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Below the Perspective on Crude Oil Prices by Mr. NS Ramaswamy, Head of Commodities & CRM at Ventura 

Supply shock to move up Crude Oil prices

(Near Term 5%; Short Term 11%)

U.S. President Donald Trump has given Russia a deadline of 10-12 days to end war in Ukraine, failing which runs a risk of additional sanctions and secondary tariffs of 100% on countries trading with Russia which would push the oil prices higher. For the countries depended on crude oil imports from Russia, it’s a tradeoff between a discounted price Vs a high tariff on exports to the US.

This might result in a dramatic shift to the oil market while reducing the spare production capacity and a supply shock to the oil market waning the surplus in the market through 2026.

Dichotomy is about the U.S. President Donald Trump wanting to see lower oil prices. In such an eventuality, any meaningful supply increases from the US would take time to come to the market. Tapping the proved oil reserves is not a simple flipping of a switch but involves labor, capital and infrastructure besides the risk of a justified price.

Support from Saudi Arabia and select OPEC countries to fill this supply gap would also have time lag thus resulting in the near-term price rise. The impact of the oil balance would be significant and result in deficit even if OPEC+ doesn’t go for any additional tranches of supply cuts.

Meanwhile last week the US and European Union trade deal has aided the oil market. Geo- political tensions have not gone away, and they continue to pose asymmetric upside risks to oil prices.

Markets weighed on the potential build-in US inventories and upcoming interest rate decision, which saw strength in the US Dollar putting some pressure on oil prices. Adding to which was the US-China extended trade truce.

Price outlook on a best-case scenario:

* WTI Crude Oil (Sep’25) from $69.65 has a short-term target of $73. Year end 2025 could reach $76-$79. Downside support and cap at $65.

* Brent Oil (Oct’25) from $72.07 has a short-term target of $76. Year end 2025 could reach $80-$82. Downside support and cap at $69.

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