After hitting interim highs in June, the spot West Texas Intermediate (WTI) oil price is currently resting near a four-year low at about $62/bbl, as U.S. tariffs and counter-tariffs continue to provoke market angst about weakening crude oil demand. The two main adversaries in the trade war–the U.S. and China–are, respectively, the number one and number two consumers of crude oil in the world. Of the 104 million barrels per day (mb/d) in world crude oil demand in 2024, the U.S. accounted for about 20% of the total and China 16%. A more severe global economic slowdown, which may be caused by the trade war between the U.S. and China, could have a significant negative effect on crude oil demand.

Key Highlights
– Global trade barriers combined with gradually increasing supply from OPEC+ and the Americas will continue to weigh on the oil price in the near term. There are no credit rating actions as a direct result of the changes made to our oil and gas price forecasts.
– We are increasing our 2025 WTI oil price forecast to $65/bbl from $60/bbl to reflect actual year-to-date prices; there is no change to our 2026 forecast of $60/bbl.

— We are trimming our 2025 and 2026 AECO gas price forecasts to CAD 1.55/mcf and CAD 2.50/mcf, respectively, to reflect year-to-date prices and continued oversupply in the Western Canada Sedimentary Basin.

According to Andrew O’Conor, Senior Vice President, Energy, Utilities & Natural Resources, “Year to date, tariff-related economic worries have more than offset price support from U.S. sanctions against the Iranian and Russian energy sectors, but the ongoing Russia-Ukraine war and Arab-Israeli conflict could lead to a meaningful disruption of oil supply, potentially causing oil prices to surge. Oil tankers originating from the Persian Gulf continue to be routed away from the Red Sea. Recent Ukrainian drone strikes on Russian energy infrastructure have significantly disrupted refined production there, helping to boost refined product pricing globally and, if sustained, potentially supporting crude oil pricing.
Source: Morningstar DBRS