Oil Prices Hover Near 7-Week High Amid US-China Trade Talks, OPEC+ Moves

Oil prices remained near a seven-week high as markets awaited the outcome of US-China trade talks, which could influence global economic growth and oil demand. Brent crude settled at $66.87 per barrel, while WTI ended at $64.98. Trade negotiations extended into a second day in London, with hopes of a breakthrough, though global growth concerns persist after the World Bank cut its 2025 forecast to 2.3%. On the supply side, Saudi Aramco's July allocations to China were slightly reduced, hinting that OPEC+'s planned output increases may not flood the market. Meanwhile, geopolitical risks loomed, including potential sanctions relief for Iran and new EU sanctions on Russia, both of which could alter global supply dynamics. US oil inventories are also in focus, with analysts predicting a third consecutive weekly stockpile drawdown.

___________________________________

EU Pushes for Lower $45 Russian Oil Price Cap, Sanctions 77 More Tankers

The European Commission confirmed it wants to lower the Russian oil price cap from $60 to $45 per barrel to tighten pressure on Moscow amid stalled Ukraine peace talks. The EU has also blacklisted 77 more shadow fleet tankers trading Russian oil, bringing the total to 419 vessels. Commission President Ursula von der Leyen said the move aims to reflect lower market prices and restore the cap’s effectiveness, with Urals crude recently averaging $52.86. Additional sanctions include a ban on EU companies using Russia’s Nord Stream infrastructure and restrictions on 22 more Russian banks and defense-linked firms. Von der Leyen emphasized the cap’s impact, stating Russia’s oil and gas revenues are down nearly 80% since before the war. However, EU member approval is still required, and opposition from Slovakia and Hungary may complicate adoption of the new sanctions.

___________________________________

EIA Forecasts First US Oil Output Decline Since 2021 Amid Shale Slowdown

The U.S. Energy Information Administration (EIA) projects a decline in U.S. crude oil production in 2026, marking the first annual drop since the pandemic-induced slump in 2020–2021. Output is expected to fall to 13.37 million bpd, down from 13.42 million bpd in 2025, amid lower oil prices and reduced drilling activity. The slowdown challenges President Trump’s push for increased domestic energy production and raises concerns that the U.S. shale boom is nearing its end. Global economic uncertainties and OPEC+ easing supply curbs have contributed to weaker prices, with Brent averaging $65.97 this year and falling to $59.24 next year. Despite this, total world oil output is forecast to rise to 104.4 million bpd in 2025, but slightly less than previously expected for 2026. Analysts note that demand-side recovery will be more critical for oil price support than declining U.S. supply.

___________________________________

Canadian Oil Still Vital to U.S. Despite Trump’s Trade Rhetoric, Cenovus CEO Asserts

Cenovus Energy CEO Jon McKenzie emphasized that the U.S. remains heavily reliant on Canadian oil, despite President Trump's repeated threats of tariffs and claims that the U.S. no longer needs Canadian imports. Nearly 4 million barrels per day of Canadian crude flow to U.S. refineries, especially in the Midwest, which are specifically configured to handle Canadian grades. Trump’s rhetoric has strained cross-border energy ties, and Canadian Prime Minister Mark Carney has acknowledged a shift away from traditional U.S.-Canada economic integration. McKenzie warned against reactionary responses and called for strategic, long-term thinking to maintain and strengthen bilateral energy ties. While Carney plans to fast-track clean energy projects to counter U.S. threats, McKenzie argued for comprehensive regulatory reform instead of government favoritism in project selection. He stressed the need for Canada to diversify exports but acknowledged that North American energy systems remain fundamentally interconnected.

___________________________________

Guyana to Export First Crude from Fourth Oil Platform by September

Guyana’s fourth offshore oil production platform, "One Guyana," will export its first crude cargo between late August and early September, according to the government. The floating facility, built by SBM Offshore, is expected to bring the ExxonMobil-led consortium’s total production capacity to over 900,000 barrels per day. The new crude grade, "Golden Arrowhead," will debut with a 1 million barrel cargo, likely offered via tender by Exxon, Hess, and CNOOC. The platform will produce oil and gas from the Yellowtail and Redtail fields. Since 2020, Guyana has rapidly expanded its oil exports, becoming Latin America's fifth-largest crude exporter. The nation aims to boost output to 1.7 million bpd by 2030, driven by rising global demand, particularly from European refiners.

___________________________________

Kazakhstan’s Oil Exports Near Record Highs Again, Defying OPEC+ Pressure

Kazakhstan is set to maintain near-record crude oil exports in July, with CPC Blend shipments from Novorossiysk expected at 1.65–1.75 million bpd—potentially exceeding the February record of 1.7 million bpd. This sustained high output is testing OPEC+ cohesion, especially as Kazakhstan continues to exceed its assigned production targets. In April, Kazakhstan pumped 1.82 million bpd—roughly 300,000 bpd above its quota—and is expected to further boost annual production to 97 million tons in 2024 and 105 million by 2026. Despite OPEC+ urging cuts, Kazakh officials insist they cannot impose limits on international partners involved in major projects. About 90% of CPC Blend exports are Kazakh in origin, and the Black Sea terminal handles around 80% of the nation’s total crude shipments. Rising volumes are largely attributed to Chevron’s Tengiz expansion, while KazMunayGas is pushing forward development of the massive Kashagan field.

___________________________________

Nigeria’s $5 Billion Oil-Backed Loan from Aramco Delayed Amid Falling Crude Prices

Nigeria’s proposed $5 billion oil-backed loan with Saudi Aramco has stalled due to falling oil prices, raising concerns among banks expected to co-finance the deal. The decline in Brent crude to around $65 per barrel from over $82 earlier this year has made banks wary about the security of oil deliveries needed to back the loan. President Bola Tinubu initiated talks during a November summit with Saudi Crown Prince Mohammed bin Salman, aiming to include the loan in Nigeria’s broader $21.5 billion foreign borrowing plan. The deal would require Nigeria to commit at least 100,000 barrels of oil per day, nearly doubling its recent oil-backed loan commitments. However, the country is already using about 300,000 bpd to repay other loans and is struggling to meet its production targets, pumping just under 1.5 million bpd in April. Tinubu’s government is attempting to cut production costs and boost output to meet the demands of both existing and proposed financial obligations.

___________________________________

Vitol Secures Short-Term Tankers for Possible Red Sea Use Amid VLCC Market Pause

As the VLCC term market stagnated during the Nor-Shipping event in Oslo, energy trader Vitol reportedly secured a suezmax and an aframax tanker for short-term contracts potentially involving Red Sea routes. The 158,000-dwt Astra Maris was fixed at about $35,000/day for at least one month, while the 105,000-dwt Apollo was also booked for a similar term, though at an undisclosed rate. Despite OPEC's pledges for higher oil output, VLCC spot market discussions have stalled, while smaller tanker segments like aframaxes remain resilient. Braemar highlighted a recent two-year aframax deal by China’s Unipec at $31,500/day, close to spot rates, reflecting confidence in the market despite geopolitical uncertainties. Red Sea transits have surged 60% since last August due to a partial Houthi ceasefire, reaching 37 ships daily—still below the pre-conflict average of 75. The Houthis have not attacked since November, currently limiting threats to vessels linked to or docked in Israel.