Oil Jumps Nearly 3% Amid Escalating Israel-Iran Conflict, Uncertainty Over U.S. Role

Oil prices surged nearly 3% on Thursday as escalating air strikes between Israel and Iran fueled market fears, with Brent settling at $78.85 and WTI at $77.20. Israeli attacks on Iranian nuclear targets and Iran’s retaliatory missile strikes heightened geopolitical risks, compounded by U.S. President Trump’s pending decision on potential U.S. involvement. Analysts warned that U.S. entry could spark tanker attacks and disrupt the 18–21 million bpd of oil passing through the Strait of Hormuz. JPMorgan forecasted prices could hit $120–$130 if the strait closes, while Goldman Sachs cited a $10 risk premium already priced in. Though DBRS Morningstar expects any spike to be short-lived, analysts argue markets have underestimated geopolitical threats, signaling a potential shift away from recent oil price complacency. Russia, meanwhile, urged calm and reaffirmed OPEC+ output increases to meet summer demand.

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Iran Adjusts Oil Export Strategy Amid Conflict, Shifts Storage Toward China

Iran is sustaining crude oil exports during its ongoing conflict with Israel by loading tankers individually at Kharg Island’s eastern jetty and relocating a significant portion of its floating storage fleet closer to China. Despite missile strikes on energy infrastructure in both countries, Kharg Island—Tehran’s main export terminal—has remained operational, though western-side jetties are being avoided due to higher risk. Loadings reached a five-week high of 2.2 million barrels per day, mainly destined for China, while floating storage—around 40 million barrels spread across 36 tankers—is now partially positioned offshore China to mitigate disruption. Iran’s oil exports remain steady at 1.7 million bpd despite U.S. sanctions, with strategic tanker positioning allowing flexibility amid geopolitical tensions.

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India May Slash Oil Product Exports if Strait of Hormuz Is Blocked, Minister Says

India is preparing contingency plans to secure alternative crude oil sources and may cut refined-product exports if the Strait of Hormuz is blocked, Oil Minister Hardeep Puri said Thursday. With 1.5 million barrels per day of India’s 5.5 million bpd oil consumption passing through the Persian Gulf chokepoint, the government is monitoring the growing risk amid escalating Israel-Iran tensions. Puri emphasized India has sufficient reserves and diversified supply options and downplayed immediate supply concerns, citing global availability of crude. However, to safeguard domestic needs, India — a net petroleum product exporter — may reduce outbound shipments from refiners like Reliance Industries and Nayara Energy, which account for 82% of the country’s 1.3 million bpd of product exports.

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Diesel Soars Above $105 as Middle East Conflict Sparks Supply Panic and Futures Spike

Diesel prices in Europe surged past $105 a barrel — hitting $107 in some benchmarks — driven by mounting fears over Middle East supply disruptions and rapidly tightening market conditions. The benchmark diesel-to-crude spread in Europe surpassed $25 a barrel, its highest since March 2024, as traders rushed to exit bearish positions. The Israel-Iran conflict has raised the threat of restricted flows through the vital Strait of Hormuz, which last year carried 850,000 barrels per day of diesel. Europe, already strained by refinery outages and the loss of Russian supply, is scrambling to secure imports. Backwardation in ICE Gasoil futures has deepened dramatically, with July trading $21.25 above August and December 2025 now $45.25 higher than December 2026 — a stark shift from just $0.50 on June 9. These developments are now turning previously out-of-the-money diesel spread options profitable, reflecting traders’ growing conviction of a prolonged supply crunch.

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Chevron and Petrobras Lock In VLCC Time Charters Ahead of Middle East Rate Surge

Chevron and Petrobras secured time charters for VLCCs just before spot rates surged due to escalating Middle East tensions. Chevron fixed Thenamaris’ Seaduchess (313,200-dwt, 2022) for a year at $52,000/day, while Petrobras chartered Phoenix Vantage (300,000-dwt, 2016) for two years at $49,000/day, with an 11-month option. These rates now appear favorable as spot levels for modern scrubber-fitted VLCCs hit $58,800/day. Suezmax and Aframax fixtures also surfaced, including a $37,000/day two-year deal on Ionic Holdings’ newbuilding and short-term Aframax charters at ~$30,000/day. On the clean side, ST Shipping fixed Nissen Kaiun’s Nord Mate for three years at $19,500/day, and Pemex booked two MR tankers at $20,000/day each. Meanwhile, Nigeria's Dangote refinery was linked to a 9–11 month suezmax charter of Barbarosa, signaling increased term activity across vessel classes.

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Chevron Seeks to Sell 50% Stake in Singapore Refinery as Part of Asian Asset Restructuring

Chevron is seeking non-binding bids for its 50% stake in Singapore Refining Company (SRC), with PetroChina—its joint venture partner holding the remaining 50%—having the first right of refusal, sources told Reuters. The potential sale, estimated between $300 million and $500 million, is part of Chevron’s broader Asian divestment strategy that includes terminals in Australia and the Philippines, as the company aims to streamline operations and cut costs, possibly laying off up to 20% of its global workforce. Morgan Stanley is managing the sale, and other interested parties reportedly include Glencore. The SRC refinery, with a capacity of 290,000 barrels per day and seven VLCC-compatible berths, is Singapore’s smallest. The move follows Chevron’s recent exit from Singapore chemicals and mirrors Shell’s earlier departure from the city-state’s refining sector, as rising carbon taxes diminish the region's competitiveness.

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Sanctioned Russian Shipbuilder Plans 18 New Product Tankers for Rosneft Fleet

United Shipbuilding Corp, a Russian state-owned and US-sanctioned shipbuilder, will begin constructing up to 18 oceangoing product tankers under Project 19900M. The first three 7,900-dwt tankers will be built at Lotos Shipyard in Astrakhan starting September or October 2025, with the Krasnoye Sormovo yard also being considered for later hulls. Developed to Rosneft shipping arm Rosnefteflot’s specifications, the 141-meter vessels will have improved maneuverability, automation, and environmental safety, with 12 cargo tanks holding up to 8,870 cbm and no flashpoint restrictions. This follows a major 2023 order for 34 cargo ships placed with United by State Transport Leasing Co amid continued Western sanctions.

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Dynacom Expands Suezmax Order to Eight at New Times Shipbuilding Amid Eased US-China

George Procopiou’s Dynacom Tankers has exercised options for six additional 159,000-dwt suezmax tankers at China's New Times Shipbuilding, adding to two already ordered in April for 2028 delivery. The vessels, conventionally fueled and scrubber-fitted, are priced at $78M–$79M each. This expanded order underscores confidence in New Times amid cooling US-China trade tensions and stable shipyard relations. Procopiou’s group now holds the world’s largest tanker orderbook at 56 units, with over 80 ships across all sectors and an estimated $8B spent since early 2023. His conventional-fuel strategy reflects skepticism toward the immediate viability of low-carbon shipping technologies.

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Japan Reignites Long-Term LNG Deals Amid AI Power Surge

Japan is renewing interest in long-term LNG contracts amid surging power demands from AI-driven data center expansion, rising costs of alternative fuels, and a new national energy plan that affirms LNG’s role as a transitional fuel toward carbon neutrality by 2050. While LNG imports had declined over the past decade due to increased renewables and nuclear restarts, utilities like JERA and Tokyo Gas are now securing long-term deals with producers in the U.S., Abu Dhabi, and potentially Qatar. Japan’s revised strategy forecasts up to 74 million tons of LNG demand by 2040 under a high-risk decarbonization scenario, with power demand expected to grow by up to 22% by then. Although the Ministry of Economy, Trade and Industry encourages public-private cooperation for supply security, uncertainties remain over Japan’s decarbonization progress and nuclear energy trajectory, prompting importers to seek flexible and diversified LNG procurement strategies.