Oil Prices Climb 3% as Iran Halts Nuclear Cooperation, US-Vietnam Reach Trade Deal

Oil prices surged 3% on Wednesday, with Brent closing at $69.11 and WTI at $67.45 per barrel, driven by geopolitical tensions after Iran suspended cooperation with the UN nuclear watchdog. The move, seen as a signal of escalating tensions, added a geopolitical risk premium to the market. A surprise US-Vietnam trade deal also boosted market sentiment. However, gains were capped by an unexpected 3.8 million-barrel rise in US crude inventories and weak gasoline demand during peak driving season. OPEC+ plans to raise production by 411,000 bpd in August, though total exports remain steady. Analysts now await the US jobs report, which may influence Fed rate decisions and future oil demand.

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Ships in Strait of Hormuz Use Unusual AIS Messages to Signal Non-Western Ties

As tensions persist in the Middle East Gulf despite a ceasefire between Israel and Iran, vessels transiting the Strait of Hormuz have begun broadcasting unusual AIS messages to emphasize non-Western ownership or cargo, aiming to reduce the risk of attacks. This behavior, previously common in the Red Sea during Houthi attacks, is newly observed in the Gulf region. Shipowners are concerned that the complex ownership chains in shipping make it difficult to clearly identify nationalities, especially those from countries like the US, UK, and Israel, which face higher security threats. Between June 12 and 24, 55 ships sent over 100 atypical AIS messages, including terms like “China-owned,” “Russian crude,” and “Vsl no link Israel.” Some vessels explicitly broadcast details about their crew nationality or cargo origins, signaling a protective strategy to avoid targeting. Although tanker rates surged during the conflict, shipping activity in the region is now normalizing, but vessels remain cautious amid ongoing security risks.

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Major Chinese Ports Continue Iranian Oil Imports Amid US Sanctions

Several of China’s largest ports—including those around Qingdao, Dalian, and Zhoushan—have imported nearly 1.4 million bpd of Iranian crude in the first half of 2025, undermining US sanctions efforts. In June alone, Qingdao-area ports received about 15.5 million barrels, worth nearly $1 billion at discounted prices. Despite official Chinese customs data showing no Iranian imports since mid-2022, Iranian oil is transferred through complex tanker routes involving sanctioned vessels and ship-to-ship transfers to evade sanctions. China’s pragmatic stance and economic need for discounted crude sustain these flows, with US enforcement primarily targeting tankers rather than major ports or refineries. Only one Chinese port terminal has been blacklisted, signaling caution to avoid widespread disruption. This oil supports China’s large private refining sector, which faces tight profit margins amid economic slowdown.

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Chevron, TotalEnergies Among Global Majors Bidding in Libya’s First Oil Tender Since 2011

Libya has launched its first energy exploration tender since the 2011 civil war, attracting major oil firms including Chevron, TotalEnergies, Eni, and ExxonMobil among 37 interested companies. The state-run National Oil Corp (NOC) is offering 22 onshore and offshore blocks, aiming to sign contracts by the end of 2025. Libya seeks to increase oil production to 2 million bpd by 2030, up from its current 1.4 million. The NOC is pursuing a $3 billion development budget to boost output and revitalize damaged infrastructure. Despite vast reserves, Libya remains dependent on fuel imports, with recent shortages tied to discontinued crude-for-fuel swaps. The government has allocated $3.7 billion for fuel imports in 2025, though actual needs may exceed that amount.

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Russian Diesel Exports Dip in June Amid Refinery Maintenance

Russia’s seaborne diesel and gasoil exports declined by 6% in June to around 3.35 million tons, driven by reduced refinery output during maintenance, according to LSEG data. Turkey increased its imports by 15% to 1.35 million tons, while Brazil's intake fell by one-third to 0.47 million tons. Exports to Africa also dropped 30%, with Morocco, Tunisia, Togo, and Egypt as leading buyers. Additionally, about 240,000 tons of Russian diesel remain in ship-to-ship transfers near Limassol, Cyprus, awaiting further orders. Another 230,000 tons loaded in May are still marked "for orders," with discharge destinations yet to be finalized.

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India Plans New Strategic Oil Reserves to Strengthen Energy Security

India is considering the construction of three new strategic petroleum reserves to improve its emergency oil stockpile and enhance energy security, amid heavy reliance on oil imports. Feasibility studies are underway for proposed sites in Bikaner, Mangalore, and Bina, with storage capacities ranging from 1.75 to over 5 million tons. These projects would supplement existing reserves and previously approved expansions in Padur and Chandikhol. India aims to hold 90 days' worth of oil consumption, aligning with International Energy Agency (IEA) membership requirements. The country currently has reserves sufficient for 75 days. The move also reflects India’s growing fuel demand and policy shift towards allowing private sector participation in oil storage.

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Glencore in Talks with UK Government Over Lindsey Refinery Amid Insolvency

Glencore is reportedly in discussions with the UK government regarding its crude supply contract with the now-insolvent Lindsey oil refinery, which was previously operated by Prax. The refinery’s collapse, along with its parent group’s, threatens hundreds of jobs and may increase Britain’s dependence on imported fuels. The government has launched an investigation into Prax’s leadership and insolvency circumstances. Glencore had replaced Trafigura as the refinery’s supplier in a 2024 deal. The Official Receiver is managing creditor and supplier relations, while government departments have not commented on the status of negotiations with Glencore. Authorities have committed to maintaining fuel supply continuity.

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VLCC Spot Rates Plunge as Summer Market Slows and Charterers Gain Upper Hand

VLCC spot rates have dropped sharply, falling over 50% from recent highs driven by Middle East geopolitical tensions. Clarksons reports a 6.5% daily rate decline to $33,500, with brokers signaling the start of the typical weak summer season. An oversupply of available vessels—157 VLCCs expected in the Middle East Gulf next month—gives charterers abundant choice and bargaining power. Fixture volumes have decreased significantly, with recent voyage rates falling to as low as $18,700 per day for key Middle East to Asia routes. The sluggish West-East arbitrage and lack of volume growth suggest rates are unlikely to rebound soon.

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Pertamina Seeks $700 Million Offshore Loan for Fleet Expansion Amid Corruption Probe

Indonesia’s state-run energy company Pertamina and its shipping arm are seeking a $700 million offshore loan to fund new vessel construction, targeting a tenor of around ten years, according to sources familiar with the deal. The financing aims to support Pertamina International Shipping’s fleet investment plans to boost logistics and business growth. While talks with banks are still in early stages, this comes amid a resurgence in Indonesia’s offshore syndicated loan market. However, the effort is shadowed by a $12 billion corruption investigation involving Pertamina, with arrests and international cooperation requests already underway. Despite this, Pertamina continues to tap global markets, following a $185 million loan in 2023 and a $1.2 billion facility secured by its upstream unit last week.