Oil Prices Steady Amid Mixed U.S. Economic Signals and New EU Sanctions on Russian Oil

Crude oil prices were steady on Friday, with Brent crude settling at $69.28 and WTI at $67.34 per barrel, both down about 2% for the week amid mixed U.S. economic data and tariff news. U.S. homebuilding hit an 11-month low in June due to high mortgage rates, while consumer sentiment improved and inflation expectations fell, potentially easing Federal Reserve rate cuts and supporting oil demand. Meanwhile, President Trump is considering reciprocal tariffs with the EU exceeding 10%, which could push U.S. tariff rates above 25%, raising inflation risks. The EU agreed on an 18th sanctions package targeting Russia’s oil and energy sectors, including banning petroleum products refined from Russian crude, affecting key importers like India and Turkey. Separately, Chevron completed its $55 billion acquisition of Hess, securing access to a major oil discovery off Guyana after a legal victory over Exxon Mobil.

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EU Unveils Russian Oil Sanctions with Dynamic Price Cap and Shipping Blacklist

The EU has introduced a new dynamic oil price cap on Russian crude, set at 15% below the five-month average market price, currently lowering the cap from $60 to $47.6 per barrel, effective from 3 September. This cap will be revised every six months, with a 90-day transition period for existing contracts after any update. The EU also imposed a ban on clean fuels refined from Russian crude in third countries, starting 21 January 2026, exempting key allies like the US and UK. Additionally, the EU blacklisted 105 vessels, including tankers and LNG carriers, and sanctioned Indian master Abhinav Kamal for high-risk oil transport practices. Two flag registries in Comoros and Gabon, along with several shipping companies across UAE, India, Russia, and Hong Kong, were also sanctioned for enabling risky or opaque operations.

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EU Diesel Ban from Russian Crude Sparks Supply Jitters and Price Surge

The EU’s new sanctions banning diesel made from Russian crude are intensifying pressure on Europe’s already tight diesel market. The region imports around 240,000 bpd from countries like India and Turkey, which refine Russian oil, raising concerns about supply continuity. Diesel prices jumped by as much as $3.50 per barrel, with spreads reaching $28, as inventories in the ARA hub dropped to 1.76 million tons — the lowest since 2022 for this time of year. Reliance Industries, the top Indian diesel supplier to Europe, is assessing its response, while India stated it does not support unilateral sanctions. Analysts caution that enforcing the ban and verifying crude origin will be difficult, potentially disrupting flows from Turkey and India.

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Greek Tanker Fleet to Continue Shipping Sanction-Compliant Russian Oil Despite Tougher EU Price Cap

Greek tanker operators, controlling the world’s largest tanker fleet and accounting for about 20% of Russian oil shipments, are expected to continue transporting sanctioned-approved Russian crude despite the EU’s 18th sanctions package. The EU’s new price cap targets Russian crude purchases at no less than 85% of the market average, currently about $47.60 per barrel, down from the earlier ineffective $60 cap set by the G7. Although the sanctions tighten restrictions, sources say shipping Russian oil within these limits remains “feasible” as long as traders comply with the cap. The U.S. has not aligned with the EU price cap, limiting its enforcement since dollar clearing relies on U.S. banks. European firms trading Russian oil will face more complexity but are likely to observe a 90-day wind-down period for transport contracts made by July 18.

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Rosneft Slams EU Sanctions on India’s Nayara Energy as 'Unjustified and Illegal'

Rosneft PJSC has denounced the European Union’s recent sanctions on India’s Nayara Energy as “unjustified and illegal,” following the EU’s 18th package targeting Russia’s oil revenues. The refinery, 49.13% owned by Rosneft, processes 400,000 bpd and operates nearly 7,000 fuel stations across India. Rosneft emphasized that Nayara is fully taxed in India, has never paid dividends to shareholders, and reinvests all profits locally. The Russian firm, unable to repatriate earnings due to prior sanctions, has expressed intent to exit the venture. Both Rosneft and the Indian government affirmed that Nayara will seek to safeguard the interests of its stakeholders amid the EU's unilateral measures.

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Iraq to Boost Basrah Medium Crude Shipments in August Amid Rising OPEC+ Output

Iraq plans to increase shipments of destination-free Basrah Medium crude to 17-18 million barrels in August, about 20%-30% higher than typical monthly volumes, signaling a rise in oil production. This increase will slightly raise Iraq’s total crude exports as part of OPEC+’s broader production boost initiative, despite past delays in meeting output targets. Basrah Medium accounted for over 60% of Iraq’s crude exports in June, which totaled around 3.35 million bpd. Destination-free crude, highly sought after by equity partners like Shell, TotalEnergies, and CNPC, can be freely traded, unlike destination-restricted barrels. Iraq’s exports remain unaffected by recent drone attacks on the Kurdistan region, as SOMO does not export crude from there.

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Uncertainty Clouds Restart of Iraq’s Kurdish Oil Exports Amid Drone Attacks and Unsettled Terms

Despite the Iraqi federal government's statement that Kurdish oil exports would resume immediately, sources confirm that no preparations or agreements are in place, making a near-term restart unlikely. The Kurdistan region had been producing around 435,000 bpd before the pipeline to Turkey was shut down in March 2023. Recent drone attacks, likely from Iran-backed militias, have further disrupted output, reducing production by 140,000–150,000 bpd. Oil firms are holding out for contractual guarantees and repayment of nearly $1 billion in debts before restarting operations. Past agreements between Baghdad and the Kurdistan Regional Government have failed, and key players, including pipeline operator KAR Group and firms like Genel and DNO, remain noncommittal.

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Asian Demand Rises for Kazakhstan's CPC Blend as Price Gap Widens and Freight Costs Shift

Asian refiners are increasing purchases of Kazakhstan’s CPC Blend crude for August loadings due to weaker European demand and falling prices. Discounts on CPC widened by about $1 per barrel, with current delivery prices to North Asia ranging from $3.50 to just under $4 above September Dubai quotes—cheaper than Murban crude, which trades at around $4.70 above Dubai quotes. Buyers include Unipec, SK Energy, GS Energy, and Reliance Industries, each securing at least 1 million barrels. The Brent-Dubai spread narrowing to below $1.60 and rising Middle East-to-China shipping costs are making arbitrage crudes like CPC, U.S. WTI, and Brazilian grades more attractive to Asian refiners. Offers for WTI deliveries to North Asia are about $5 above Dubai quotes, slightly above Murban’s level.

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US Firms to Lead Energy Sector Revival in Syria Following Sanctions Lift

U.S.-based Baker Hughes, Hunt Energy, and Argent LNG are collaborating to develop a masterplan to rebuild Syria’s oil, gas, and power sectors after U.S. sanctions were lifted in June. The plan aims to revitalize energy infrastructure damaged by 14 years of civil war, starting with areas west of the Euphrates River under Syrian government control. Syria’s electricity generation has plummeted from 9.5 GW pre-2011 to just 1.6 GW today, requiring billions in investment. The companies intend to cover the full energy value chain, including exploration, production, and power generation with combined-cycle plants. Despite ongoing security risks and regional tensions, this initiative reflects growing U.S. investor interest amid broader efforts to restore Syria’s economy.

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California Governor Newsom Proposes Easier Permitting for Oil Drilling Amid Industry Shifts

California Governor Gavin Newsom proposed a bill to simplify permitting for new oil wells by introducing “plug-to-drill” permits until 2036, requiring two wells to be plugged before drilling a new one, and removing the need for CalGem approval under certain conditions. This move has sparked criticism from environmental groups who argue it drastically reduces oversight and could lead to unlimited drilling. Shares of local drillers responded positively, with California Resources Corporation rising 4.8% and Berry Corp up 6.9%. Newsom’s shift comes as refinery closures by Phillips 66 and Valero have tightened the state’s fuel supply and amid legislative focus on reducing living costs for California’s 40 million residents. The governor’s office insists the policy aims to stabilize petroleum supply while maintaining safety and affordability.

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Dip in US Crude Exports Casts Shadow Over Tanker Market Optimism

US crude exports fell to 2.4 million bpd last week, the lowest since early April 2024, raising concerns for the crude tanker market, according to ABG Sundal Collier analyst Petter Haugen. While global exports reached 47.4 million bpd, the decline in US volumes—a key source of long-haul shipments to Asia—could reduce shipping demand despite Opec’s recent production hikes of 411,000 bpd and 548,000 bpd in August. Rising Atlantic basin supply is expected to weigh on oil prices and benefit tanker demand, with Petrobras exporting a record 93.6 million barrels in Q2 and Guyana and Canada also ramping up. VLCC rates dipped 2.7% to $39,400/day, while Suezmax rates surged 10.4% from Thursday to $39,600/day; Aframax rates fell 6.3% from last week to $27,700/day. Market analysts anticipate that increased Opec exports later in Q3 may help balance the loss from the US.

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China's Fuel Oil Imports and Bunker Exports Rebound Sharply in June on Tax Adjustments

China’s fuel oil imports rose to approximately 1.4 million metric tons (about 295,708 bpd) in June, up 7% from May but still down 6% year-on-year, due to policy changes in Shandong that increased tax rebates. Despite this monthly gain, total imports for January–June fell 19.8% compared to the same period last year, totaling 9.75 million tons. Exports of low-sulphur marine fuels surged in June to 2.32 million tons, an 88% increase from May and up 46% year-on-year, reflecting strong coastal bunkering demand. May’s sharp drop in both imports and exports was reversed in June as market incentives improved. Bonded storage trade dominated both imports and exports, with ordinary trade volumes remaining relatively lower.

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Tanker Fleet Growth to Outpace Demand After 2025 Amid Surge in Newbuild Orders

Veson Nautical warns that tanker fleet expansion driven by a surge in newbuilding orders last year will outpace demand growth after 2025, despite declining orders and easing shipyard prices expected in 2025. Fleet growth is fueled by low scrapping rates and increased deliveries but may be tempered by regulatory pressures like the EU Emissions Trading System and IMO decarbonization targets. Geopolitical tensions and trade reroutes, especially due to Red Sea issues and EU bans on Russian oil, are driving short-term tanker rate volatility and elevated tonne-mile demand. Meanwhile, oil demand growth faces long-term headwinds from electrification and efficiency improvements, with China’s demand remaining a key variable. VLGC earnings averaged $43,300/day in 2024 but are expected to decline this year before a brief rebound in 2026, followed by further drops due to fleet expansion.

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Reliance to Launch Green Energy Gigafactories by 2026, Aiming to Cut Energy Costs by 25%

Reliance Industries, led by Mukesh Ambani, announced that all its clean energy gigafactories—producing solar panels, batteries, and electrolyzers for green hydrogen—will be operational within four to six quarters. Located in Jamnagar, near the world’s largest petroleum refining complex, the gigafactory cluster aims to reduce Reliance’s energy costs by at least 25% while offering attractive returns on capital. The company plans to invite partners for financing and offtake once operations stabilize. Reliance is also building India’s largest solar glass factory to help reduce the country’s heavy reliance on imports, which currently account for about 70% of key solar panel components. This initiative supports India’s push, alongside conglomerates like Adani and Tata, to boost domestic clean energy manufacturing and exports.