Oil posts weekly gain on trade deal hopes, new Iran sanctions

Oil prices rose more than 3% due to hopes of a U.S.-EU trade deal and new sanctions on Chinese importers of Iranian oil. Trump expressed optimism about resolving trade tensions with Europe during a meeting with the Italian Prime Minister. The sanctions, including measures against Chinese "teapot" refineries, aim to pressure Tehran about its nuclear program. OPEC members like Iraq and Kazakhstan plan to further decrease output. However, OPEC, the IEA, and banks like Goldman Sachs revised downward forecasts for oil prices and demand due to trade uncertainties caused by U.S. tariffs.

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Russian Arctic oil exports to China jump helped by STS transfers

Ship-to-ship transfers of sanctioned barrels are taking place around Singapore and Malaysia to evade U.S. sanctions on Russian Arctic oil exports. These transfers are allowing tankers to deliver oil to China without being on the sanctions list. China's imports of Arctic oil from Russia are increasing, with at least 4 million barrels completed last week and an estimated 16 million more set to arrive in the South China Sea this month. Despite obstacles such as longer delivery routes and higher costs, Chinese refiners are still interested in purchasing these STS cargoes due to their willingness to avoid sanctions. India, on the other hand, has reduced its purchases of Arctic oil due to sanctions, with other buyers including Syria and Myanmar entering the market. The future of Arctic oil exports to China will depend on logistics hurdles and the demand from Chinese refiners, while Russia continues to navigate around sanctions to maintain its oil export business.

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US drillers add oil and gas rigs for first time in four weeks

According to Baker Hughes, U.S. energy firms added oil and natural gas rigs for the first time in four weeks. The total rig count increased by two to 585, but was still down 5% from last year. Oil rigs rose by one to 481, while gas rigs gained one to 98. In the Utica shale basin, drillers added two rigs, bringing the total to 13, the highest since February 2024. Despite lower oil and gas prices in recent years, energy firms have focused on boosting shareholder returns and paying down debt rather than increasing output. The U.S. Energy Information Administration projected crude output to rise to 13.5 million barrels per day in 2025, lower than previously forecasted due to weaker global economic growth. The EIA also stated that the U.S. shale boom is nearing its end, with oil output peaking at 14 million bpd in 2027 before declining rapidly. Shale production is expected to peak at 10 million bpd in 2027 and then fall to 9.3 million bpd by 2050.

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Surplus of Atlantic aframax and suezmax tankers expected as Venezuela halts Chevron loadings

The Maduro regime retaliates against US sanctions by halting crude exports to the US, leading to an oversupply of tanker tonnage in the Atlantic. PDVSA revokes Chevron's authorization to ship crude, escalating tensions with the US. The US imposes tariffs on Venezuela's oil exports, leading to redirection of tankers to other markets. Venezuela may pivot towards Asia for oil sales, increasing demand for VLCCs. US secondary tariffs target China, leading to temporary pause in crude flows. European companies face export license withdrawals. Venezuela halts crude exports to US on Chevron-chartered tankers, causing delays for tankers awaiting paperwork to return cargoes.

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Pakistan plots first-ever US crude oil shipments to rebalance trade deficit Official reveals potential new source of long-haul tanker trips

Pakistan is considering importing US oil for the first time to offset a trade imbalance, after facing higher tariffs from the US. The proposal is awaiting approval from Prime Minister Shehbaz Sharif, with plans to buy about $1 billion worth of oil from the US. President Donald Trump has imposed a 29% tariff on Pakistani imports due to a $3 billion trade surplus. Other countries like India, Japan, South Korea, and Taiwan are also looking to increase their energy imports from the US to balance their trade figures.