U.S. Lifts Belarus Potash Sanctions, Adding New Uncertainty for Fertilizer Markets
Mexico commits to repay water deficit under 1944 treaty | Farm policy/program updates
Link: Video: Wiesemeyer’s Perspectives, Dec. 13
Link: Audio: Wiesemeyer’s Perspectives, Dec. 13
Today’s Updates:
TOP STORIES
— Mexico commits to repay water deficit under 1944 treaty
Initial deliveries of 202,000 acre-feet set to begin the week of Dec. 15 as talks continue toward a broader repayment plan by Jan. 31, 2026.
— U.S. lifts Belarus potash sanctions, adding new uncertainty for fertilizer markets
Sanctions relief could eventually pressure global potash prices and affect U.S. input costs, though EU transit barriers may limit near-term impact.
— JBS to shut Riverside, California beef plant, cutting 374 jobs
Closure reflects industry restructuring amid tight cattle supplies and record beef prices, with production shifting to other facilities.
— HSAs take center stage as House Republicans revisit the Affordable Care Act
GOP leaders emphasize Health Savings Accounts over extending ACA premium subsidies as healthcare debates intensify.
FINANCIAL MARKETS
— Equities fall Friday, mixed for the week
Stocks ended lower on Friday, with weekly performance mixed across major indices.
AG MARKETS
— U.S. pork exports hold firm as Mexico sets value record; beef shipments sink to five-year low
September data show resilient pork demand led by Mexico, while beef exports slump amid stalled access to China.
— Agriculture markets slip Friday, mixed weekly performance
Grains and oilseeds ended lower on the day, with cattle higher on the week and hogs posting gains.
FARM POLICY
Farm aid, SDRP concerns, and producer pressures mount
Questions persist over disaster payments, prevent-plant changes, specialty crop support, and the adequacy of new farmer aid.
— Midwest Dry Bean Coalition presses case in Washington fly-in
Producers highlight severe financial stress, high stocks, stalled exports, and push for purchases, exports, and nutrition recognition.
ENERGY MARKETS & POLICY
— Oil slides on oversupply fears despite geopolitical tensions
Crude prices post steep weekly losses as global supply outlook overwhelms geopolitical risks.
TRADE POLICY
— EU nears make-or-break vote on Mercosur trade pact
Member states prepare for an early-week decision amid farmer opposition and geopolitical stakes.
WEATHER
— NWS outlook highlights West warmth, eastern cold, and snow threats
Record warmth in the West contrasts with expanding arctic air and snow from the Plains to the Northeast.
Updates: Policy/News/Markets, Dec. 13, 2025
—Mexico commits to repay water deficit under 1944 treatyAgreement aims to ease shortages for South Texas farmers, with initial deliveries set to begin mid-DecemberThe United States and Mexico have reached an understanding for Mexico to meet its outstanding water delivery obligations to U.S. farmers and ranchers under the 1944 Water Treaty, covering both the current five-year cycle and deficits carried over from the previous cycle. Under the agreement, Mexico will release 202,000 acre-feet of water to the United States, with deliveries expected to begin the week of Dec. 15, 2025. The two governments are negotiating a broader plan to repay the remaining deficit, with the goal of finalizing it by Jan. 31, 2026. U.S. officials framed the deal as a significant step toward restoring certainty for producers in South Texas, who have faced severe water shortages from repeated shortfalls in treaty deliveries. USDA Secretary Brooke Rollins said the agreement reflects the administration’s push to enforce treaty commitments, while warning that the United States reserves the right to impose 5% tariffs on Mexican products if violations continue. Deputy Secretary of State Christopher Landau emphasized President Trump’s direct involvement in securing the agreement and described it as a tangible win for Texas communities affected by water scarcity. The 1944 Water Treaty requires Mexico to deliver 1.75 million acre-feet of water over five years to the United States from the Rio Grande, while the U.S. delivers 1.5 million acre-feet to Mexico from the Colorado River. Persistent Mexican shortfalls have strained agriculture and local economies in the Rio Grande Valley. In a joint communiqué, both countries reaffirmed the importance of treaty compliance, pledged closer engagement through the International Boundary and Water Commission (IBWC/CILA), and acknowledged that each nation retains the right to act sovereignly in cases of noncompliance, consistent with international obligations. Mexico’s Foreign Ministry assured that Mexico has not violated any provisions of the water treaty. “In a period marked by an extraordinary and unprecedented drought that has affected users in both countries, Mexico has made additional deliveries, always within the framework of the Treaty, the hydrological availability and the operational and infrastructure limits of the region, without affecting water for human consumption and agricultural production on the border,” he stated. He also emphasized that the actions undertaken during the last year show that Mexico is complying with the actual availability of the resource , without affecting the human right to water and food production, and “will continue to do so within the framework of the Treaty and binational cooperation.” “The Mexican government reiterates its willingness to collaborate constructively with the United States administration without affecting the interests of its people and nation, to ensure a mutually beneficial implementation in accordance with the stipulations of the Treaty, recognizing that this is a shared challenge.” The distribution corresponds to Mexico two-thirds of the tributaries of the Conchos, San Diego, San Rodrigo, Escondido and Salado Rivers , as well as the Arroyo de las Vacas, and the United States one-third of those same Rivers in the Bravo or Grande basin. —U.S. lifts Belarus potash sanctions, adding new uncertainty for fertilizer marketsMove could pressure global potash prices and lower input costs for U.S. farmers, but logistical and EU barriers may limit near-term impactThe Trump administration has moved to lift U.S. sanctions on Belarusian potash fertilizer, a step that could eventually reshape global fertilizer supply and pricing — with potentially meaningful implications for U.S. farmers’ input costs. According to statements carried by Belarus’s state news agency Belta, President Donald Trump ordered the sanctions lifted effective immediately, as part of a broader effort to normalize relations with Belarus. Special envoy John Coale said additional restrictions could be eased over time, possibly leading to a full removal of U.S. sanctions if relations continue to improve. Of note: The U.S. presidential envoy announced the lifting of sanctions on Belarusian potash fertilizers. In return, Aliaksandr Lukashenka released a large group of political prisoners, including Nobel Peace Prize laureate Ales Bialiatski and one of the opposition leaders Maria Kolesnikova. Why it matters for U.S. farmers. Potash is a critical nutrient for corn, soybeans, wheat and many specialty crops, and fertilizer costs remain a key pressure point for U.S. producers heading into the 2026 planting season. Belarus is one of the world’s largest potash suppliers, alongside Russia’s Uralkali and North American producers Nutrien and Mosaic. According to the National Statistical Committee, before the 2020 crisis, Belarus earned $2.4 billion from potash fertilizer exports, accounting for about 8% of total Belarusian exports and about 4% of the country’s GDP. If Belarusian potash meaningfully re-enters global markets, the added supply could:• Put downward pressure on global potash prices, potentially easing fertilizer bills for U.S. growers over time• Increase competition for North American producers, which could affect pricing strategies and margins at firms that dominate U.S. supply• Reduce some volatility in fertilizer markets, especially if shipments diversify away from Russia-only routing That said, the immediate impact for U.S. farmers may be limited. European Union sanctions remain in place, blocking Belarusian potash from transiting through Lithuania to the Baltic port of Klaipeda — historically Belarus’s main export route. Without EU relief, Belarus is likely to continue routing exports through Russia, constraining volumes and keeping logistics costly. Broader market implications. Belarusian potash has been largely absent from Western markets since 2021, when sanctions were imposed following political repression and Belarus’s support for Russia’s invasion of Ukraine. Since then, Belarus has redirected sales through Russia, deepening its economic dependence on Moscow. From a farm-sector perspective, the key question is how much supply returns to global markets and how quickly. If U.S. sanctions relief is eventually matched by EU action, analysts would expect more pronounced price pressure — a scenario that would be welcomed by farmers but watched closely by U.S. fertilizer producers. For now, the announcement adds another variable to an already complex fertilizer outlook, as growers weigh global geopolitics, trade policy, and input costs ahead of 2026 crop decisions.—JBS to shut Riverside, California beef plant, cutting 374 jobsWorld’s largest meatpacker cites strategic restructuring amid tight U.S. cattle supplies and record beef prices as production shifts to other facilitiesJBS announced it will permanently close its Swift Beef Company beef preparation facility in Riverside, Calif., on Feb. 2, 2026, affecting 374 employees. The Riverside plant, which processes beef for retail sale in grocery stores but does not slaughter cattle, will cease operations and production will be shifted to other JBS facilities.The closure comes against a backdrop of tight U.S. cattle supplies and record-high beef prices, stemming from a shrinking U.S. cattle herd due to persistent drought conditions and restrictions on Mexican cattle imports. These supply pressures have raised costs for meatpackers nationwide.JBS characterized the shutdown as part of a strategic initiative to streamline its “value-added and case-ready business” and simplify operations across its network, rather than a direct result of cattle shortages. The company said it remains focused on maintaining service quality while adjusting to evolving market demands, and will offer affected workers the opportunity to transfer to other JBS locations where possible.The plant’s closure follows broader industry consolidation trends: Rival Tyson Foods is also winding down a larger slaughter facility in Nebraska, and other processors have idled shifts or reduced hours. Collectively, the moves suggest the industry is planning for several more years of constrained cattle availability, not a quick rebound.Impacts to watch:•Local employment: 374 jobs eliminated, with relocation or transfer options offered but community labor impacts likely significant.• Beef supply chain: While JBS emphasizes production continuity, tighter cattle supplies and reduced processing capacity could contribute to price volatility in beef markets.• Policy focus: Beef price inflation and supply constraints may draw increased scrutiny from policymakers focused on food affordability and agricultural resilience. Political and policy backdrop. The move is also likely to draw attention in Washington and Sacramento, where beef prices and food inflation remain politically sensitive. California officials are expected to scrutinize the job impacts, while farm-state lawmakers may point to the closure as further evidence of stress in the U.S. protein supply chain. Bottom Line: JBS’s Riverside shutdown is less about California specifically and more about an industry recalibrating to scarce cattle, shifting demand, and a longer-than-expected recovery timeline. For producers, processors and policymakers alike, it’s another reminder that the cattle cycle is still very much in its tight phase — and relief may not come quickly. —HSAs take center stage as House Republicans revisit the Affordable Care ActHealth Savings Accounts emerge as a GOP alternative to extending ObamaCare premium subsidies Health Savings Accounts, or HSAs, have become a focal point in House Republican healthcare efforts as lawmakers debate what to do about the Affordable Care Act (ACA) and the looming expiration of enhanced premium subsidies. Rather than extending those subsidies, GOP leaders are emphasizing HSAs to lower costs and shift more control to consumers. An HSA is a tax-advantaged savings account that individuals can use to pay for qualified medical expenses. To contribute, a person must be enrolled in a high-deductible health plan (HDHP). HSAs are often described as having a “triple tax advantage”: contributions are tax-deductible or pre-tax, investment earnings grow tax-free, and withdrawals are not taxed when used for eligible medical costs. Funds in an HSA can be used for a wide range of expenses, including doctor visits, hospital care, prescription drugs, dental and vision services, and certain over-the-counter items. Unlike flexible spending accounts, HSA balances roll over from year to year and remain with the account holder even if they change jobs, making them function more like long-term savings vehicles. House Republican leaders argue that expanding HSAs would encourage price sensitivity, reduce federal spending, and give individuals more responsibility over their health-care decisions. In current proposals, HSAs are positioned as an alternative to extending ACA premium tax credits that have helped keep monthly insurance premiums low for millions of Americans since 2021. Critics, including many Democrats and some health policy analysts, counter that HSAs tend to benefit higher-income households, since participation requires disposable income to save and enrollment in high-deductible plans. They argue that HSAs do little to help lower-income families facing immediate premium hikes if ACA subsidies expire. The contrast highlights a central divide in the ACA debate: premium subsidies directly reduce the cost of insurance, particularly for low- and middle-income enrollees, while HSAs focus on managing out-of-pocket costs and rewarding those who can afford to save. As Congress approaches year-end deadlines, that philosophical split is shaping the direction of Republican health-care strategy — and the future affordability of coverage for millions of Americans. Of note: A meaningful share of U.S. farmers and farm families rely on ACA marketplace coverage, especially those who are self-employed, operate smaller farms, or farm full-time without off-farm jobs that provide insurance. But it’s not uniform across agriculture. |
| FINANCIAL MARKETS |
— Equities yesterday and weekly change:
| Equity Index | Closing Price Dec. 12 | Point Difference from Dec. 11 | % Difference from Dec. 11 | Weekly Change |
| Dow | 48,458.05 | -245.96 | 0.51% | +1.05% |
| Nasdaq | 23,195.17 | -398.69 | -1.69% | -1.62% |
| S&P 500 | 6,827.41 | -73.59 | 1.07% | -0.63% |
— Brazil concludes BRICS presidency with push for tangible results
Foreign Minister Mauro Vieira says the expanded bloc must move beyond dialogue to deliver concrete benefits for citizens
Brazil formally wrapped up its rotating presidency of BRICS on Dec. 12 with a meeting in Brasília chaired by Foreign Minister Mauro Vieira, who used the occasion to argue that the enlarged 11-member group must focus on producing visible, real-world outcomes rather than serving only as a forum for state-to-state dialogue.
Vieira said cooperation within BRICS has evolved well beyond its original emphasis on political coordination and financial ties, reflecting the bloc’s broader ambitions. Looking ahead, he stressed that BRICS should be judged by its ability to deliver concrete gains that affect daily life across member countries, positioning the group as an actor capable of driving meaningful change rather than simply facilitating discussion.
Brazil’s sherpa to BRICS, Ambassador Mauricio Lyrio, echoed that message as the final round of meetings began on Dec. 11. Lyrio described Brazil’s term as a strong defense of multilateral cooperation at a time of growing global fragmentation and mistrust, noting that such conditions have made collective action more difficult but also more necessary.
Lyrio also highlighted the leaders’ declaration adopted at the July summit in Rio de Janeiro, which condemned armed conflicts, called for fairer and more inclusive global governance, and renewed demands for reform of the United Nations Security Council.
Brazil’s presidency was marked by an intensive schedule, including 220 videoconferences, 62 technical meetings, 21 ministerial sessions, four sherpa meetings, an in-person leaders’ summit in Rio, and an additional virtual summit — underscoring the bloc’s growing scope and institutional activity.
| AG MARKETS |
— U.S. pork exports hold firm as Mexico Sets Value Record; Beef Shipments Sink to Five-Year Low
September USDA data show resilience in U.S. pork demand despite China headwinds, while beef exports slump amid stalled access to the Chinese market
U.S. pork exports posted a relatively steady performance in September, supported by record value shipments to Mexico, while beef exports fell to their lowest level since mid-2020, according to newly released USDA data compiled by the U.S. Meat Export Federation (USMEF). The September figures were delayed due to the recent federal government shutdown.
USMEF said pork exports totaled 233,816 metric tons (mt) in September, down 2% from a year earlier, while export value held steady at $683.9 million. Mexico was the standout market, delivering the highest monthly pork export value on record, at nearly $260 million. Muscle cut exports rose modestly to $586.2 million, up 1%, while variety meat exports declined, largely reflecting China’s retaliatory tariffs. Excluding China, September pork and variety meat exports were 4% higher than a year ago.
“Global demand for U.S. pork remains robust and resilient, especially in Mexico but also across a broad range of markets,” said Dan Halstrom, president and CEO of USMEF. He contrasted that strength with the situation facing beef exporters, which he described as “much more challenging” due to China’s continued restrictions on U.S. beef.
For the January–September period, pork exports totaled 2.16 million mt, down 3% from the record pace of 2024, with export value also down 3% to $6.16 billion. When China is excluded, year-to-date pork exports were down just 1%. Exports to Mexico have already surpassed $2 billion in value in 2025, while Central America is also on track for a record year. Shipments were higher year-over-year to Colombia, the Caribbean, Hong Kong and Vietnam.
In contrast, September beef exports fell sharply to 80,835 mt, down 22% from a year earlier and the lowest monthly total since June 2020. Export value dropped an equal 22% to $660.9 million, the weakest since February 2021. Even excluding China, beef export volume declined 11%, reflecting both reduced production and softer demand in key Asian markets.
Through the first nine months of the year, beef exports totaled 856,023 mt, down 11% year-over-year, with export value falling 10% to $7.03 billion. Gains in South Korea and select markets in Central and South America, the Caribbean, Africa and Southeast Asia were outweighed by steep declines to China and reduced shipments to Japan, Mexico, Canada and Taiwan.
Halstrom said industry losses tied to the China impasse “continue to mount,” pointing to Beijing’s failure to meet its commitments under the U.S./China Phase One Agreement. The Office of the U.S. Trade Representative (USTR) is currently conducting a Section 301 investigation into China’s compliance with the agreement, with a public hearing scheduled for Dec. 16. USMEF has submitted comments outlining China’s shortcomings on red meat market access.
U.S. lamb exports showed modest improvement in September, with muscle cut exports totaling 130 mt, up 67% from a year earlier but still the lowest monthly volume of 2025. Export value rose 64% to $807,000, also the weakest since last September. For January–September, lamb exports increased 47% to 2,179 mt, valued at $11.7 million, led by stronger demand from Mexico, the Caribbean and Canada.
— Agriculture markets yesterday and weekly change:
| Commodity | Contract Month | Close Dec. 12 | Change vs Dec. 11 | Weekly Change |
| Corn | March | $4.40 3/4 | -5 3/4¢ | -4¢ |
| Soybeans | January | $10.76 3/4 | -16 3/4¢ | -29 1/4¢ |
| Soybean Meal | January | $302.50 | +$0.40 | -$4.90 |
| Soybean Oil | January | 50.07¢ | -75 pts | -162 pts |
| Wheat (SRW) | March | $5.29 1/4 | -4 1/4¢ | -7 1/4¢ |
| Wheat (HRW) | March | $5.18 | -4 1/4¢ | -13 1/4¢ |
| Spring Wheat | March | $5.75 3/4 | -1/2¢ | +2 3/4¢ |
| Cotton | March | 63.83¢ | -14 pts | -10 pts |
| Live Cattle | February | $229.55 | -$1.40 | +$2.40 |
| Feeder Cattle | January | $339.10 | -$4.30 | +$0.05 |
| Lean Hogs | February | $84.525 | +$0.35 | +$2.25 |
| FARM POLICY |
— Key farm program info and perspective:
• There will very likely be a top up payment for both SDRP Stage 1 and Stage 2 of 30% to 35% but it will not come until after the April 30 signup deadline for Stage 2.
• Some county FSA offices still not paying SDRP payments. Here is an email I received: “I am in Jasper County Missouri, and we have not received ours. We have visited with our local FSA personnel, and they tell us the money is approved and setting in an account, but it’s not being released. We know several of the other farmers in our area have not received their payment either. Any help you could provide on this matter would be greatly appreciated.” I am passing along this and other information to USDA, which has helped in other cases.
• Stage 2 SDRP Enrollment advances as prevent plant rule draws sharp opposition. Producers are being urged to comment by Jan. 27 amid concerns over payment calculations and loss of buy-up coverage. Sign-up for Stage 2 of the Supplemental Disaster Relief Program (SDRP) is ongoing, with enrollment open through April 30, 2026. Stage 2 builds on Stage 1 by targeting “shallow losses” not covered by crop insurance, as well as quality losses incurred in calendar years 2023 and 2024. As applications move forward, producers and farm groups are raising significant concerns about USDA’s decision not to incorporate the RMA Fall Price into Stage 2 payment calculations. That change marks a clear departure from Stage 1, which aligned revenue-loss coverage with producers’ underlying crop insurance policies. The omission has led to substantially reduced payments — and in some cases no payments at all — for many producers. Stakeholders say they are actively engaging USDA and Capitol Hill to address the issue. At the same time, alarm is growing over proposed changes to Prevented Planting (PP), specifically the elimination of the +5% buy-up coverage. Farm groups warn the move would significantly weaken risk protection and impose real financial harm on farm and ranch families nationwide. Producers and organizations are being strongly encouraged to submit formal comments opposing the Prevent Plant changes. While stakeholders are pursuing both legislative and administrative fixes, administrative action would not take effect until after June, leaving the regulation in force during the critical interim period. As a result, advocates say a legislative solution is the preferred path to prevent near-term harm.
• USDA is getting a lot of questions about why sugar is included in specialty crops. USDA analysis shows sugar producers losing lots of money, with many sugar beet growers losing $300 to $400 an acre, with some beginning producers losing $700 to $800 an acre.
• Specialty crop producers, farm-state lawmakers and lobbyists agree on one thing: The $1 billion held back in farmer bridge assistance will not be nearly enough for the sector. Both the Trump administration and/or Congress will have to respond eventually.
• Soybean growers worry that the recent downturn in bean prices will not be adequately reflected in the coming payment rate for the farmer bridge assistance (FBA) program.
• Prevent-plant acres are NOT included in 2025 acres paid under the FBA.
• Some farmers continue to say their FSA offices are understaffed and worry that coming payment will be delayed.
• The FBA payments are funded by USDA tapping the Commodity Credit Corporation (CCC) and do not come from trade tariff funds, despite President Donald Trump saying so during this week’s farmer aid roundtable.
• Some farmers fret that consistent multibillion-dollar economic and disaster aid is conditioning the U.S. farm sector for counting on such aid ahead. Some farmers fear a potential Washington policy backlash as other groups ask the White House why their sector is not being aided, despite similar price and trade share downturns.
• The $10 billion FBA aid for row-crop producers is a lot of money but falls well short of the funding level others pushed for within the Trump administration ($20 billion). And even a higher funding level would not come close to making farmers whole, which should never be a goal of any government program.
• Trump administration analysis shows economic losses of farmers for just major crops total around $46 billion.
• Trump administration official says to ask Democrats who complain about the FBA program what they would do and if it is trade, why Biden did not get one new trade agreement during his administration. If it is farmer aid, how much and where the funding would come from.
• Congressional farmer aid push ahead. House Ag Chairman GT Thompson (R-Pa.) confirmed what many thought was likely later this year into January 2026 — that farm-state lawmakers would push for a $10 billion or more additional farmer aid package as part of a must-have spending measure. But some conservative Republicans are already baling at such a maneuver, which means Thompson and other farm-state lawmakers will likely need support from some Democrats.
• Clearly a big Trump administration mistake was the multibillion bond swap offer to Argentina, which was followed by that country getting rid of its export taxes and China quickly buying $7 billion worth of Argentine soybeans, right during the timeslot China was expected to purchase U.S. soybeans. The issue shows how geopolitics sometimes gets involved with farm policy because President Trump and others in his administration wanted to improve the odds that Argentine President Javier Gerardo Milei would win his-re-election, which he did. U.S. financial support appears to have played a significant political role. Recall that the U.S. arranged a large financial support package. In October 2025, the U.S. agreed to a $20 billion currency swap with Argentina to help stabilize the peso and shore up reserves amid sharp market volatility. The timing of U.S. support — including the swap and backing from Trump — helped bolster investor confidence and give a political lifeline before the vote, which likely improved Milei’s political position going into the election. Several sources characterize the U.S. intervention as not just economic but politically consequential — with Trump’s endorsement and conditional aid seen as aimed at helping Milei and his coalition retain power.
• Midwest Dry Bean Coalition (MDBC) takes farm concerns to Washington; fly-in highlights financial stress, calls for commodity purchases, export momentum, and nutrition recognition. Members of the Midwest Dry Bean Coalition (MDBC) traveled to Washington, D.C., this week for a three-day fly-in aimed at pressing lawmakers, congressional staff, and Trump administration officials on the growing economic strain facing the dry edible bean sector. Representing farm families, processors, dealers, and factory workers across the Midwest, coalition members underscored the severe financial pressures confronting producers, driven by depressed prices, elevated input costs, stalled export demand, mounting per-acre losses, and historically high stocks-to-use ratios that continue to weigh on the market. During meetings, MDBC participants urged policymakers to pursue meaningful relief measures, including increased government purchases to move excess supplies, initiatives to boost domestic consumption, and actions to restart and expand export opportunities. The coalition also emphasized the nutritional value of dry edible beans, calling for their proper recognition and prioritization in forthcoming federal Dietary Guidelines, arguing that stronger policy alignment could support both public health goals and market demand for U.S.-grown beans.
Of note: Dry bean producers are suffering around $175 per acre losses, with 50% stocks-to-use ratio. Farmers are sitting on two years of crops. No contracts. Nothing moving. Brazil reportedly has taken advantage of U.S. and China situation to steel 15% of U.S. market in Mexico, along with Argentina. Favorable currency, freight, etc. Meanwhile, Mexico is trying to augment its production by 30% in six years. Sources say this is ripe for consideration in USMCA renewal and Brazil Section 301 case.
| ENERGY MARKETS & POLICY |
— Friday: Oil slides on oversupply fears despite geopolitical tensions
Crude benchmarks post steepest weekly losses in months as supply glut and peace prospects dominate market sentiment
Oil prices ended lower on Friday, capping a weekly decline of roughly 4% as persistent oversupply concerns and expectations of a possible Russia-Ukraine peace agreement continued to outweigh geopolitical risks. Brent crude settled at $61.12 a barrel, down 16 cents, while U.S. West Texas Intermediate closed at $57.44, also down 16 cents. Both benchmarks had already fallen about 1.5% on Thursday, marking their sharpest weekly drops in several months.
Market sentiment remains firmly anchored to supply-side pressures. Traders are increasingly focused on forecasts showing global oil production outpacing demand well into next year, limiting the market’s responsiveness to isolated geopolitical disruptions. Even the recent U.S. seizure of a sanctioned oil tanker near Venezuela failed to lift prices, as participants judged the move unlikely to meaningfully tighten supplies in an already well-stocked market.
New outlooks released this week reinforced the bearish tone. One forecast projects global oil supply exceeding demand by nearly 3.8 million barrels per day next year — close to 4% of total global consumption — while another sees supply and demand roughly balanced in 2026. Despite differing assumptions, both scenarios suggest limited upside for crude prices in the near term.
Geopolitical risks remain in the background. Rising U.S.–Venezuela tensions and ongoing Ukrainian drone strikes on Russian energy infrastructure, including a recent hit on a Caspian Sea oil platform, continue to pose potential supply risks. So far, however, those factors have not been enough to counter the dominant narrative of excess supply.
Adding to that view, Russian seaborne oil product exports fell only modestly in November. The completion of refinery maintenance helped offset weaker flows from southern export routes such as the Black Sea and Azov Sea, underscoring the resilience of global supply and keeping downward pressure on crude prices as the market heads into year-end.
| TRADE POLICY |
— EU nears make-or-break vote on Mercosur trade pact
Member states set for early week decision as farm concerns clash with geopolitical and market-access goals
European Union countries are poised to vote early this coming week on whether to approve the long-negotiated EU/Mercosur trade agreement, a decision that would clear the way for the bloc to sign its largest-ever trade deal by year’s end, Denmark said Friday.
The pact — reached in principle last December after 25 years of talks — would link the EU with Argentina, Brazil, Paraguay and Uruguay. But it remains deeply divisive, with France and several other countries warning that increased imports of agricultural products could undercut European farmers.
Of note: Denmark, which holds the EU’s rotating presidency, said the vote is planned to allow European Commission President Ursula von der Leyen to travel to Brazil and sign the agreement on December 20. Approval requires a qualified majority: at least 15 EU countries representing 65% of the bloc’s population.
Supporters include Germany, Spain and the Nordic countries. Poland has said it will oppose the deal, while France and Italy have yet to clarify their positions. If those three, plus one additional country, vote against or abstain, the agreement would fail.
To address farm sector opposition — especially around beef, poultry and sugar — the European Commission has proposed a safeguard mechanism allowing the EU to suspend preferential Mercosur access for sensitive agricultural products if imports surge.
Backers argue the agreement is strategically critical, offering major tariff reductions, new export markets, and improved access to raw materials and critical minerals as the EU seeks to diversify supply chains amid U.S. tariffs and Chinese export controls.
Some EU diplomats say France pushed to delay the vote into January, but momentum now appears decisive. “If we don’t sign Mercosur in the next days it will be dead,” one diplomat said, calling the outcome a test of Europe’s geopolitical relevance.
| WEATHER |
— NWS outlook: Record warmth for much of the West this weekend, while arctic air expands over eastern half of the country… …Swath of snow to spread from Northern Plains to Midwest today, then Central Appalachians to Mid-Atlantic/Northeast Coast tonight… …Lake effect snow returns this weekend… …Next round of precipitation arrives over Pacific Northwest on Sunday…
