Oil Holds Firm Amid Strong U.S. Gasoline Demand, Red Sea Tensions, and Trump’s Tariff Plans

Oil prices remained steady on Wednesday, with Brent settling at $70.19 and WTI at $68.38, as markets balanced rising U.S. gasoline demand and renewed Red Sea attacks against looming copper tariffs. U.S. crude inventories unexpectedly rose by 7.1 million barrels, but gasoline demand jumped 6% to 9.2 million bpd, signaling resilient consumer usage. Red Sea instability re-emerged as two commercial vessels were attacked, leaving 15 crew members missing. Meanwhile, the EIA cut its 2025 U.S. oil production forecast, citing reduced drilling activity, which lent additional support to prices. Despite OPEC+ adding 548,000 bpd in August, ministers said inventories remain tight, suggesting the market is absorbing the supply without oversaturation.

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Six Crew Rescued, 15 Missing After Houthis Sink Greek Cargo Ship in Red Sea

Houthi militants attacked and sank the Greek-operated, Liberian-flagged bulk carrier Eternity C in the Red Sea, killing four crew members and leaving six rescued after more than 24 hours in the water, while 15 remain missing. The Iran-aligned Houthis claimed responsibility for the attack and reportedly kidnapped some survivors, prompting condemnation and calls for their immediate release from the U.S. and international shipping bodies. The attack follows a similar strike on another Liberian-flagged Greek ship, Magic Seas, which sank after all crew were safely rescued. These incidents mark a resurgence in Houthi attacks on maritime traffic since a brief lull earlier this year, severely disrupting shipping in the vital Red Sea route near Yemen. The number of daily vessel sailings through the Bab al-Mandab strait has dropped sharply, contributing to rising oil prices. Greek authorities are in diplomatic talks with Saudi Arabia regarding the incident, while EU naval forces and maritime security firms continue rescue and search operations.

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OPEC+ and Oil Majors Signal Robust Demand as Output Rises Absorb Quickly

Despite OPEC+ increasing output by 138,000 bpd in April, followed by 411,000 bpd hikes in May, June, and July and a planned 548,000 bpd rise in August, inventories have not increased significantly, indicating strong market demand. The group plans to restore the full 2.17 million bpd of voluntary cuts by September, alongside the UAE’s separate 300,000 bpd production increase. OPEC+ still maintains 3.65 million bpd of other production cuts, expiring in 2026. Aramco CEO Amin Nasser projects global oil demand to grow by 1.2 to 1.3 million bpd in the second half of 2025, driven by rising U.S. gasoline use and Chinese petrochemical demand. Meanwhile, BP notes stagnating non-OPEC production, Shell warns of 4–5% annual depletion rates, and Shell and TotalEnergies executives disagree on whether the current market is tight or well supplied.

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Abu Dhabi’s ADNOC Faces Trader Frustration Over Murban Crude Supply Uncertainty

Abu Dhabi National Oil Co. (ADNOC) caused trader frustration in July due to inconsistent communication about volumes of its flagship Murban crude, raising concerns about predictability and market confidence. After initially indicating reduced Murban supplies for July, some buyers were later told they would receive full allocations, following a surprise cut to future monthly exports announced in late May. This confusion contributed to a sharp drop in trading activity on an S&P Global Commodity Insights window last month, with only three full cargoes sold—none of which were Murban—far below normal levels. ADNOC insists it has maintained uninterrupted supply and fulfilled commitments, but traders have shifted toward term contracts for more supply security amid the uncertainty. The supply mismatch likely led to trading losses for some market participants due to hedging position misalignments.

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Jet Fuel Demand Stalls Amid Chinese Travel Slump and U.S. Policy Hurdles

Global jet fuel demand growth is faltering, with the IEA forecasting only 1.32% growth in 2025, down from 5.6% in 2024, and not expected to surpass 8 million bpd until 2027, just above the 7.9 million bpd seen in 2019. In the U.S., demand peaked at 2 million bpd in May for the first time since the pandemic but is forecast to remain flat at 1.7 million bpd through 2026, with European demand also stagnant. Tighter U.S. immigration policies and fears under Trump’s administration are expected to cause a 16.3% drop in U.S. arrivals in 2025, while UK-to-U.S. passengers are projected to fall 1.2%. China’s international capacity remains low at 9% compared to 29% in the U.S., and Chinese consumers continue to favor domestic travel. Additionally, newer aircraft such as the Airbus A320neo and Boeing 737 Max offer 15–30% improved fuel efficiency, further dampening global jet fuel consumption.

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Dangote Refinery to Build 1.6 Million Barrel Fuel Storage in Namibia for Southern Africa Supply

Nigeria’s Dangote refinery plans to construct storage tanks with a capacity of at least 1.6 million barrels of gasoline and diesel in Walvis Bay, Namibia, to supply refined fuels to southern African countries. The 650,000 barrels per day refinery, which began operations last year after a $20 billion investment, aims to expand its market reach to Botswana, Namibia, Zambia, Zimbabwe, and potentially the southern Democratic Republic of Congo. This storage project supports Dangote’s ambition to dominate regional fuel supply and reshape energy trade flows across Africa. Construction is expected to start soon within the Walvis Bay port, as confirmed by Namibia Ports Authority. Recently, the refinery also shipped gasoline cargo to Asia, marking its first export outside West Africa, while continuing to reduce Nigeria’s dependence on imported refined fuels.

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Gunvor to Halt Oil Terminal Operations at Rotterdam's Europoort Refinery

Gunvor plans to mothball terminal activities at its Europoort oil refinery in Rotterdam, just seven months after announcing a partial conversion of the facility to terminal-only operations. The move follows a broader scale-down strategy triggered by what the company describes as an "uncertain investment climate in the Netherlands". Gunvor will now begin consultations with the refinery’s works council regarding the shutdown. Despite the terminal closure, Gunvor confirmed that energy transition projects at the site remain unaffected, including a partnership with Varo to produce sustainable aviation fuel (SAF). The decision signals Gunvor's continued pivot away from traditional oil infrastructure toward clean energy ventures.

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Migrant Surge from Libya Disrupts Mediterranean Shipping

At least seven commercial vessels, including the 56,000-dwt Messinian Spire, diverted their routes over the past four days to assist in rescuing approximately 2,000 migrants crossing from Libya to Greece. The largest single rescue occurred when Messinian Spire picked up 520 migrants from a fishing boat 17 nautical miles (31 km) off Gavdos Island. Between July 5 and 9, Greek coastguards reported 13 separate search-and-rescue operations involving bulkers, tankers, and support from the EU’s Frontex agency. The crisis escalated when Libyan commander Khalifa Haftar expelled a senior EU delegation attempting to negotiate a migration control solution. In response, Greek Prime Minister Kyriakos Mitsotakis announced a three-month suspension of asylum applications and ordered the arrest and internment of all migrants arriving from Africa.

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Trafigura Partners with ZeroNorth, Taking Stake and Optimizing 350-Ship Fleet

Trafigura has entered a strategic alliance with shipping tech firm ZeroNorth, agreeing to deploy its voyage optimisation and emissions analytics tools across over 350 vessels in its fleet. As part of the deal, Trafigura is also acquiring an unspecified equity stake in the Danish maritime decarbonisation company. The partnership aims to reduce fuel consumption and emissions using AI-driven real-time data, including live weather, ship performance, and fuel availability. ZeroNorth, already backed by AP Moller Holding, Cargill, and PSG Equity, has similar fleet agreements with Ocean Network Express, Vitol, Hapag-Lloyd, and others. In a move to scale its operations, ZeroNorth raised $20 million in February from CIBC Innovation Banking and recently appointed former Uber executive Kare Kjelstrom as Chief Product & Technology Officer.