.
Analysts noted that Monday&#8217;s brief rebound was driven in part by concerns over a potential hurricane approaching the U.S. Gulf Coast, along with supply disruptions from Libya, which have been pushing prices higher, according to Reuters.
Libya&#8217;s NOC (National Oil Corporation) late last week declared force majeure on several crude cargoes loading from the Es Sider port, with oil production curtailed by a political standoff over the central bank and oil revenue, four trading sources with knowledge of the matter told Reuters.
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A weather system in the southwestern Gulf of Mexico is forecast to become a hurricane before it reaches the northwestern U.S. Gulf Coast, the U.S. National Hurricane Center said on Sunday. The U.S. Gulf Coast accounts for about 60% of U.S. refining capacity.
&#8220;A small recovery in prices is under way this morning, inspired by hurricane warnings that might threaten the U.S. Gulf Coast, but the wider conversation remains on where demand will come from and what OPEC+ can do,&#8221; said PVM analyst John Evans, according to Reuters.
The OPEC+ oil producer group last week held back a planned output increase of 180,000 barrels per day for October by two months in reaction to tumbling crude prices
Trading houses Gunvor and Trafigura are expecting oil prices to range between $60 and $70 a barrel due to sluggish Chinese demand and persistent oversupply, executives told the APPEC conference in Singapore on Monday.
Meanwhile, Morgan Stanley cut its Brent price forecast for the fourth quarter from $80 a barrel to $75, adding that prices are likely to remain around that level unless demand weakens further.
Price Action: Oil companies saw gains into Monday&#8217;s early-morning trading.
<ul>
<li>Exxon Mobil Corporation (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XOM#NYSE">XOM</a>) gained 0.56% to $113.28</li>
<li>Chevron Corporation (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/CVX#NYSE">CVX</a>) rose 0.58% to $139.37</li>
<li>Marathon Oil Corporation (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/MRO#NYSE">MRO</a>) picked up 0.52% to $26.86</li>
</ul>
Exchange-traded funds that hold oil stocks declined.
<ul>
<li>United States Oil Fund LP (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/USO#NYSE">USO</a>) declined 1.15%</li>
<li>ProShares Ultra Bloomberg Crude Oil (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UCO#NYSE">UCO</a>) fell 2.13%</li>
<li>United States Brent Oil Fund LP (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BNO#NYSE">BNO</a>) declined 1.04%</li>
</ul>
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Image created using artificial intelligence via Midjourney.

Futures

Oil Prices Seesaw As Potential Storm Nears US Gulf Coast

Oil prices fell on Wednesday after OPEC+ sources said that it was talking about holding back a plan <a href="https://www.benzinga.com/news/24/09/40703958/trumps-drill-baby-drill-pledge-may-not-deliver-promised-energy-price-cuts-experts-warn">to boost output</a> in October due to concerns over demand and production possibly coming back to Libya.
Brent crude futures were down 53 cents, or 0.72% , to $73.20 as of 12:15 pm ET Wednesday. 
U.S. West Texas Intermediate crude futures were down 57 cents, or 0.81%, to $69.77. 
Both benchmarks had earlier lost $1 and then bounced back to gain $1 from Tuesday&#8217;s close, following the OPEC+ news.
A broader sell-off had seen prices for Brent crude futures drop as much as 11%, or about $9, in a little over a week to reach a low of $72.63 on Wednesday, Reuters reported. Benchmark prices fell more than 4% Tuesday.
Weak data from the U.S. and China had boosted forecasts of a weaker global economy and oil demand that triggered a broader decline&nbsp;in world markets.
Read Also: <a href="https://www.benzinga.com/trading-ideas/24/09/40687828/brent-crude-under-pressure-amid-supply-expansion-concerns">Brent Crude Under Pressure Amid Supply Expansion Concerns</a>
At the same time, traders believed a dispute stopping Libyan oil exports may come to an end and therefore increase crude oil supply.
These factors have concerned OPEC+ over market volatility after the group planned to boost output in October, making it consider delaying the hikes.
 China&#8217;s manufacturing activity fell to a six-month low in August as growth in new home prices&nbsp;cooled off, according to data released Saturday.
Meanwhile, in the U.S., Institute for Supply Management data on Tuesday showed manufacturing stayed soft.
Reports from the American Petroleum Institute are due at 4:30 p.m. ET Wednesday and from the Energy Information Administration at 11 a.m. ET Thursday.
Price Action: Oil companies and exchange traded funds that hold their stocks trended downward into Wednesday&#8217;s early-afternoon trading.
<ul>
<li>Exxon Mobil Corporation (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XOM#NYSE">XOM</a>) slipped 0.62% to $114.75 </li>
<li>Chevron Corporation (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/CVX#NYSE">CVX</a>) declined 0.82% to $143.48</li>
<li>Shell plc (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SHEL#NYSE">SHEL</a>) fell 0.80% to $68.83</li>
<li>United States Oil Fund LP (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/USO#NYSE">USO</a>) slid 1.31% to $70.16</li>
<li>ProShares Ultra Bloomberg Crude Oil (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UCO#NYSE">UCO</a>) lost 2.33% to $25.58</li>
<li>United States Brent Oil Fund LP (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BNO#NYSE">BNO</a>) declined 1.11% to $28.40</li>
</ul>
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Photo: Shutterstock

Oil Prices Retreat As OPEC+ Discusses Delay In Production Hikes

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