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Daily Update — April 22, 2025

Oil Markets Respond to Tariffs; Climate Risk Analysis; and China’s Private Credit Market

Today is Tuesday, April 22, 2025, and here’s your curated selection of Essential Intelligence on global markets from S&P Global. Subscribe to be notified of each new Daily Update.

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Global Trade

Listen: Two weeks after Trump’s ‘liberation day,’ how have the oil paper and physical markets responded?

 

Following the series of protectionist tariff measures announced by US President Donald Trump on April 2, the crude oil complex was sent into a frenzy as the market outlook rapidly soured. But interesting patterns in the paper and physical markets have been materializing.

 

In this episode of the “Oil Markets” podcast, Joey Daly leads an in-depth discussion with market experts David Neef and Joseph Jaffe about the reactions in both the paper and physical markets in the middle distillates and fuel oil segments. Although the crude oil market's negative reaction captured immediate attention, what insights can other segments provide about the deeper impacts of tariff conflicts?

Energy Transition & Sustainability

Climate risk and portfolio analysis

 

Extreme weather events and chronic climate hazards pose significant financial risks to holders of sovereign and corporate debt, particularly in lower-income regions that are more vulnerable and have fewer resources for adaptation. The frequency and intensity of climate hazards, including extreme heat, drought and tropical cyclones, are expected to rise, leading to increased exposure and potential economic losses. S&P Global Ratings estimates that without adaptation, global GDP could decline 4.4% annually in a scenario where temperatures rise by 3.6 degrees C by the end of the century. 

 

S&P Global has developed the Physical Risk: Country and Subnational dataset, which provides crucial climate hazard exposure metrics for 201 countries and nearly 2,100 subnational regions. This dataset offers insights into the economic relevance of climate hazards by estimating GDP-weighted exposure metrics, enabling financial decision-makers, including asset managers and investors, to assess their portfolios and potential investments. It serves as a valuable tool for reporting on climate-related risks, especially for private companies that may lack detailed information.

Private Markets

The Contraction Of China's Private Credit Market

 

China's private credit market is a complex landscape that operates distinctly from its counterparts in the US and Europe. Since its formalization after the global financial crisis, this market has remained largely domestic and is characterized by heavy regulation and limited foreign participation. Borrowers and lenders face strict limitations on the amount of debt they can engage with and where they can invest, complicating access to private credit. Over the past seven years, the market has declined due to competition from local bond markets and reduced margins, making the risk-reward profile less attractive.

 

In China, private credit refers to non-standard debt and is an alternative funding source for borrowers who struggle to secure traditional credit. Unlike Western markets, China's non-standard debt sector is heavily regulated, requiring lenders to obtain licenses and follow strict disclosure requirements. 

In case you missed it

  • Global shipping rates are falling across multiple segments as escalating trade tensions and new US tariff threats weigh on maritime trade flows.
  • After concluding an open season on phase one of the Intensity natural gas egress pipeline in the Bakken Shale, the developer launched an open season on April 17 for a second phase to take gas farther east in North Dakota.
  • The US will be unable to quickly build up processing capacity for a slew of critical metals and minerals if the Trump administration pursues trade barriers through a new national security probe, analysts told Platts, part of S&P Global Commodity Insights.

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