Oil Prices Dip Amid Tariff Uncertainty and Looming OPEC+ Output Increase

Oil prices slipped on Thursday due to investor concerns over U.S. tariff uncertainties and expectations of an OPEC+ production hike. Brent crude settled at $68.80 and WTI at $67 per barrel, amid thin trading before the U.S. Independence Day holiday. The end of President Trump’s 90-day tariff pause on July 9 raises fears of weakened global fuel demand. Meanwhile, OPEC+ is anticipated to boost output by 411,000 bpd this weekend. Weaker Chinese service data and a surprise build in U.S. crude inventories added to demand concerns. Despite stronger-than-expected U.S. job data, economic resilience remains in question due to slowing private sector growth and ongoing trade tensions.

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Trump Administration Targets More Tankers in Crackdown on Iran’s Shadow Fleet

The U.S. Treasury Department expanded sanctions against Iran’s “shadow fleet” of tankers, blacklisting multiple vessels and companies involved in transporting Iranian oil and LPG. Among the targets were two VLCCs, an LR2 product tanker, and a large gas carrier linked to Iran’s National Iranian Tanker Co and the Syrian-based Al-Qatarji conglomerate, accused of aiding the Iranian Revolutionary Guard and Houthi militants. The move aims to disrupt Iran’s oil revenues by targeting non-sanctioned vessels used for ship-to-ship transfers to evade sanctions. The Treasury also sanctioned a Singapore-based pilot service provider assisting these fleets. This marks another step in the Trump administration’s ongoing effort to tighten the economic pressure on Tehran’s oil exports and affiliated networks.

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Sanctioned Iraqi-Controlled VLCC Operator Linked to Major Shipowners and Oil Companies

The Iraqi-controlled VLCC operator VS Tankers, recently sanctioned by the U.S. Treasury, maintains charter relationships with prominent shipowners and oil companies. Key players include Greece’s Navios Maritime Partners, South Korea’s Sinokor Merchant Marine, and Japan’s Shoei Kisen Kaisha. Notably, Sinokor has a three-year time charter for the 321,000-dwt VLCC Dijilah, currently on a voyage for ExxonMobil. Navios controls several VS Tankers vessels on long-term bareboat charters, with some ultimately owned by Shoei Kisen. One VLCC, the Erbil, is also linked to major Chinese refiner Unipec through a three-year charter contract. The U.S. sanctions target the network for disguising Iranian oil as Iraqi through blending and ship-to-ship transfers, highlighting complex ties between sanctioned fleets and mainstream maritime players.

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U.S. Sanctions Iranian Oil Smuggling Network and Hezbollah-Linked Bank

The U.S. Treasury imposed new sanctions on Thursday targeting a smuggling network that disguises Iranian oil as Iraqi, and a Hezbollah-linked financial institution. The network, led by Iraqi-British national Salim Ahmed Said, has moved billions in Iranian oil since 2020 using forged documents and blending tactics via Iraq and the UAE. The U.S. also sanctioned several tankers and senior officials tied to Hezbollah’s Al-Qard Al-Hassan bank. These actions follow recent U.S. airstrikes on Iranian nuclear sites and aim to intensify economic pressure on Tehran and its proxies.

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Russia's ESPO Oil Freight Rates to China Drop to 7-Month Low

Freight rates for shipping Russia’s ESPO Blend crude from Kozmino to China have fallen to $1.9 million per Aframax tanker, the lowest since December 2024. The drop is attributed to increased tanker availability and reduced June exports, which fell to 3.6 million tons due to maintenance. This decline benefits Russian exporters by lowering shipping costs and raising profit margins. Rates had spiked to over $6 million earlier in 2024 following U.S. sanctions on Russian oil and shipping firms. Traders say pre-sanctions freight levels under $1.5 million may return if no new restrictions are introduced.

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ADNOC Restores Most Murban Crude Supply to Equity Partners for July

Abu Dhabi National Oil Company (ADNOC) has reinstated most of the Murban crude oil volumes to equity holders for July after earlier planning cuts of 3–4 million barrels amid the Israel-Iran conflict. Equity partners—including BP, TotalEnergies, CNPC, Inpex, Zhenhua Oil, and GS Energy—are entitled to about 40% of ADNOC Onshore’s 2.1 million bpd production. ADNOC stated that it maintained uninterrupted supply to long-term customers and did not cancel Murban sales contracts or nominations for June and July. Japan, Thailand, and India are key importers of the grade.

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Shandong Boosts Fuel Oil Tax Rebates to Support Struggling Independent Refineries

China's Shandong province has raised fuel oil import tax rebates for six independent refiners—Chambroad Petrochemicals, Hongrun Petrochemical, Lihuayi Group, Xinyue Group, Shandong Jincheng Petrochemical Group and Xintai Petrochemical—to help improve margins amid weak fuel demand and rising costs. The consumption tax rebate was increased by 25 percentage points to 75–95% for gasoline and diesel refined from imported fuel oil. This move follows recent import tariff hikes and rebate cuts that led to record-low fuel oil imports. Analysts expect the policy to raise refinery run rates and demand for high-sulphur fuel oil, though near-term gains may be limited as crude remains cheaper. Teapots remain major buyers of discounted Russian and Iranian oil.

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Venezuela Boosts Oil Exports to China Amid Loss of U.S. and European Markets

Venezuela’s crude and fuel exports rose to about 844,000 bpd in June, up 8% from May, driven largely by increased shipments to China. This shift comes after the U.S. ended licenses allowing PDVSA partners like Chevron and Repsol to send Venezuelan crude to U.S. and European refineries. The state oil company has relied on lesser-known intermediaries to sell crude, including Boscan heavy crude previously destined for the U.S. Exports to China, both direct and via trans-shipment hubs, accounted for roughly 90% of June’s total, up from 75% in May. Venezuela also shipped smaller volumes to Cuba, Europe, and India. The rise in Boscan crude exports helps PDVSA avoid production cuts at the Boscan oilfield, a key asset. PDVSA did not import any diluents in June after pre-filling storage tanks prior to license cancellations.

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China Avoids US Oil for 3rd Month, Longest Stretch Since 2018

China did not purchase any US crude oil in May 2025, marking the third consecutive month of avoiding American barrels — the longest gap since 2018, according to US Census data. The move comes amid ongoing US-China trade tensions and contributes to US crude exports falling to a two-year low. The lack of Chinese demand is a setback for US shale drillers, who rely on foreign markets to sustain operations amid WTI prices falling below $70. While trade friction has eased somewhat, tariffs of up to 55% on Chinese goods remain, leaving the broader dispute unresolved.

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US Refiners Turn to Shale as Heavy Crude Supply Tightens

US refiners are increasingly dependent on domestic shale oil, consuming the lightest crude blend on record, according to government data. This shift stems from reduced heavy oil supplies due to lower production in Mexico, trade tensions with Canada, and a US ban on Venezuelan crude. At the same time, abundant global light oil—from the US, Guyana, and the North Sea—has narrowed the discount gap between heavy and light crudes from $7.70 to $3.25 per barrel. Major refiners like Marathon, Valero, and ExxonMobil are now favoring shale oil for its lower geopolitical risk and quick pipeline delivery, with domestic crude making up 61% of feedstock in 2024, a share expected to rise further.

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Alberta Oil Output Drops to Two-Year Low Amid Wildfires and Maintenance

Alberta’s oil production fell to 3.61 million bpd in May, the lowest since May 2023, due to wildfires and maintenance in the oil sands. Output dropped by 397,000 bpd, with oil sands production alone declining 384,000 bpd, reaching its lowest in over four years. Major producers like Cenovus, CNRL, and MEG Energy were forced to curtail up to 350,000 bpd. Despite this dip, Alberta’s year-to-date output remains higher than 2024 levels. The supply disruption has supported heavy crude prices, narrowing the discount of Western Canadian Select (WCS) to WTI to less than $10 a barrel, down from a five-year average of $15.

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Petrobras Backs Lula’s Economic Agenda With $5.5B Refining Investment in Rio

Petrobras will invest 30 billion reais ($5.5 billion) in refining and petrochemicals in Rio de Janeiro, supporting President Lula da Silva’s economic agenda focused on job creation and industrial revival. The package includes renewable fuel production, refinery upgrades, and a new sustainable aviation fuel plant. Over 38,000 jobs are expected from the projects. Nearly 9 billion reais will go to new ventures, while 20 billion reais support expansions in Duque de Caxias and Boaventura. An additional 4.3 billion reais will be invested in Braskem’s plastics hub, with no direct impact on Petrobras’s finances, according to Braskem’s CEO. This marks closer collaboration between Petrobras and Braskem as Petrobras seeks a larger managerial role.

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Petroecuador Halts SOTE Pipeline Pumping Amid Heavy Amazonian Rains

Petroecuador has temporarily suspended crude oil pumping through its SOTE pipeline due to heavy rains in Ecuador’s Amazonian Napo province, which have caused riverbank erosion threatening oil infrastructure. The suspension follows a similar halt on the OCP heavy crude pipeline. Petroecuador is constructing a bypass expected to restore SOTE operations within three days. Authorities are also considering building a longer-term bypass along the Coca River to relocate pipelines and nearby roads to prevent future disruptions. The SOTE pipeline’s capacity is up to 360,000 bpd, while OCP is currently operating below its 450,000 bpd capacity.

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Tankers International Sees Strong VLCC Market Recovery Amid Spot Trade Shift

Tankers International is optimistic about VLCC prospects despite recent rate declines, citing strong oil export volumes and a shift by owners toward spot market exposure. While Middle East-to-Asia spot rates have fallen to $27,700 per day—down 43% in a week—CEO Charlie Grey highlights robust Middle East Gulf activity and forecasts rate recovery as summer demand subsides and OPEC+ output aligns. Analysts at Breakwave Advisors note improving sentiment as the Strait of Hormuz remains open and Asian oil demand remains high, although excess vessel supply and rate normalization continue to weigh on the market.

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Second Russian LNG Carrier Navigates Northern Sea Route Amid Arctic LNG Scrutiny

Russia has dispatched a second Arc7 LNG carrier, Vladimir Voronin, via the Northern Sea Route (NSR) this summer, following Georgiy Ushakov—the season’s first eastbound LNG ship—now approaching Asia. Both loaded at Novatek’s Yamal LNG and are likely heading to China, despite not declaring destinations. Ice conditions in the eastern NSR remain challenging, limiting lower ice-class ship movements until August. Industry attention is also on the Iris, which recently became the first carrier to load from Novatek’s sanctioned Arctic LNG 2 plant. Russia’s LNG exports fell 4.4% year-on-year in H1 2025 due to tightening Western sanctions.