Trump Oil Conundrum. The Energy Report 09/19/2025

U.S. President Donald Trump said Thursday that a decline in oil prices could prompt Russian President Vladimir Putin to end the war with Ukraine, noting that stopping Russian oil purchases by Europe, India, and China is crucial. Yet the conundrum is that if the world stops buying Russian oil,  prices will go up for everyone but Russia if everyone stops buying Russian oil.

Yet, according to Bloomberg, Indian refiners have no intention of halting purchases of Russian crude, as domestic fuel demand is set to rise following the monsoon season. Procurement activity is expected to remain robust for deliveries scheduled in November and December, though the volumes may not reach the highs observed in previous years. While flows of Russian oil to India slowed in response to U.S. pressure, Bloomberg notes that shipments are likely to increase due to ample availability of Urals crude and a reported softening of American pressure. Regardless, President Trump’s declaration was enough to break the price of oil as the President has a knack for jawboning oil prices.

The market is currently awaiting verification of Ukraine’s report that the country’s Special Operations Forces conducted a strike on the Volgograd Oil Refinery, located in Russia’s Volgograd region. As the largest producer of fuel and lubricants in Russia’s Southern Federal District, the refinery supplies the Russian Armed Forces. It has an annual processing capacity of 15.7 million tons, representing 5.6% of Russia’s total oil refining volume.

Obviously the geopolitical risk factor is remain high and even in the shoulder season, the market seems to be doubting the predictions of a massive oil glut. Oil prices continue to be stuck in this trading range and predictions of the oil price crash don’t seem to be developing. We have seen relatively stable prices caught between this range and the longer we stay here the better of the case for an upside breakout.

Keep in mind the longer-term outlook for oil and gas demand is incredible.

Just Remember ExxonMobil forecasts a 15% rise in global energy demand by 2050, attributing this trend to population growth and higher living standards in developing countries. The company anticipates that oil and natural gas will account for more than half of the world’s energy supply in 2050, with demand for natural gas projected to increase at a faster rate than oil. Although renewable sources such as wind and solar are expected to expand significantly, they are not projected to completely replace fossil fuels during the period considered.

The Wall Street Journal said it best in a must read where they wrote, “The world must continue investing in oil and gas to sustain current production levels as output from existing fields declines more rapidly, the International Energy Agency said. Annual investment in the upstream sector—which includes exploration, drilling and production—would need to average around $540 billion through 2050, compared with an estimated $570 billion this year, according to the report released Tuesday. Back in 2021, the agency said there was no need to invest in new oil, coal and gas projects on the path to reach net-zero emissions by the middle of the century.

A halt in upstream investment in existing fields would reduce global production by 5.5 million barrels a day every year over the next decade—the equivalent of losing Brazil and Norway’s combined output each year, according to the IEA.  “The situation means that the industry has to run much faster just to stand still,” said Executive Director Fatih Birol on Tuesday. The Organization of the Petroleum Exporting countries on Tuesday criticized the agency, saying its 2021 report and peak oil-demand forecast have “discouraged investments and contributed to uncertainty about long-term oil demand.” OPEC has that right.

Natural gas traders got blindsided and rolled over after yesterday’s much larger than expected injection into inventory. The EIAs said that working gas in storage was 3,433 Bcf as of Friday, September 12, 2025, according to EIA estimates. This represents a net increase of 90 Bcf from the previous week. Stocks were 4 Bcf less than last year at this time and 204 Bcf above the five-year average of 3,229 Bcf. At 3,433 Bcf, total working gas is within the five-year historical range. Call Phil Flynn to discuss the numbers at 888-264-5665.

Additionally, there is an increase in tropical activity. Fox Weather reports that tropical Storm Gabrielle is expected to strengthen into the second hurricane of the Atlantic season by Sunday as it encounters more favorable conditions for development within the next three days, according to a Friday morning advisory from the National Hurricane Center (NHC). The NHC said the storm is expected to pass somewhere to the east of Bermuda Sunday night, but it’s too soon to know what Gabrielle’s exact impacts will be on the island. Tropical Storm Gabrielle, which had been known as Invest 92L and then Tropical Depression Seven, formed on Wednesday after a weekslong lull in tropical activity as we continue through the latter half of the 2025 Atlantic hurricane season.

Download the Fox Weather ap to stay up with the latest moves on the storm. Stay tuned to the Fox Business Network invested in you! Make Sure you get your trade levels by calling 888-264-5665 or email Phil Flynn at pflynn@pricegroup.com.