Oil Prices Edge Up Amid Strong Demand Signals and Anticipation of OPEC+ Output Decision

Oil prices rose modestly on Tuesday, with Brent crude closing at $67.11 per barrel (+0.6%) and WTI at $65.45 (+0.5%), driven by signs of strong demand and cautious optimism ahead of the OPEC+ meeting on July 6. A rebound in China’s factory activity in June and expectations that Saudi Arabia will raise crude prices for Asia supported the bullish sentiment. Investors are watching closely as OPEC+ is expected to approve another 411,000 barrels-per-day output hike for August, continuing its recent trend of aggressive supply increases. Saudi Arabia's June oil exports surged to a one-year high, and U.S. shale production hit record levels in April, adding competitive pressure. Kazakhstan has again breached its OPEC+ production limits, fueling internal cartel tensions. Meanwhile, global markets remain watchful of U.S. trade developments as President Trump’s July 9 tariff deadline nears, potentially affecting broader economic conditions and energy demand.

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Saudi Arabia Likely to Raise August Oil Prices to Asia to 4-Month High

Saudi Arabia is expected to increase its August official selling prices (OSP) for crude oil to Asia to the highest level since April, amid strong summer demand and recent oil market volatility driven by the Iran-Israel conflict. The flagship Arab Light crude OSP could rise by $0.50 to $0.80 per barrel, reaching between $1.70 and $2 over Oman/Dubai benchmarks. Similar increases are expected for other Saudi grades. Although spot prices have cooled after a ceasefire, refiners are requesting more term supplies as they ramp up production. Rising OPEC+ output — including a planned 411,000 bpd hike for August — may limit further price gains. Saudi Aramco, which bases its OSPs on product yields and market trends, is expected to announce the new prices after the July 6 OPEC+ meeting.

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Kazakhstan Hits Record Oil Output in June, Defying OPEC+ Quotas Amid Tengiz Expansion

Kazakhstan’s crude oil production surged 7.5% in June to 1.88 million bpd, matching its all-time high from March and far exceeding its OPEC+ quota of 1.5 million bpd. Total oil and condensate output reached 2.15 million bpd, driven by a sharp increase at the Chevron-led Tengiz field, which jumped from 813,200 bpd in May to 953,000 bpd. The $48 billion expansion at Tengiz is fueling continued growth, though Kazakhstan’s persistent overproduction has drawn criticism from fellow OPEC+ members. Despite affirming commitment to OPEC+, Kazakhstan has prioritized national interests and is now expected to exceed its annual oil production forecast by about 2%. This behavior has contributed to OPEC+’s shift toward faster output increases and market-share competition. The group, including Kazakhstan, will meet on July 6 and is expected to approve a 411,000 bpd hike for August.

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Mexico’s Oil Exports Collapse to Record Low Amid Pemex Crisis and Refining Shift

Mexican oil exports plunged to a record low of 529,000 bpd in June, as national production hits its lowest level since 1979. Aging fields, lack of new major discoveries, and financial troubles at Pemex have severely limited output, which is averaging just 1.621 million bpd in 2025. The ramp-up of Mexico’s Dos Bocas refinery has further cut the volume of crude available for export. U.S. refiners, particularly reliant on Mexican heavy crude, are now facing supply constraints as alternative sources like Venezuela and Canada are also restricted. Pemex’s $20 billion in unpaid supplier debts have triggered contract suspensions and local protests, compounding operational disruptions. The company plans to announce a new strategic roadmap in the coming weeks following a nearly $30 billion loss last year.

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Russian ESPO Oil Premiums Stay Firm as Chinese Demand Remains Strong Despite Rising Iranian Supply

Premiums for Russia’s ESPO Blend crude oil, delivered from Kozmino port in late July and early August, are holding above $2 per barrel over ICE Brent, supported by strong Chinese demand and favorable refining margins. Despite China’s rising Iranian oil imports—surging to over 1.8 million bpd in June—Chinese refiners continue to value ESPO for its high quality and short delivery time. July ESPO loadings are set to increase to 4 million metric tons (approx. 970,000 bpd), up from 3.6 million tons in June. A possible drop in Russia's Sokol grade exports due to refinery maintenance may further support ESPO prices. Traders say Iranian supply levels could influence ESPO demand, but China’s independents are likely to maintain interest regardless. While U.S. President Trump reaffirmed sanctions on Iran, he also hinted at selective easing, allowing continued Chinese purchases of Iranian crude following the Israel-Iran ceasefire.

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MOL Completes $1.7 Billion Acquisition of LBC Tank Terminals to Boost Chemical Logistics and Next-Gen Energy Business

Mitsui OSK Lines (MOL) has finalized its $1.715 billion acquisition of Netherlands-based LBC Tank Terminals Group Holdings, a move aimed at diversifying MOL’s portfolio by expanding stable, non-shipping revenue streams. LBC specializes in the storage and handling of bulk liquids, including petrochemicals and petroleum products, across Europe and the US. This purchase complements MOL’s prior acquisitions of Nordic Tankers and Fairfield Chemical Carriers, enhancing its chemical logistics capabilities by integrating tank storage services alongside marine transport. MOL plans to leverage LBC’s operations to accelerate its next-generation energy business—particularly in ammonia and CO2 transportation—supporting its Blue Action 2035 vision of becoming a global social infrastructure company. MOL’s CEO, Takeshi Hashimoto, highlighted the strategic synergy between MOL’s global network and LBC’s terminal expertise to drive growth and create new customer and societal value.

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Trump Ends Broad Syria Sanctions but Retains Key Assad-Linked Shipping Firms on US Blacklist

President Donald Trump has lifted major US sanctions on Syria, removing over 500 individuals and entities from the blacklist following a shift in the Syrian government’s leadership. However, 139 individuals and companies—particularly those tied to former President Bashar al-Assad’s regime—remain sanctioned. Among them are shipping companies like Lebanon’s Sallizar Shipping SAL and Al-Layth Alzahabe Transportation & Shipping Services, linked to Assad-era officials and accused of supporting the regime’s infrastructure. While several Syrian maritime agencies and associated entities were delisted to help Syria reconnect with global trade, the US Treasury stressed it will continue to monitor and block actors threatening regional stability. This move reflects a partial easing aimed at encouraging Syria’s reintegration into the global economy while maintaining targeted pressure on regime-linked entities.

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Scrubber Ban Sparks Backlash from Shipowners Over Scientific Validity and Regulatory Overreach

Shipowners and scrubber technology advocates are strongly opposing a landmark decision by 15 European nations under the Ospar convention to ban overboard discharges from ship scrubbers in coastal waters. The ban will phase in from 2027 for open-loop systems and from 2029 for closed-loop types. Environmental groups welcomed the move, citing concerns over toxic substances being released into the ocean. However, the Clean Shipping Alliance (CSA)—whose members include Carnival, Torm, and DFDS—criticized the decision as “unfortunate and unnecessary,” arguing that there is no credible scientific evidence showing environmental harm. CSA chairman Mike Kaczmarek accused Ospar of ignoring a growing body of studies demonstrating scrubber discharge safety. He warned that the ban sets a precedent for regional rules that undermine global maritime regulations established by the IMO.

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Asian MR Tanker Rates Spike Amid Surge in Clean Product Shipments and Regional Refinery Outages

MR tanker rates in Asia have surged, with lump sum payments from South Korea to Singapore rising to $730,000—equivalent to $28,000 per day—amid the highest clean product export levels since January. Sentosa Ship Brokers reports a sharp increase in intra-Northeast and Northeast-to-Southeast Asia trades, driven partly by refinery outages at the Philippines' 180,000 bpd Bataan and Vietnam's 200,000 bpd Nghi Son facilities. While MR voyages to the U.S. West Coast have slowed, long-term demand is expected to recover due to refinery closures in the region, with lump sum rates currently at $1.75 million ($26,000/day). Tanker availability is tightening in Asia, suggesting further rate increases, though recent rate collapses in the Middle East—where freight levels dropped WS 100—may dampen sentiment. Oceania-bound shipments remain seasonally weak, as is typical during the southern winter.

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LNG Canada Launches First Export Cargo, Marking Historic Entry into Global LNG Market

LNG Canada shipped its first export cargo on July 1—Canada Day—signaling the country's official entry into the global LNG market. The 174,000-cbm GasLog Glasgow, operated by Shell, departed from the 14-million-tonnes-per-annum (mtpa) two-train facility in Kitimat, British Columbia. Backed by a joint venture including Shell (40%), Petronas (25%), PetroChina and Mitsubishi (15% each), and Kogas (5%), LNG Canada represents the largest private-sector investment in Canadian history. Shell emphasized LNG’s critical role in the global energy transition, especially in Asia, where demand is projected to grow 60% by 2040. Canadian officials praised the project for helping diversify trade, support Indigenous partnerships, and lower global emissions. The first LNG production occurred just days before, following a March commissioning cargo.

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US Senate Budget Bill Delivers Major Setback to Wind and Solar Projects Despite Last-Minute Revisions

The U.S. Senate passed a sweeping budget bill that, despite some eleventh-hour changes, significantly curtails the future of wind and solar energy development. Though a proposed excise tax on renewables was removed after pressure from key Republican senators, the bill still imposes a strict phaseout of tax credits: projects must begin construction before 2026 and be in service by end-2027 to qualify. Critics, including Evergreen Action and the Coalition for Community Solar Access, warn the bill could spike utility prices, halt thousands of renewable projects, and result in the loss of 2.3 million jobs and 300 GW of future electricity capacity. While it introduces a new tax credit for coal used in steelmaking, the bill preserves incentives for hydrogen, nuclear, geothermal, hydropower, and carbon capture. Industry leaders argue the bill jeopardizes billions in investment and threatens energy grid stability amid growing demand from AI and data centers. The legislation now heads back to the House for final consideration.

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India Ends Key Transmission Subsidy, Pressuring Clean Energy Sector

India has officially ended a major subsidy that previously exempted renewable energy projects from inter-state transmission charges, despite strong lobbying from the solar and wind industries. New projects commissioned after June must now pay 25% of transmission costs, with rates set to rise further, potentially increasing tariffs by 16%. This move adds pressure to a clean energy sector already facing low demand and difficulties securing long-term purchase agreements. Nearly 30 GW of upcoming capacity is struggling to find buyers, threatening India's 2030 target of 500 GW of renewables. The policy may shift project development away from resource-rich states toward localized production within each state. Southern states like Karnataka are already planning to rely more on local generation to avoid new charges and trading fees.