Tag: Crude Oil

Current Market Performance vs. Predictions

In December 2025, many experts, commentators and analysts predicted that there would be an oversupply of crude oil in 2026, resulting in an oil glut caused by an increasing supply and weaker demand. Analysts suggested that the price of Brent Crude will average $58 bbl. At the time of writing, Brent crude futures traded up to $70 per bbl. for the first time since September 2025. Geopolitical tensions have helped bolster prices, with the global oil benchmark* rising by around 2.75%, while its US counterpart, West Texas Intermediate, climbed to just over $65 per barrel.

*Key Global Oil Benchmarks – The primary benchmarks are Brent Crude (North Sea), which covers 80% of global traded volume and West Texas Intermediate (WTI) (US), which is a key benchmark for the Americas. Dubai Crude is also used as a benchmark for Middle Eastern oil sent to Asia.

Impact of Geopolitical Escalations

The recent rise in crude oil prices has mostly been attributed to President Donald Trump, who threatened Iran with military action unless they agree to a nuclear arms agreement. Experts suggest that the threat issued via President Trump’s social media (Truth Social) yesterday evening, where he said that US ships had been ordered to the region and were ready to ”fulfil their mission with speed and violence, if necessary”, is responsible for the escalation in geopolitical premium of oil priced by potentially $3.00 – $4.00 per bbl.

Supply Disruptions and Global Conflict

Beyond the impact of geopolitical tensions on crude oil prices, the recent rise has also been driven by major supply disruptions in Kazakhstan. Prices were further supported last Friday after President Putin dampened hopes of a long-term settlement in the war with Ukraine. Experts advise that, despite the oversupply and lower prices that were predicted for this year, oil prices are expected to remain elevated for the time being as the markets wait for the next move by the White House and Iran. Analysts have reported that Tehran have stepped up negotiations with its OPEC+* counterparts and key Middle Eastern countries in an effort to stave off American aggression.

*OPEC+ – is short for the Organisation of the Petroleum Exporting Nations and is a coalition of 23 oil-producing countries, of which the full members are Algeria, Equatorial Guinea, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Republic of the Congo, Saudi Arabia, United Arab Emirates and Venezuela. There are a further 10 non-OPEC Partner Countries that form the OPEC+ and make up the DoC (Declaration of Cooperation), consisting of Azerbaijan, Bahrain, Brunei, Kazakhstan, Malaysia, Mexico, Oman, Russia, South Sudan and Sudan. The whole group’s modus operandi is to cooperate to influence the global oil market and stabilise prices.

Short-Term Outlook and Future Risks 

Experts advise that in the short-term (the next 4 to 6 weeks), based on technicals, the price of Brent Crude is estimated to trade within a range of $60 – 70 per bbl, with any movement being driven by geopolitical or inventory headlines. Despite a mid-range of analysts’ assessments of 2 – 3 million bbl per day, it is expected that today’s prices of crude oil will remain at the current level. Today, however, Iran has threatened to close the Straits of Hormuz, and analysts advise that this will definitely spike the price of oil and will no doubt, according to political and military experts, lead to military intervention from the United States.

For more than a decade, public debate surrounding energy has been defined almost entirely by the imperative of decarbonisation, ESG screens, and the political urgency of transitioning toward renewables. Governments, sovereign wealth funds, and large institutional capital allocators have been encouraged — and in many cases compelled — to shift funding away from hydrocarbons and toward solar, wind, hydrogen, and batteries. Yet the hard reality that continues to assert itself is simple: global societies remain overwhelmingly dependent on hydrocarbons, both as an energy source and as the irreplaceable feedstock for industrial production and logistics.

The much-maligned “Drill Baby Drill” policy position, shorthand for expanding domestic oil and gas extraction,  is often caricatured as outdated, environmentally negligent, or backwards-looking. But stripped of the politics, the logic of increased oil production remains compelling on economic, national security, and industrial grounds. For companies operating within the energy supply chain, traders, producers, refiners, and logistical operators, this reality is especially clear: hydrocarbons are not disappearing, the world is still short of energy, and the opportunity to fund and profit from oil transactions remains structurally significant for at least the next three decades.

At IntaCapital Swiss SA, we specialise in structured collateral financing, trade finance, and capital facilitation for legitimate, well-documented transaction flows — including oil trading, allocation funding, shipping, and production-linked financing. From our vantage point in the capital markets, the pro-production energy thesis is not ideological; it is grounded in commercial practicality and global macro conditions.

Oil Remains the Dominant Energy Source — And it Will For Decades

The starting point is empirical reality. Despite unprecedented investment into alternative energy, hydrocarbons still account for:

• Over 80% of the global primary energy supply
• Over 95% of transportation fuel
• Near 100% of aviation, maritime, and heavy machinery fuel

Even optimistic transition forecasts from major agencies — including the IEA, EIA, and OPEC — anticipate substantial oil demand well into 2050, driven largely by non-OECD population growth, shipping expansion, urbanisation, fertiliser needs, plastics, petrochemicals, lubricants, and synthetic materials.

The “energy transition” debate tends to assume that oil is primarily a motor-fuel problem. But one cannot build solar panels, wind turbine blades, semiconductors, medical polymers, or electric vehicle tyres without petroleum derivatives. Even renewables depend on hydrocarbons for extraction, smelting, transportation, composite manufacturing, and installation.

Oil is not just a fuel — it is a foundational industrial material.

Expanding Production Lowers Costs & Protects Consumers

The economics of energy supply are as straightforward as any other commodity market: when production lags consumption, prices rise. For the last decade, policy pressures and ESG capital restrictions have underfunded upstream development. As a result, reserves have not been replaced at the pace required to stabilise long-term pricing.

When oil supply is restricted, the effects cascade across the economy:

• Transport costs increase
• Logistics and freight inflate
• Food becomes more expensive
• Manufacturing input costs rise
• Consumer goods absorb energy-linked price increases
• Governments face inflationary pressures

Discipline in upstream investment may be popular with shareholders seeking dividend yield and with activists focused on decarbonisation, but it is economically regressive. The households most impacted by expensive energy are not the wealthy; they are lower-income consumers for whom fuel and food expenditures represent a larger share of disposable income.

Expanding production through offshore platforms, shale development, onshore drilling campaigns, and improved refineries throughout has the opposite effect: downward pressure on prices, improved logistics competitiveness, and reduced inflationary strain throughout the economy. In macro-economic terms, an expanded hydrocarbon supply is profoundly pro-consumer.

Energy Security Cannot Be Outsourced

Perhaps the most powerful argument for expanding domestic oil production is geopolitical. Nations that rely on imported energy — particularly from adversarial or unstable regions — incur strategic vulnerabilities. Europe learnt this lesson twice in modern history: first with the geopolitical leverage of Russian natural gas, and more recently with global LNG and diesel supply constraints.

Energy is strategic sovereignty. If a nation cannot feed, fuel, and defend itself without foreign supply chains, it does not control its own outcomes. For this reason, countries including the United States, Saudi Arabia, UAE, Qatar, Brazil, Angola, and Canada are increasingly expanding their upstream capacity despite public climate rhetoric. The “Drill Baby Drill” position — when recast in strategic language — simply states: Domestic energy production equals national security.

From an investor and lender standpoint, energy security translates into long-duration capital commitments, infrastructure build-out, and predictable export revenue streams. These are precisely the conditions under which private corporate funding, trade finance, and structured collateral facilities thrive.

Oil Revenues Fund the Transition — Not the Other Way Around

Another uncomfortable truth: every successful renewable transition in history has been funded by fossil fuel prosperity. Nations that possess hydrocarbons — particularly Saudi Arabia, UAE, Norway, and the United States — are not abandoning fossil fuels. They are monetising them to accelerate modernisation, diversification, and future energy integration.

The slogan could be inverted as: Drill Baby Drill = Finance Baby Finance. It is not oil vs renewables; it is oil funding renewables. When oil is scarce and expensive, consumer acceptance of energy transition weakens, and governments lose the fiscal room to subsidise innovation. When oil is abundant and competitively priced, governments can directly channel cash flow into infrastructure, EV charging networks, nuclear modularity, and battery chemistry R&D. The global transition requires capital, and hydrocarbons remain the financial engine that provides it.

Market Liquidity in Oil Trade Creates Funding Opportunity

For firms like IntaCapital Swiss SA, the significance of expanded oil production is not merely theoretical; it directly influences transaction demand. The global oil and refined products sector is characterised by:

• High-value spot and forward trades
• Allocation-based offtake agreements
• Refinery output contracts
• Shipping and storage operations
• Letters of credit utilisation
• Collateralised performance obligations
• Intermediated allocation structures

Where barrels are moving, there is demand for:

1. Allocation funding
2. Performance bonds
3. Trade finance lines
4. Collateral transfer facilities
5. Warehouse & shipping finance
6. Refinery output pre-financing
7. Syndicated export structures
8. Commodity-backed funding instruments

Historically, energy traders and allocation holders have faced funding gaps due to collateral requirements, KYC/AML scrutiny, or misalignment between banking risk appetites and commodity settlement cycles. Structured private capital has filled that gap — and continues to do so globally. Expansion in upstream production directly increases this flow, creating a larger universe of transactions requiring structured funding and credit enhancement.

Why ESG Capital Boycotts Created a Funding Vacuum

Over the last five years, major banks and sovereign funds adopted stringent ESG restrictions on hydrocarbon investments. While politically fashionable, this capital withdrawal has created a financing scarcity that private lenders, hedge funds, commodity houses, and structured intermediaries are now exploiting.

The irony is unavoidable:

• Oil demand increases
• Oil supply is constrained
• Capital is restricted from upstream investment
• Price volatility rises
• Private capital steps in at a premium

Far from eliminating oil, ESG has made oil more profitable for those willing to fund it. For financing firms who understand the sector, this environment has created attractive margins, strong collateralisation structures, and heightened demand from credible counterparties seeking allocation funding or offtake financing.

The Global South Will Drive Oil Demand, Not the West

Another misconception often embedded in Western policy discourse is the assumption that energy demand patterns are uniform across the globe. They are not. Over the next 25 years, population growth and middle-class expansion in Africa, South Asia, Southeast Asia, and the Middle East will drive incremental consumption of:

• Diesel
• Jet fuel
• Marine bunker fuel
• Chemicals and plastics
• Fertilisers
• Asphalt
• Petrochemicals

Even if OECD nations reach aggressive EV penetration and renewable diversification targets, the Global South is only beginning its industrial build-out. This difference is not ideological; it is demographic and developmental. The global oil industry will therefore not contract — it will re-centre.

Conclusion: Expanded Oil Production Is Rational, Beneficial & Bankable

The “Drill Baby Drill” energy thesis is not a relic of the past. It is an economically rational, strategically necessary, industrially indispensable, and financially attractive proposition anchored in material demand. The global economy still runs on hydrocarbons, and it will continue to do so for decades. Transition will occur — but it will not eliminate the need for oil; it will simply change the demand profile.

For companies involved in the sector — from upstream production to trading, refining, shipping, allocation management and distribution — the implication is clear: the real bottleneck is not rhetoric, it is capital.

Funding Oil Transactions — IntaCapital Swiss SA

IntaCapital Swiss SA facilitates structured financing for credible oil and refined product transactions globally. We support:

• Allocation funding
• Performance bonding & collateral transfer
• Refinery & pre-export financing
• Offtake funding
• Collateral-enhanced trade finance structures

Applicants seeking oil transaction funding, allocation financing, or credit enhancement are invited to present their proposal for review, including:

• Allocation or supply documentation
• ICPO, SPA, or equivalent
• Transaction flow structure
• Counterparty details
• Required financial instruments or facilities

To discuss funding options in confidence, contact our transaction structuring team.