Global Oil Trade in Focus as Exports, Tariffs, and Rig Counts Shift

Crude markets opened the day modestly higher, with prompt futures trading up around 35 cents per barrel. Activity in global crude flows continues, with two vessels unloading roughly 2.5 million barrels of Venezuela's crude into storage tanks in Saint Lucia and Curaçao, locations that are commonly staging hubs for international exports. Meanwhile, Iraq is expected to export 223,000 barrels per day of crude in February, a 21% increase from the previous month.

Refined product movements also drew attention. Ultra-low sulfur diesel exports from Russia's Primorsk port may rise by about one-third in January compared with December, supported by higher refinery output and seasonally weaker domestic demand. Meanwhile, Libya's Oil Crescent ports, which have been exporting more than 500,000 barrels per day in recent months, have temporarily suspended operations due to adverse weather conditions.

Geopolitical developments extended beyond energy markets. Donald Trump suggested imposing a 200% tariff on French wine and champagne after French President Emmanuel Macron declined an invitation to join Trump's proposed Board of Peace. Broader markets reacted later in the session, with S&P 500 futures trading down more than 1.5% after Trump announced an additional 10% tariff starting February 1 on eight European nations, tied to negotiations over U.S. purchases involving Greenland.

Beyond energy, new data highlighted continued momentum in artificial intelligence adoption. As of January 2026, AI adoption among U.S. establishments reached 17.7%, according to the Census Bureau's Business Trends and Outlook Survey. Analysts expect strong revenue growth in semiconductor firms, with projections calling for 41% growth by the end of 2026. Since the release of ChatGPT in late 2022, revenue forecasts for semiconductors have increased by $377 billion, while projections for AI hardware enablers have risen by $160 billion. Academic studies cited average productivity gains of 24% where generative AI has been deployed, while company anecdotes suggest efficiency improvements closer to 32%.

U.S. economic data also came in stronger than expected. Industrial production increased by 0.4% in December, exceeding forecasts, while manufacturing output rose despite expectations for a decline.

Positioning data showed increased activity among managed money participants. Crude oil net length rose by 95.7 thousand lots through last Tuesday. WTI net length increased by 23 thousand lots, driven by higher long positions alongside a smaller increase in shorts. Brent net length rose by 72.7 thousand lots, supported by higher long positions and a reduction in short positions. In products, NYMEX heating oil net length declined by 5.9 thousand lots, while NYMEX gasoline net length increased by 8.3 thousand lots.

Rig counts moved modestly higher in North America. The U.S. crude oil net rig count increased by one rig to 410 for the week ending January 16, with activity rising in the Eagle Ford basin. U.S. oil rigs are up four rigs month-over-month but remain 68 rigs lower than a year ago. In Canada, the crude oil net rig count rose by 22 rigs to 150, with increases across multiple basins, including East Central Alberta, Central Saskatchewan, and Eastern Saskatchewan. Canadian oil rigs are up 31 rigs month-over-month and down six rigs year-over-year.

Separately, Reuters reported that Russia's oil and gas budget revenues are expected to fall 46% year over year in January, totaling an estimated 420 billion rubles, or about $5.42 billion. The decline reflects lower international oil prices and a stronger ruble, which gained more than 30% from a year earlier. Oil and gas contribute roughly 25% of Russia's federal budget revenues. Despite multiple rounds of EU and U.S. sanctions, Russia's oil exports to India remained above 1 million barrels per day in December, exceeding prior expectations.

In the United States, the Energy Department said it is not currently considering using Venezuelan oil to refill the Strategic Petroleum Reserve. Officials denied reports suggesting an exchange involving Venezuelan crude and U.S.-produced oil. The SPR currently holds about 414 million barrels, or roughly 60% of its total capacity. While President Trump pledged to refill the reserve during his second term, funding constraints and maintenance needs have limited progress, with $171 million allocated last year for purchases and upkeep.