Oil Reaches Five-Month High as U.S. Joins Israel in Striking Iranian Nuclear Sites

Oil prices surged to their highest levels since January on Monday following U.S. airstrikes on key Iranian nuclear sites over the weekend, escalating Middle East tensions. Brent crude climbed 2.44% to $78.89 per barrel, while WTI rose 2.53% to $75.71, with earlier intraday highs of $81.40 and $78.40, respectively. President Trump declared the strikes had “obliterated” Iran’s main nuclear facilities, prompting fears of Iranian retaliation, including a potential closure of the Strait of Hormuz—a chokepoint for about 20% of global oil flows. Iran’s parliament reportedly approved a measure to close the strait, though such threats have not materialized in the past. Brent is up 13% and WTI 10% since the conflict began on June 13. Analysts note that while risk premiums are high, sustained price gains may be capped without actual supply disruptions.

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Iran Edges Closer to Strait of Hormuz Closure Amid Escalating Tensions

Iran’s parliament has backed a potential closure of the Strait of Hormuz in response to U.S. strikes on its nuclear sites, though final approval rests with the Supreme National Security Council. Revolutionary Guards commander Esmail Kosari said the action “will be done whenever necessary.” Analysts see a full and sustained shutdown as unlikely due to the heavy economic impact, particularly on China, a major buyer of Iranian oil. However, even short-term disruption could push oil prices into triple digits and raise freight and insurance costs. U.S.-linked shipping now faces elevated threat levels in the Red Sea and Gulf of Aden, with concerns over possible retaliatory attacks by Iran-backed Houthis. Maersk said it will maintain transits through Hormuz while monitoring risks.

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Two Supertankers Reverse Course in Strait of Hormuz After U.S. Strikes on Iran

Two VLCCs — Coswisdom Lake and South Loyalty— each capable of transporting 2 million barrels of crude, abruptly reversed course in the Strait of Hormuz on Sunday following U.S. airstrikes on Iranian nuclear sites. The U-turns, captured via vessel tracking data, suggest the first visible signs of disruption or rerouting in oil tanker traffic through the key waterway amid rising regional tensions. Greece's shipping ministry has advised vessels to delay passage or seek shelter. Tanker earnings and freight derivatives surged as traders and owners brace for potential fallout and shipping delays in one of the world's most critical oil transit chokepoints.

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Iranian Oil Discounts Deepen in China as Teapots Cut Back Amid Price Surge and Sanctions

Iranian oil sellers are offering bigger discounts to Chinese buyers in July, with Iranian Light crude priced $3.30–$3.50 below Brent, up from $2.50 in June, as inventories swell and independent refineries—called teapots—cut purchases due to a $10 spike in global oil prices. Many teapots, especially in Shandong province, are posting their steepest losses of the year and running at just 51% capacity. Iranian oil in storage—across Chinese ports and floating tanks near Malaysia and Singapore—has ballooned to 70 million barrels, enough to cover two months of Chinese demand. Total Iranian oil on water is nearing 120 million barrels, a recent high. Additionally, U.S. sanctions on three Chinese teapots have deterred some refiners, shifting roughly 100,000 barrels/day to non-sanctioned sources in early 2025—still a small fraction of the 1.4–1.5 million bpd Iran sends to China.

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China’s May Crude Imports Slip 0.8% Year-on-Year Amid Declines from Russia, Malaysia, and Saudi Arabia

China's crude oil imports from Russia fell 5.9% year-on-year in May to 8.38 million metric tons (1.97 million bpd), though they rose 3.8% compared to April. Imports from Malaysia, a key hub for sanctioned Iranian oil, dropped 36.2% from April and 13.3% year-on-year to 5.07 million tons (1.19 million bpd). Saudi Arabia’s shipments to China declined 27.1% year-on-year to 5.42 million tons (1.28 million bpd), while imports from Brazil surged 42% to 4.77 million tons (1.13 million bpd). China recorded no crude imports from Iran or Venezuela in May. Overall, China’s total crude imports slightly decreased by 0.8% year-on-year to 46.6 million tons (10.97 million bpd), influenced by refinery maintenance across state and independent facilities. Other notable changes include rises from Iraq and Angola, but declines from UAE, Kuwait, and the US.

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Kazakhstan's Oil Output Set to Rise 6% in June, Driven by Tengiz Field Recovery

Kazakhstan’s daily oil and condensate output is projected to rise 6% in June to 2.14 million barrels per day (285,000 metric tons), up from 2.02 million bpd in May, according to the Energy Ministry and national statistics bureau. This increase is largely attributed to a production rebound at the giant Tengiz oilfield, which saw output climb to 940,000 bpd in early June, up from 765,000 bpd in May. The country has faced criticism within OPEC+ for frequently exceeding its quota. Kazakhstan aims to raise full-year output by nearly 10% in 2025 to 96.2 million tons.

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Danish Navy Confronts Sanctioned Tanker Using False Flag in Baltic Sea

The Danish Navy intercepted the sanctioned aframax tanker Udaya (ex-Marathon, built 2005) this week in the Baltic Sea after discovering the vessel falsely claimed Comoros registry. The Udaya, part of the shadow fleet and sanctioned by the EU and UK, was transporting Russian crude and transmitted Comoros flag via AIS. However, the Comoros authorities confirmed the tanker was not registered with them, making the vessel stateless under international law. Denmark, which has the legal right to detain stateless ships, did not hold the vessel, which continued toward Egypt. The incident highlights growing risks in policing the shadow fleet amid potential military escalation — especially after a Russian jet reportedly deterred an Estonian attempt to divert another sanctioned tanker last month.

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DHT Holdings Buys Modern VLCC for $107M to Boost Fleet Amid Rising Market Rates

New York-listed DHT Holdings confirmed the purchase of a modern VLCC, the 319,000-dwt Papalemos built in 2018, for about $107 million to replace older vessels sold this year. The scrubber-fitted tanker was built by HD Hyundai Heavy Industries and is expected to be delivered by late Q3. This acquisition will expand DHT’s VLCC fleet to 27 ships and improve its fleet efficiency and age profile. The price is considered “eyebrow-raising” but justified by market prospects and premium earning potential, with analysts noting a slight premium over newbuilding parity. VLCC rates have surged due to Middle East war risks, hitting $65,000 per day for modern scrubber vessels. DHT CEO Svein Moxnes Harfjeld highlighted the deal as part of the company’s strategy to enhance earnings per share and renew its fleet.