Oil Prices Soar 4% Amid Middle East Tensions and U.S. Embassy Evacuation Plans

Oil prices surged over 4% on Wednesday to a two-month high after reports that the U.S. plans to evacuate its embassy in Iraq due to escalating Middle East tensions. Brent rose to $69.77 and WTI to $68.15 per barrel, fueled by fears of instability in OPEC's second-largest producer. Iran’s defense minister threatened strikes on U.S. bases if nuclear talks fail, while President Trump expressed doubts over Iran halting uranium enrichment. Despite OPEC+ preparing to raise output by 411,000 bpd in July, rising domestic demand in key producers like Saudi Arabia could absorb much of the increase. A new U.S.–China trade deal and a larger-than-expected drop in U.S. crude inventories further supported prices. With rising gasoline demand and prospects of lower U.S. interest rates, market sentiment has turned bullish on oil.

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Trans Mountain Targets 2027 Pipeline Expansion, Urges Delay in Government Sale

Trans Mountain CEO Mark Maki announced plans to boost the pipeline’s capacity by 75,000 bpd by early 2027 through flow-enhancing chemicals, with further increases requiring dredging to accommodate larger tankers. The system currently runs at 85% of its 890,000-barrel-per-day capacity, following its 2023 expansion via a twin line from Alberta to Vancouver. Maki emphasized optimizing current infrastructure before considering Alberta Premier Danielle Smith’s proposed new line to Prince Rupert. Canada’s search for export diversification has grown more urgent following U.S. tariff threats earlier this year. Maki cautioned against the government’s planned sale of Trans Mountain, suggesting its value would rise once toll disputes are resolved and full capacity is reached. He believes the government will recover its C$34 billion investment more effectively if it delays the sale until the pipeline proves its long-term utility.

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Hokchi Energy Seeks to Bypass Pemex Amid $380 Million in Unpaid Oil Debts

Hokchi Energy, a major oil and gas producer in Mexico, is seeking to change its contract to sell oil directly to PMI Comercio Internacional, Pemex’s commercial arm, due to months of unpaid debts exceeding $380 million. The company has grown increasingly frustrated with Pemex, which is deeply indebted and has struggled for years to pay suppliers and partners. PMI is considered more reliable, but Hokchi’s two recent attempts to change its contract—most recently under Mexico's new government—were rejected. Hokchi filed two lawsuits to recover the funds, reflecting growing industry reluctance to work with Pemex. Despite claims from Pemex that it owes only $92.4 million in 2024, sources say unpaid invoices not yet disclosed make the true amount much higher. Pemex’s broader financial troubles persist, with $101 billion in debt and $20 billion owed to service providers, while its production continues to decline due to aging fields and disappointing new discoveries.

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U.S. Ethane Shipment Rerouted to India Amid China Export Curbs

A U.S.-loaded ethane tanker originally bound for China is now heading to India, following new U.S. export restrictions requiring licenses for ethane shipments to China. The STL Qianjiang, previously dedicated to China’s Satellite Chemical, is en route to Dahej, India, with Reliance Industries listed as the final buyer. This diversion highlights the impact of escalating U.S.-China trade tensions on global ethane flows. Historically, about half of all U.S. ethane exports have gone to China for petrochemical use due to cost advantages over naphtha. U.S. firms like Energy Transfer and Enterprise Products have received government notices blocking or restricting exports to China, including emergency denials for 2.2 million barrels of ethane. The rerouting signals growing uncertainty for U.S. energy exporters and could strengthen energy trade ties between the U.S. and India.

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India’s State Oil Firms to Order $600M in Domestic Tankers to Boost Shipbuilding

India’s state-run oil refiners — Indian Oil Corp., Bharat Petroleum Corp. (BPCL), and Hindustan Petroleum Corp. (HPCL) — plan to jointly order 10 domestically built medium-range tankers as part of a $600 million initiative to strengthen the country’s shipbuilding sector. The vessels, each ranging from 50,000 to 60,000 deadweight tons, are expected to be delivered starting in 2028. Indian Oil will likely own six ships, with BPCL and HPCL owning two each. The move aligns with India’s strategy to treat shipbuilding as a strategic national asset, supporting energy, trade, and defense ambitions. However, refiners are hesitant to operate the vessels directly and are seeking government subsidies, as chartering remains more cost-effective. Domestically built tankers are expected to cost more than alternatives from South Korea or China, but the effort may boost India’s limited large-vessel manufacturing capacity.

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EU Eyes Lower Russian Oil Price Cap, Threatening Greek Shipowners' Trade Gains

The EU plans to lower the Russian oil price cap from $60 to $45 per barrel, potentially sidelining Greek shipowners who recently re-entered the trade as global crude prices declined. Greek operators accounted for 40% of crude shipments from Russia’s Primorsk port in the last month, capitalizing on Urals crude prices that have fallen below the current cap. A lower cap could drive mainstream shipping companies out of the trade if prices rise above the new threshold, risking sanctions. The cap, originally a G7 initiative led by the U.S., is under debate, especially with uncertainty over Donald Trump’s stance if reelected. Critics argue the cap is poorly enforced due to fraudulent documents and claim tightening it without better enforcement is ineffective. The cap’s revision requires unanimous EU approval, and internal opposition — notably from Slovakia — complicates efforts to implement the change.

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EU to Subsidize Over 200 Million Litres of Greener Aviation Fuel to Boost Demand

The European Union plans to subsidize airline purchases of over 200 million litres of sustainable aviation fuel (SAF) to encourage a shift away from fossil-based kerosene. This subsidy could account for around 15% of global SAF production, which totaled 1.3 billion litres last year, according to IATA. The initiative will be funded through the sale of 20 million carbon emissions permits, aimed at helping airlines cover the higher costs of SAF. The subsidies include up to €6 per litre for synthetic e-fuels and €0.5 per litre for biofuels, potentially supporting purchases of up to 216 million litres of e-fuels or 2.6 billion litres of biofuels. SAF currently costs three to five times more than conventional jet fuel and makes up just 0.3% of global supply, making EU usage targets challenging for airlines. The EU mandates 2% SAF use at airports by 2025, rising to 6% by 2030, while also phasing out free carbon permits to increase climate pressure on the aviation sector.

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Japan’s Jera Finalizes 20-Year LNG Deals With US Suppliers

Jera Co., Japan’s largest power generator, has signed 20-year agreements to purchase up to 5.5 million tons per year of LNG from U.S. suppliers. The deals include binding contracts with NextDecade Corp. and Commonwealth LNG LLC, and non-binding agreements with Sempra Infrastructure LLC and Cheniere Marketing LLC. These long-term commitments reinforce Japan’s position as the world’s second-largest LNG importer. Jera CEO Yukio Kani emphasized LNG’s strategic importance for Japan’s energy security, even as the country seeks to expand renewables and restart nuclear power. Meanwhile, in the Gulf of Mexico, oil majors like Chevron and BP continue to invest in deepwater projects despite the lack of major new discoveries since 2017. Advances in technology have enabled production from challenging fields such as Chevron’s Anchor and BP’s upcoming Kaskida project, underlining the region’s long-term energy potential.

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Shell to Add 12 Million Tons of LNG Capacity by 2030 from Active Projects

Shell plans to add up to 12 million metric tons of LNG capacity by 2030 through projects already under construction, according to Cederic Cremers, Shell’s president of integrated gas. These expansions include developments in Canada, Qatar, Nigeria, and the UAE. Shell, already the world’s largest LNG trader, currently buys around 70 million tons of LNG annually and delivered nearly 65 million tons to over 30 countries last year. The company is also growing its customer supply base through acquisitions, such as Pavilion Energy in Singapore, and third-party contracts. Cremers stated that by 2030, 60% of new global LNG supply will come from the U.S. and Qatar, driven by rising demand in Asia and sectors difficult to electrify. Shell projects global LNG demand to rise by about 60% by 2040 due to economic growth, industrial decarbonization, and increased AI-driven energy needs.

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Iran Seizes Four More Tankers in Persian Gulf Amid Intensified Fuel Smuggling Crackdown

Iran has seized four additional tankers in the Persian Gulf as part of an ongoing crackdown on fuel smuggling, according to Minab county prosecutor Ebrahim Taheri. The operation, led by naval patrols and marine commandos, uncovered thousands of liters of smuggled fuel stored in vessel tanks and containers. The seized vessels, whose names were not disclosed, have been handed over to the National Iranian Oil Products Distribution Co. Iran’s ultra-low domestic fuel prices—due to subsidies—continue to incentivize cross-border smuggling. Earlier this year, Iran also seized three tankers and two Tanzanian-flagged ships, although Tanzania later claimed those vessels were no longer on its registry. These events reflect growing tensions in the region’s key shipping lanes and Tehran’s aggressive efforts to curb fuel smuggling.

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Qatar Port Halts Midday Berthing Amid Rising Heat Risks After Seafarer Death

Qatar’s Mesaieed port has suspended all berthing operations from 10 a.m. to 3:30 p.m. until September 30 due to dangerous heat levels, following the death of a seafarer from heat exhaustion in 2023. The deceased, a 41-year-old bosun, collapsed after working long hours in extreme conditions, with three other crew members also affected while onboard the Elpida GR. A Maltese investigation linked the incident to intense physical labor in temperatures reaching 45°C and humidity at 77%. The port authority implemented the midday suspension to mitigate the risk of heat-related illnesses for seafarers handling mooring operations. Channel movements will continue unless pilots deem bridge conditions unsafe due to heat, echoing a similar stand taken by pilots in Brazil. The World Economic Forum’s 2024 Global Risks Report underscores extreme weather, including heat, as a mounting threat to maritime operations and global supply chains.

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Greek Broker Warns of Fleet Age Crisis as Modern Tanker Owners Gain Competitive Edge

Greek broker Xclusiv Shipbrokers has highlighted a looming crisis in the tanker sector due to a rapidly ageing global fleet, warning that over one-third of tankers will be older than 21 years by 2029. The firm projects the number of such older vessels will more than double from 1,366 in 2025 to 3,023 by the decade’s end, especially affecting the handy/MR1 and panamax/LR1 segments. Handysize and MR1 tankers are already the oldest, with 33% now over 21 years, and that figure is expected to reach 56% by 2029. This ageing trend poses significant risks as older ships struggle with stricter environmental and fuel-efficiency regulations, likely making them less attractive to charterers. Xclusiv emphasized the urgent need for aggressive fleet renewal to maintain competitiveness and regulatory compliance. Without accelerated scrapping and newbuild deliveries, the market may face severe supply-side constraints, pushing owners of modern tankers into a dominant position.