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First Look - Oil slides as Trump threatens EU tariff

May 23, 2025 | Narciso Cano

Trump Threatens 50% Tariff on EU Goods (Bloomberg)
- Oil prices dropped after President Trump announced a potential 50% tariff on European Union goods starting in June, citing stalled trade negotiations: “Our discussions with them are going nowhere.”
- The WTI prompt-month contract declined $0.62 to $60.58/Bbl as of 7:45 AM CT Friday
- Trump also criticized the UK’s windfall tax on North Sea oil and gas producers, claiming it discourages drilling and drives up energy prices
  - The UK’s oil and gas output hit a record low last year, extending a two-decade-long production decline, according to official data
- Iran Pushes for Deal Ahead of Nuclear Talks (Bloomberg)
  - Tehran declared it’s “time to decide” ahead of Friday’s nuclear negotiations with the US, with uranium enrichment rights remaining the key sticking point
  - Iran demands the ability to continue low-level enrichment for civilian use, while US signals on the issue have been inconsistent
  - President Trump recently hinted that lifting oil sanctions could be part of a potential deal
    - A successful agreement could allow Iran’s oil exports to rebound to as much as 2.5 MMBbl/d, intensifying fears of a supply glut

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Natural gas heads for a weekly loss
- Temperature forecasts shifted warmer, with Lower-48 forecasts showing temperatures rising to the 10-year average over the next two weeks
- Production remains stable near 105 Bcf/d
- LNG feedgas volumes fell to 14.8 Bcf/d, with declines in inflows from several facilities
Skepticism around Mexico’s plan to boost gas supply (S&P)
- Pemex is working on several projects aimed at increasing domestic gas supply, although the projects face numerous challenges
- One of the primary goals is to support industrialization in the country’s southeast region, although there is limited gas available and the local supply has high nitrogen content which requires additional processing
- Currently, about 75% of Mexico’s gas is supplied by the US, and storage in the country is very limited
- Even if the country can increase production, growing demand will likely keep it reliant on imports from the US for the foreseeable future

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