Oil Prices Rebound Nearly 1% as U.S. Demand and Inventory Draws Support Market

Oil prices rose nearly 1% on Wednesday, with Brent settling at $67.68 per barrel and WTI at $64.92, rebounding from a 13% drop earlier in the week driven by easing Middle East tensions. The gains followed U.S. government data showing strong demand: crude inventories fell by 5.8 million barrels, far exceeding expectations for a 797,000-barrel draw, and gasoline stocks dropped by 2.1 million barrels amid the highest implied gasoline demand since December 2021. Analysts noted that geopolitical risks from the Israel-Iran conflict have subsided but not disappeared. Expectations of a U.S. interest rate cut as early as September also supported market sentiment. Analysts now expect oil prices to consolidate in the $65–70 per barrel range as traders watch upcoming U.S. economic data and the Fed’s rate decision.

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Trump Hints at Easing Iran Oil Sanction Enforcement to Support Post-Conflict Rebuilding

President Trump indicated on Wednesday that while the U.S. is maintaining its maximum pressure campaign on Iran, including oil sanctions, it may ease enforcement to help Iran rebuild. At the NATO Summit, he stated, “They’re going to need money to put that country back into shape. We want to see that happen.” The comments followed Trump's earlier remark allowing China to continue importing Iranian oil, which the White House later clarified did not formally lift sanctions. China, Iran’s top oil buyer, has faced multiple sanctions under Trump targeting its “teapot” refineries and port operators. Trump's Middle East envoy, Steve Witkoff, said the gesture was meant to show willingness to cooperate with China and signal to Iran the potential for diplomacy.

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U.S. Partially Eases Ethane Export Ban to China Amid Trade Tensions

The U.S. Department of Commerce has issued letters to Enterprise Products and Energy Transfer, allowing them to load ethane onto vessels bound for China but prohibiting its unloading without special authorization. This follows licensing restrictions imposed in late May that halted exports and caused vessel congestion near the U.S. Gulf Coast. The move suggests Washington may be preparing to ease trade restrictions amid a thaw in U.S.-China relations, including China's recent approval of rare earth exports. However, companies are unlikely to risk shipments without full clearance, as unauthorized delivery could result in penalties of up to twice the cargo’s value. Ethane is a critical feedstock for China's petrochemical sector, and the U.S. supplies about half of its imports.

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Russia Signals Openness to August Output Hike if OPEC+ Deems It Necessary

Russia is open to supporting another oil production increase at the upcoming OPEC+ meeting on July 6, contingent on the group’s consensus, according to sources familiar with Moscow's position. Previously opposing Saudi Arabia’s push for a hike, Russia eventually agreed with other members to raise output by 411,000 barrels per day for July, marking the third consecutive month of increased supply. Despite global oil price volatility—plunging from over $80 to the $60s amid Middle East tensions and a ceasefire—Saudi Arabia remains focused on regaining market share. Russia, though supportive of further hikes, faces reduced benefits due to a strong ruble eroding oil revenue. Signs of unity between Russia and Saudi Arabia were showcased at the St. Petersburg International Economic Forum, where Rosneft CEO Igor Sechin backed the OPEC+ strategy. Russia’s oil sector is technically prepared for an August output hike, pending government approval.

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Russia to Boost ESPO Oil Exports from Kozmino by 7.5% in July

Russia will increase ESPO Blend crude oil exports from its Kozmino port to 4 million metric tons (approx. 970,000 barrels per day) in July, up 7.5% from 3.6 million tons in June, as per trader sources. June volumes were lowered due to scheduled maintenance, while May saw higher exports at 4.2 million tons. The route’s capacity has recently expanded, enabling Russia to maintain export levels near 4 million tons in the coming months. Kozmino serves as Russia’s key oil export terminal in the Far East, offering direct access to China, the largest ESPO buyer. With EU sanctions in effect since late 2022, Russia has shifted focus toward Asia, particularly China and India, for its oil sales.

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Indian Private Refiners Dominate Russian Urals Oil Purchases in 2025

India has purchased 80% of Russian seaborne exports of its flagship crude grade, Urals, so far this year, with private refineries Reliance Industries and Nayara Energy accounting for 45% of shipments. Reliance, now the world’s largest single buyer of Urals, has a 10-year deal to import up to 500,000 barrels per day from Russia, with Urals making up 36% of its crude purchases—up from 10% in 2022. Nayara also significantly increased its Urals intake, which now constitutes 72% of its crude sourcing. In contrast, India’s major state-owned refiners have avoided long-term Russian contracts and face currency limitations. The strong demand from private players has tightened Urals supply and reduced spot discounts against Brent crude for state-owned refiners. Meanwhile, state refiners like Hindustan Petroleum are diversifying purchases toward African crudes, anticipating increased Middle Eastern supplies, especially from Saudi Arabia, as OPEC+ seeks to regain market share.

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Tanker Traffic Resumes Through Hormuz as Ceasefire Calms Regional Tensions

Several VLCCs and product tankers that had diverted course amid heightened Iran-Israel tensions are now resuming transits through the Strait of Hormuz following signs of a ceasefire. Cosco Shipping’s Coswisdom Lake and Sinokor’s South Loyalty, which earlier turned back or anchored outside the strait, have resumed their voyages to the UAE and Iraq’s Basra terminal, respectively. Other vessels, such as Mitsui OSK’s Kohzan Maru and Alterna Capital’s Marie C, have also adjusted course back toward key Gulf destinations. AIS data confirms movements through or near Hormuz are cautiously restarting, though foreign-flagged tankers are still favoring routes closer to Oman while Iranian-flagged ships use domestic waters. Industry sources caution that operators are timing entries to coincide closely with scheduled loadings, and traders remain on alert for potential delays.

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Hanwha Ocean Wins Tsakos Order for Up to Three VLCC Newbuilds

Hanwha Ocean has secured a letter of intent from Greek tanker owner Tsakos Energy Navigation (TEN) for up to three LNG-ready VLCC newbuildings, ending TEN’s long hiatus in the VLCC newbuilding market. The deal includes two firm conventionally fueled 320,000-dwt vessels with an option for a third. Hanwha outcompeted Samsung Heavy Industries and HD Hyundai by offering a lower price range of $123m–$125m per ship and earlier delivery slots in 2027. The order reflects a slight drop in VLCC newbuilding prices, compared to a recent $127m deal at HD Hyundai. TEN aims to expand its VLCC fleet, currently just three out of about 80 vessels, betting on strong long-term demand from major oil companies amid geopolitical tensions and increased OPEC+ production, which could support healthier freight rates.

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Teekay Tankers Offloads Ninth Ship of 2025 Amid Continued Fleet Restructuring

Teekay Tankers has sold the 105,200-dwt Limerick Spirit (built 2008) to a Greek buyer for $27.8 million, marking the ninth vessel sale by the company this year as part of its ongoing divestment strategy. The Vancouver-based owner has already offloaded several ships, including three 2009-built suezmaxes to Dynacom Tankers for nearly $103 million, two LR2s — Donegal Spirit (2006) and Galway Spirit (2007) — to IMS for over $52 million, and two additional suezmaxes to a Nigerian buyer. The Limerick Spirit deal aligns with recent market values, with VesselsValue placing the vessel at $28.3 million and MSI Horizon suggesting a range of $24.1 million to $28 million. Despite softening from last year's highs, LR2 values have remained steady in recent months, with 10-year-old aframaxes holding firm at $52.5 million since February.

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Shell Denies BP Takeover Talks Amid WSJ Report

Shell has firmly denied reports from the Wall Street Journal claiming it is in early-stage discussions to acquire rival BP. A Shell spokesperson reiterated the company’s focus on internal performance and shareholder returns, while BP declined to comment. Although BP's shares have underperformed — dropping 23% over the past year versus Shell's 8% gain — Shell CEO Wael Sawan has repeatedly stated the company has a high threshold for large acquisitions. BP’s market value stands at nearly $80 billion with $27 billion in net debt, compared to Shell’s $208 billion valuation. If such a deal were pursued, it would mark one of the largest in energy history, rivaling the shelved Exxon-Chevron talks during the pandemic. Regulatory scrutiny and valuation complexities make any potential tie-up uncertain.