Mid-Week Market Review: April 2025, Edition 1

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Commodities

Despite a dip on Friday caused by growing concerns over the potential for U.S. tariff disputes, oil prices ended the week on a positive note, marking their third consecutive weekly gains. The upward trend was driven by increasing pressure from Washington on key OPEC members, including Venezuela and Iran, alongside tightening global supply conditions.

Brent crude futures declined by 67 cents on Friday, settling at $73.38 per barrel, while WTI crude futures dropped 85 cents to close at $69.04 per barrel. Although Friday’s dip reflected broader market concerns, looking at the week as a whole, both Brent and WTI crude oil showed positive weekly gains. Specifically, Brent crude rose by 1.75% over the week, while WTI increased by 1.10%.

This overall upward movement can be attributed to a combination of factors, including geopolitical tensions, U.S. sanctions, and ongoing disruptions to supply from key oil-producing nations.

Key Drivers of Price Movements

U.S. Sanctions and Tariffs on Venezuela and Iran: U.S. sanctions and tariffs significantly influenced oil prices. President Trump announced new 25% tariffs on potential buyers of Venezuelan crude, a move that is expected to further strain the country’s already struggling oil sector. With Venezuela’s production expected to fall by 200,000 barrels per day this year, the tariffs are likely to exacerbate the situation.
Additionally, the U.S. has implemented multiple rounds of sanctions targeting Iranian oil exports. The most recent sanctions aim to reduce Iran’s exports to zero, further tightening global supply and increasing market uncertainty.
Trade Relations and Market Uncertainty: The sanctions have already disrupted Venezuelan oil exports, particularly to China, its largest buyer, as well as significant disruptions in the flow of oil to other countries. Notably, India’s Reliance Industries, which operates the world’s largest refining complex, also announced it would stop imports of Venezuelan crude due to sanctions.
These disruptions are forcing markets to reassess global supply expectations. The uncertainty surrounding these sanctions is contributing to increased volatility in oil prices, as market participants remain unsure of the long-term impacts on global supply.
U.S. Supply Adjustments: In another major development, the U.S. Energy Information Administration (EIA) released data showing a 3.3 million-barrel drop in U.S. crude inventories for the week, bringing stockpiles down to 433.6 million barrels. This reduction in inventories, alongside the tightening global supply, supported rising oil prices.
OPEC+ Production Adjustments: The OPEC+ group continues to monitor the global supply trends, with planned production increases set to begin in April. The group is expected to raise output by 135,000 barrels per day in April, with further increases anticipated in May. Historically, OPEC+ has managed production carefully to avoid oversupply, and market participants are watching closely for any policy shifts.

Geopolitical Tensions and Risk of Supply Disruptions

In addition to U.S. sanctions, the geopolitical outlook continues to evolve in ways that could further impact the global oil supply. Some of them include:

Russia’s Role in Global Oil Markets: Concerns about potential U.S. secondary sanctions on Russian oil remain. While President Trump has indicated that immediate sanctions are unlikely, the possibility continues to affect global market sentiment.
In a related development, Russia announced it was considering the closure of two of Kazakhstan’s three oil export terminal moorings, as part of ongoing disputes within OPEC+ regarding production cuts. This could exacerbate the situation, particularly for nations dependent on Russian and Kazakh oil.
U.S.-Iran Tensions: Another factor weighing on oil prices is the ongoing standoff between the U.S. and Iran. President Trump has been vocal about his intentions to exert maximum pressure on Iran, with recent threats of military action and secondary sanctions if Tehran does not comply with Washington’s demands regarding its nuclear program.
Iran has responded defiantly, with Supreme Leader Ayatollah Ali Khamenei warning the U.S. that it will face a strong reaction to any military or economic actions. In a highly symbolic move, Iran’s Revolutionary Guards seized two foreign tankers in the Persian Gulf, further elevating risks in the vital Strait of Hormuz, a key global oil transit route.

Impact on Companies and Global Trade: Repsol, a major Spanish oil company, has come under scrutiny as U.S. authorities have warned it about the impending revocation of its license to export oil from Venezuela. This development further weakens Venezuela’s struggling oil sector, already hampered by years of sanctions and mismanagement.

Market Outlook: Continued Volatility

As we look ahead to the next week, oil prices will remain highly sensitive to geopolitical developments, particularly U.S.-Iran tensions, U.S. tariffs on Venezuela, and evolving conditions in Russia. The upcoming OPEC+ ministerial meeting on April 5th is expected to provide further insight into the group’s production strategy.

Broader economic concerns persist, with fears of a potential global recession looming. While oil prices have been supported by supply constraints, there is growing apprehension that U.S. tariffs could dampen global energy demand and slow economic growth. Nevertheless, supply reductions from Venezuela, Iran, and Russia continue to provide underlying support for oil prices.

Alternative Assets

The cryptocurrency market experienced significant volatility over the past week, driven by macroeconomic concerns and policy shifts. Bitcoin (BTC) dropped below $84,000 on March 28, reversing earlier gains and settling at $83,257 by April 1, marking a 3% decline within 24 hours. Leading altcoins, including Ethereum (ETH), XRP, BNB, and Solana (SOL), posted losses of 4% to 6%. Ethereum fell to its lowest level against Bitcoin since May 2020. The total cryptocurrency market capitalization declined by over $160 billion since March 28, closing the week at approximately $2.77 trillion.

A key driver behind this decline was the impending U.S. tariffs, set to take effect on April 2, have fueled market uncertainty. Referred to as “Liberation Day” by the Trump administration, the new policy imposes 25% duties on imports from Canada, Mexico, and China, raising fears of economic repercussions. This announcement led to a wave of “derisking,” triggering over $300 million in long-position liquidations across major exchanges. Despite the downturn, gold-backed tokens such as PAXG and XAUT outperformed, rising above $3,100 as investors sought safer assets.

On the regulatory front, Japan’s Financial Services Agency (FSA) announced plans to classify crypto assets as financial products under the Financial Instruments and Exchange Act. This change would introduce new regulations, including insider trading restrictions, further legitimizing cryptocurrency in Japan. Meanwhile, in the U.S., mixed signals emerged. Trump’s family tightened control over World Liberty Financial, raising over $500 million despite concerns over insider-friendly terms. The SEC’s recent crypto-friendly stance, such as dropping its case against Ripple-offered some optimism, but investor sentiment remained fragile

Bitcoin showed some resilience, gaining 1.34% to reach $83,257 on April 1. Historically, April has been a strong month for Bitcoin, with average gains of 27% since 2010. Analysts, including Coin Bureau’s Nic Puckrin, speculate that if Bitcoin surpasses $93,000, it could replicate the 360% rally seen in 2017. However, market volatility remains at a six-month high, with the Crypto Fear and Greed Index signaling “Extreme Fear,” highlighting the fragile investor sentiment.

Institutional involvement continues to shape the market. Grayscale’s Q2 2025 report highlighted top crypto picks, with lending platforms such as Maple gaining attention. Ripple’s CEO, Brad Garlinghouse, suggested a potential “massive” opening of the U.S. market, possibly through an XRP ETF. Meanwhile, Ethereum’s focus on Layer 2 scaling solutions is drawing investor interest, though its ETF inflows still lag behind Bitcoin, which attracted $1 billion in just two weeks. The rise of AI-related blockchain projects has also spurred optimism, with several tokens gaining traction.

There was also a notable shift in market dynamics, with decentralized finance (DeFi) projects and Layer 2 solutions continuing to draw increasing attention from both investors and developers. The narrative surrounding Ethereum’s future was particularly focused on its scalability and transition to Ethereum 2.0, with optimism growing despite some regulatory headwinds. Additionally, the continued rise of AI-related blockchain projects fueled interest in the broader crypto ecosystem, with several tokens gaining traction amid buzz about their future potential.

In summary, it was a week of significant volatility and uncertainty in the crypto market, with fears of economic concerns surrounding the new U.S. tariffs, shifting regulatory landscapes, and evolving market trends have contributed to fluctuating prices. While Bitcoin has demonstrated resilience, the overall market remains highly sensitive to macroeconomic developments. Institutional interest continues to favour Bitcoin while Ethereum and other altcoins navigate unique challenges and opportunities.