Oil Prices Dip as OPEC+ Considers July Output Hike and U.S. Stockpiles Rise

Oil prices fell on Thursday amid reports that OPEC+ may raise production by 411,000 barrels per day in July, prompting fears of oversupply. Brent crude settled at $64.44 per barrel and WTI at $61.20, as traders reacted to the potential policy shift and weaker U.S. demand. Bloomberg reported OPEC+ is weighing increased output during its June 1 meeting, with Saudi Arabia likely leading the rise. Analysts view this as a pivot from price defense to market share, with Onyx Capital likening it to “ripping off a Band-Aid.” U.S. Energy Information Administration (EIA) data also added pressure, showing a surprise build of 1.3 million barrels in crude inventories, contradicting expectations for a drawdown. Fuel demand slipped, and crude imports hit a six-week high, increasing bearish sentiment. However, Chevron’s license to operate in Venezuela expires May 27, which could constrain supply if not renewed, possibly supporting prices. Despite that, analysts remain skeptical, as such deadlines have been extended in the past, muting immediate market reaction.

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U.S. Crude Storage Demand Soars Amid OPEC+ Supply Surge Fears

Demand for U.S. crude oil storage has surged to levels not seen since the COVID-19 pandemic, as traders prepare for a potential OPEC+ price war and oversupply. The Tank Tiger reported storage inquiries doubling to 3 million barrels for June, driven by fears of OPEC+ bringing 2.2 million bpd back to the market by November. The move aims to punish overproducing members and reclaim market share from U.S. shale producers. In response, Brent crude recently fell to a four-year low of $58.40, prompting traders to store oil in anticipation of a rebound. The market is increasingly in contango, signaling a near-term glut, with traders now even booking January storage at Cushing, a rare move. Tank Tiger COO Steven Barsamian said this long-dated demand reflects deep pessimism in the market. U.S. oil inventories have also climbed unexpectedly, reaching 443.2 million barrels, the highest since July 2024. While trade talk optimism slowed near-term bookings, long-term storage demand suggests traders expect persistent market weakness.

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Iran Adds 2 Million Barrels of Crude Storage at Kharg Island to Boost Oil Export Flexibility

Iran has expanded crude oil storage capacity by 2 million barrels at its Kharg Island export terminal, the country’s key oil shipment hub, according to state oil agency Shana. The new capacity comes from restoring Tanks 25 and 26, which now each hold 1 million barrels, equivalent to a suezmax cargo. These upgrades are part of Iran’s broader strategy to enhance oil trade flexibility amid sanctions-driven infrastructure challenges. National Iranian Oil Co. managing director Hamid Bovard called the new storage a “strategic advantage”, especially during volatile energy markets. Kharg Island processes crude from Abouzar, Forouzan, and Doroud offshore fields and handles over 90% of Iran’s oil exports. Iran previously added 8 new 500,000-barrel tanks at Jask terminal and 7 million barrels of capacity at Qeshm Island. In 2023, Iran’s total storage at Kharg stood at 28.3 million barrels, with additional capacity at Sirri and Lavan islands. The upgrades are part of a broader $34 billion infrastructure plan covering over 100 energy projects, including 18 million barrels of new storage.

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Turkey’s Urals Oil Imports Climb as Prices Drop Below G7 Cap

Turkey is set to increase its imports of Russian Urals crude in May after leading refiner Tupras resumed purchases, LSEG data shows. Tupras had halted imports in February due to U.S. sanctions, but restarted in April as Urals prices dipped below the G7-imposed $60 per barrel cap. The Group of Seven's price cap restricts Western firms from insuring or transporting Russian oil sold above that threshold. Urals shipments to Turkey are expected to reach 1.2 million tons (283,000 bpd) in May, up from 0.9 million tons in April, matching January’s level. Turkey, the second-largest importer of Urals oil after India, hasn’t joined Western sanctions but follows international compliance standards. The country also imports CPC Blend crude, which is produced mainly in Kazakhstan but exported via Russian ports. With both Urals and CPC Blend, Turkey’s total May oil imports from Russian ports could hit 2 million tons, the highest since July 2024. Some traders expect the final May volume could exceed current forecasts, depending on updates.

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VLCC Buying Frenzy Continues as MOL Sells 2008-Built Tanker to Chinese Buyer

Japan’s Mitsui OSK Lines (MOL) has sold its 2008-built VLCC M Star to Chinese buyers for between $46.75 million and $48 million, below its market valuation of $51 million, according to brokers. The scrubber-fitted, Kawasaki-built tanker was acquired as a resale in 2007 for $137.5 million, and recently attracted 4–5 offers before the sale. The deal reflects growing demand for older VLCCs, driven by rising asset values and expectations of a market rebound, especially as OPEC+ production increases. Meanwhile, Singapore’s Beyond Shipmanagement bought the 297,000-dwt Xin Ning Yang (built 2005) at auction from COSCO for $27.71 million, renaming it Rising Sun 1 — significantly under its $34 million valuation. Greek shipping giant Angelicoussis Shipping Group also sold the 320,500-dwt Maran Canopus (built 2007) for $48–$50 million, the oldest tanker in its 63-ship VLCC fleet. In a separate deal, New Shipping of Greece sold its 2003-built New Naxos to Singapore-based buyers for $33 million. According to Clarksons, average prices for 15-year-old VLCCs rose by $5 million in May, bouncing back from a recent low. Seaborne Shipbrokers’ Eva Tzima noted strong secondhand VLCC and MR demand, with new Chinese interest in aframax tankers possibly linked to tightening supply due to sanctions.

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U.S. Injects $33M Into Houston Ship Channel Expansion to Support Bigger Vessels

The U.S. government has allocated $33 million to widen and deepen the Houston Ship Channel, a critical artery for American trade. The funding is part of a larger $131 million package for Houston included in the U.S. Army Corps of Engineers’ 2025 budget, which also provides $98 million for maintenance dredging. The expansion, known as Project 11, was approved in 2020 and aims to widen the channel to 700 feet and deepen upstream segments to 46.5 feet, making room for larger vessels. Dredging began in 2022 and is expected to finish in 2028. Port Commission Chairman Ric Campo credited bipartisan efforts, particularly Congressmen Wesley Hunt and Brian Babin, for securing the funding. The Corps also agreed to assume long-term maintenance for two channel segments, potentially saving $380 million over 50 years. The Houston Ship Channel plays a vital role in petrochemical transport, grain exports, and container imports, supporting the busiest port in the U.S. by tonnage. This investment reflects a broader push to boost trade infrastructure and accommodate growing maritime traffic.

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U.S. Senate Blocks California’s 2035 Gas Car Ban, Sending EV Mandate Repeal to Trump

The U.S. Senate voted to repeal California’s EPA waiver that allows the state to ban sales of gasoline-only cars by 2035, a move now sent to President Donald Trump. The decision undermines rules adopted by 11 states representing a third of the U.S. auto market, sparking backlash from environmentalists and California Governor Gavin Newsom, who vowed legal action. The Senate also moved to rescind California’s zero-emission truck mandates and low-nitrogen oxide rules, further weakening state-specific clean vehicle policies. Major automakers like GM and Toyota, who lobbied against the mandates, praised the vote, citing unrealistic compliance costs and limited EV demand. Tesla declined to comment, while Earthjustice criticized the Senate for resisting global EV momentum. The Congressional Review Act used to pass the repeal may face legal challenges, as the GAO previously ruled the waivers couldn’t be overturned this way. The Senate action follows House efforts to end EV tax credits, impose a $250 annual EV fee, and repeal federal emissions rules. If upheld, the move could delay EV production and sales nationwide, especially in states struggling to meet California’s aggressive targets.

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Saudi Arabia’s $8.4B Neom Green Hydrogen Project Stalls Amid Weak Global Demand

Saudi Arabia’s $8.4 billion Neom green hydrogen project, the world’s largest of its kind, is facing setbacks due to a lack of international buyers, prompting a pivot to uncertain local markets. Initially aimed entirely at export via green ammonia, the project currently has only one firm buyer—TotalEnergies, contracted for 70,000 tons annually—covering just one-third of projected output. Co-developed by Neom, Air Products & Chemicals Inc., and Acwa Power, the plant is designed to produce 600 tons of hydrogen daily using 4 GW of renewable energy, with commissioning expected in 2026 and production by 2027. Rising costs and an unclear regulatory framework have led Air Products to delay investments in European receiving terminals, further complicating sales. Developers are now considering scaling the project in phases based on offtake agreements, though much of the infrastructure is already built, limiting flexibility. Broader hydrogen ambitions in the kingdom have also been scaled back, including shelving a blue ammonia initiative and scrapping plans for a hydrogen investment facilitation company.

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Microsoft Partners with Norden to Slash Maritime Emissions Using Biofuel

Microsoft has launched a pilot project with Danish shipping firm Norden to reduce Scope 3 maritime emissions by nearly 10,000 tonnes of CO₂ over three years. The initiative uses Norden’s “book and claim” system, which allows companies to claim emissions reductions from biofuel-powered voyages, even if their cargo isn’t directly on those ships. Norden burned certified waste-based biofuel, which delivers an 80–90% lifecycle emissions cut compared to traditional marine fuel. The resulting emissions reductions were transferred to Microsoft with full transparency, supported by a double audit and a framework from the Smart Freight Centre. The companies are also working with the Roundtable on Sustainable Biomaterials (RSB) to strengthen the credibility of the book and claim registry system. Microsoft’s sustainability lead Julia Fidler said the project helps the company reduce maritime supply chain emissions while advancing registry infrastructure for sustainable fuels. Norden’s COO Anne Jensen highlighted that this approach helps customers act now on emissions reduction despite the limited availability of low-carbon fuels. Meta launched a similar partnership with Norden last November to decarbonize shipments tied to its data center construction.