Oil Dips on Ceasefire and Output Concerns, But Marks Second Straight Monthly Gain

Oil prices fell slightly on Monday due to easing geopolitical tensions and expectations of an OPEC+ production hike, despite both Brent and WTI benchmarks posting monthly gains of around 6% and 7%, respectively. Brent futures settled at $67.61 per barrel, while WTI closed at $65.11, reflecting market caution after a 12-day Israel-Iran conflict briefly pushed prices above $80. The ceasefire has led to the rapid withdrawal of supply risk premiums, contributing to the recent price slide. U.S. crude production hit a record 13.47 million bpd in April, adding further bearish pressure. OPEC+ is reportedly set to increase output by 411,000 bpd in August, which would bring the total 2025 supply boost to 1.78 million bpd—more than 1.5% of global demand. Despite rising supply, some analysts warn that market tightness persists, and Brent is forecast to average $67.86 in 2025, with WTI at $64.51.

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U.S. Crude Oil and Natural Gas Output Hit Record Highs in April: EIA

U.S. crude oil production reached a record 13.47 million bpd in April, up slightly from March’s 13.45 million bpd, according to the Energy Information Administration (EIA). Texas led the surge with a 1.8% output rise to 5.77 million bpd, its highest since November, while New Mexico saw a 3.4% decline to 2.19 million bpd. U.S. petroleum demand also climbed, with total products supplied increasing by 263,000 bpd to 20.21 million bpd. Gasoline demand hit 8.91 million bpd—its highest since October—while distillate fuel demand slightly dipped to 3.88 million bpd. Gross natural gas production in the lower 48 states also hit a record 120.31 billion cubic feet per day (bcfd), driven by Texas’s new high of 37 bcfd. In contrast, Pennsylvania’s gas output fell slightly by 0.5% to 21.12 bcfd.

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Trump Pressures Japan on Auto Trade, Urges More U.S. Oil Imports to Cut Deficit

President Donald Trump criticized Japan’s automobile trade as "unfair," urging Tokyo to increase imports of U.S. oil and other goods to help reduce the trade deficit. In a Fox News interview, Trump claimed Japan exports millions of cars to the U.S. while restricting American auto sales in Japan. He warned that without a deal, Japan faces a 24% reciprocal tariff starting July 9. Japanese automakers are already subject to a 25% tariff that is impacting the country’s manufacturing sector. Trump emphasized that Japan "understands" the trade imbalance and said U.S. energy exports, especially oil, could help balance it. Last year, automobiles made up 28% of Japan’s $145 billion in exports to the U.S.

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Chevron to Exit Aberdeen as Part of $3 Billion Global Restructuring Plan

Chevron will close its Aberdeen, Scotland office between December 2025 and December 2026, ending its decades-long presence in the city. The move follows the company’s decision last year to exit the UK North Sea oil and gas sector after over 55 years, citing a shift toward more profitable global assets. The closure is part of Chevron’s broader plan to cut up to $3 billion in costs and lay off up to 20% of its workforce. While the Aberdeen closure marks a significant pullback, Chevron will retain a UK presence through its London office. The company has not disclosed how many jobs will be affected by the Aberdeen shutdown. The restructuring comes amid efforts to improve Chevron’s competitiveness after falling behind industry peers.

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UK’s Lindsey Oil Refinery Faces Liquidation Amid Mounting Losses and Refining Sector Decline

The Lindsey Oil Refinery in northern England, owned by Prax Lindsey Oil Refinery Ltd., is facing liquidation, threatening over 400 local jobs and further reducing the UK’s domestic refining capacity. The refinery, which recorded £501 million ($688 million) in retained losses, is under a winding-up order, along with associated entities Prax Storage Lindsey Ltd. and Prax Terminals Killingholme Ltd. While upstream and retail operations remain outside insolvency, options including asset sales are being considered. The closure would leave the UK with only four operating oil refineries, down from 18 in the 1970s, following the recent shutdown of Grangemouth in Scotland. Analysts warn the UK will become increasingly reliant on fuel imports, heightening vulnerability to price shocks and supply chain disruptions. The government has pledged to explore all potential future uses of the site and support impacted workers and communities.

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15 European Nations Set Historic Ban on Ship Scrubber Discharges in Coastal Waters

Fifteen European countries in the Ospar group have agreed to a landmark ban on ship scrubber discharges in coastal waters to protect marine ecosystems. The ban will be phased in, with open-loop scrubber discharge prohibited from July 2027 and closed-loop discharge banned starting January 2029. While some nations pushed to extend the ban to all territorial waters, full consensus wasn’t achieved. This is the first regional regulation targeting scrubber discharges and is seen as a major precedent for global maritime environmental standards. Environmental groups praised the decision, emphasizing that scrubber wastewater harms marine life and coastal communities. As of 2023, 45 jurisdictions globally had already enacted bans or restrictions on scrubber discharges, indicating growing international support for cleaner shipping practices.

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Equinor Strikes New Oil Discovery at Johan Castberg Field in Arctic Barents Sea

Equinor has announced a new oil discovery at its Johan Castberg field in the Arctic Barents Sea. The find is estimated at 9 to 15 million barrels of oil, according to the Norwegian Offshore Directorate. This comes shortly after the Johan Castberg field began full-capacity production. Equinor stated that the new discovery could add to the field’s reserves. Equinor operates the field with a 46.3% stake, while Vår Energi holds 30% and Petoro owns 23.7%. The discovery supports further development potential in Norway's Arctic oil region.

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VLCC Freight Rates Collapse $100,000 Amid Middle East Ceasefire, Returning to Pre-Conflict Levels

The VLCC freight market swung sharply back in favor of charterers after the ceasefire between Israel and Iran, causing rates to plunge from above $110,000 per day to as low as $13,000 per day for some older vessels. Spot rates on the Middle East Gulf to China route dropped about $40,000 in a single day, settling near $27,000 per day (WS 50), reflecting the most volatile period this year. Modern tanker supply has surged over 30% in the past week, exacerbating rate declines and pressuring owners. Owners chartered vessels at rates between $13,000 and $37,000 daily, far below the peak levels witnessed earlier in the week. The ceasefire significantly reduced geopolitical risks, and low cargo inquiries for mid-July have further softened market demand. Although rates have bottomed near pre-conflict levels, some owners are expected to resist further reductions, with a modest increase in tanker transits and cargo pickups potentially signaling a near-term rebound.

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Traders and Oil Majors Retreat from Term Charters Amid Tanker Market Volatility

Recent volatility in the tanker market has caused several suezmax and aframax period charter deals to collapse, as traders and oil majors adopt a more cautious stance. While VLCCs have seen sharper swings, spot earnings for suezmaxes and aframaxes still rose 12% and 18% respectively over the past month—before beginning to decline. London broker Alibra Shipping said the market has "come right off," and Braemar noted the easing of Middle East tensions has created uncertainty in the period market. Notable failed fixtures include ExxonMobil’s 18-24 month charter of Pantheon Tankers' Sea Garnet at $33,000/day and Mercuria’s higher-rate deal for NGM Energy’s Otis at $38,000/day. Two aframax charters—both at $35,000/day involving Aljalaa and Blue Sea—also collapsed. Current assessments put one-year suezmax and aframax charters at $37,500 and $32,250/day, respectively, reflecting market hesitancy amid declining spot rates.

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Explosion Hits George Economou’s Tanker, Cargo to Be Transferred in Greece

A Greek-owned suezmax tanker, Vilamoura (157,700 dwt, built 2011) operated by George Economou’s TMS Tankers, was severely damaged by an engine room explosion roughly 12 hours after departing Zueitina, Libya, with 1 million barrels of crude oil bound for Gibraltar. Water ingress occurred but no injuries were reported. The Marshall Islands-flagged tanker is being towed to Greece’s Peloponnese region for a ship-to-ship cargo transfer, while divers will inspect the damage to determine the cause. Though a mine strike was initially suspected, TMS Tankers dismissed this, and officials have not confirmed any hostile activity. The operator also rejected theories of sabotage. This incident follows a pattern where at least five vessels that called at Russian ports were damaged by suspected underwater explosives.

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Indian Scrap Demand and Regulation Set to Reshape Tanker Recycling Market

Tanker recycling may be poised for resurgence, driven by India’s rising demand for scrap metal and the enforcement of the Hong Kong Convention. Despite being the world's second-largest steel producer, India only uses 20% scrap in its steel production—far below the 60-70% seen in the US, Europe, and Turkey—offering significant growth potential. Poten & Partners noted that tanker scrapping nearly halted post-2022, as older ships diverted to the shadow fleet serving Russian trade amid sanctions. With many of those vessels aging, future scrapping depends heavily on market freight rates; owners will likely only scrap if profits decline. The newly enacted Hong Kong Convention mandates vessels be recycled at certified facilities with proper documentation and surveys, potentially increasing compliance costs. BIMCO estimates 16,000 ships totaling 700 million dwt will be scrapped over the next decade—double the number and triple the tonnage of the previous 10 years—underscoring the urgent need for investment in compliant recycling infrastructure.

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US LPG Export Surge Could Drive Demand for Up to 16 VLGCs Amid Steady Freight Rates

VLGC (Very Large Gas Carrier) spot rates have remained firm despite the recent ceasefire between Israel and Iran, with Ras Tanura–Japan rates at $65,000/day and Houston–Japan holding at $54,000/day. Analysts at Fearnley Securities project that increased output from the US—particularly from Energy Transfer’s Nederland terminal, capable of exporting 700,000 barrels/day—could add seven to eight additional propane cargoes, translating to demand for 14–16 VLGCs. This outlook is bolstered by strong US LPG production and limited global fleet growth, suggesting tightening supply-demand fundamentals. While rates in Asia dropped slightly following the easing of geopolitical tensions, the Western market is expected to stay stable due to limited vessel availability in July. VLGC spot rates had surged to over $70,000/day in mid-June, the highest in 12 months, due to regional conflict risk premiums. Analysts see strong risk/reward potential for listed VLGC owners like BW LPG given current freight earnings and bullish fundamentals.

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Sovcomflot to Launch First Russian-Built Ice-Class LNG Carrier for Arctic LNG 2 Project

Sovcomflot is preparing to operate the Alexey Kosygin, Russia’s first domestically built ice-class LNG carrier, with final trials scheduled for the end of this month and deployment expected in the second half of 2025. The 172,600-cbm vessel, built at the Zvezda Shipbuilding Complex, will support Novatek’s Arctic LNG 2 project, which has faced export delays due to international sanctions and a lack of ice-class gas carriers. The vessel is already under U.S. sanctions. Russia plans to construct 15 Arc7-class LNG carriers at Zvezda for the Arctic LNG 2 plant, which began partial operations at the end of 2023. Zvezda recently delivered its first Arc6-class ice-class shuttle tanker, Valentin Pikul, built in partnership with Samsung Heavy Industries and also under U.S. sanctions. These developments signal Russia's efforts to build a self-reliant Arctic energy shipping fleet amid global trade restrictions.