Oil Prices Fall to 3-Week Low Amid U.S.-China Economic Concerns and Rising Supply Outlook

Oil prices dropped to a three-week low on Friday due to economic uncertainty in the U.S. and China and signs of increasing global oil supply. Brent crude settled at $68.44 (-1.1%) and WTI crude at $65.16 (-1.3%), the lowest levels since early July and late June, respectively. Despite weekly losses of about 1% for Brent and 3% for WTI, optimism about a possible U.S.-EU trade deal offered some support to prices. Analysts anticipate Venezuelan oil exports could rise by 200,000 bpd, while Iran may also boost exports if nuclear talks progress—both increasing global crude availability. Meanwhile, OPEC+ may raise output at its upcoming meeting, even as U.S. rig counts continue to decline and Russia’s exports are set to drop to 1.77 million bpd in August.

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OPEC+ Expected to Maintain Oil Output Plan Amid Summer Demand Surge

An OPEC+ panel meeting on Monday is expected to keep the current oil production plan unchanged, according to four delegates, as summer demand helps absorb increased supply. The existing policy calls for eight OPEC+ members to boost output by 548,000 bpd in August, with a similar increase likely in September. This would complete the rollback of a 2.2 million bpd production cut, including a 300,000 bpd increase by the UAE ahead of schedule. The Joint Ministerial Monitoring Committee (JMMC), which advises on output levels, meets every two months and includes top OPEC and Russian officials. Despite higher output, oil prices remain supported — with Brent crude near $70 per barrel — partly due to underproduction by some members.

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U.S. Set to Renew Venezuela Oil Licences, Boosting Crude Tanker Demand

The U.S. is expected to renew limited oil licences for Western firms to resume operations in sanctioned Venezuela, potentially lifting demand for mainstream crude tankers. Chevron is likely to be the first to return, working again with PDVSA, Venezuela’s state oil company, as part of swap deals similar to previous arrangements. The move follows a recent prisoner swap and rising Venezuelan exports, which hit 844,000 bpd in June, up 8% from May. Despite the May deadline for U.S. and European companies to exit, 27 tankers loaded in Venezuela last month, with some headed to China and two VLCCs to the U.S. Gulf carrying 2 million barrels of Merey crude each. The renewed licences are unlikely to benefit Venezuela’s government directly, as Washington insists Maduro's regime will not profit from oil sales.

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Japan Boosts U.S. Crude Imports to Reduce Middle East Dependence, Raising Tanker Demand

Japan is significantly increasing long-haul crude oil imports from the U.S., with June volumes up 253% year-on-year to 102,000 bpd, though still only 4.8% of total imports. Driven by regional instability—such as the Israel-Iran conflict—refiners like Idemitsu Kosan are diversifying away from their heavy reliance on Middle Eastern suppliers. U.S. crude, including WTI from Texas, is being shipped through the Panama Canal, requiring smaller tankers, but VLCCs are still used for longer hauls from the U.S. Gulf. Spot deals are enabling imports from Canada and even Russia, with 440,286 barrels of Russian crude imported in June, including a Sakhalin Blend cargo exempt from the G7 price cap. This shift is boosting tanker tonne-miles, offering renewed optimism for long-haul tanker operators.

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Russia to Cut Daily Oil Exports by 8% in August as Refinery Runs Rise

Russia's daily oil exports from its western ports—Primorsk, Novorossiisk, and Ust-Luga—are expected to drop 8% to 1.77 million bpd in August, down from 1.93 million bpd in July, according to Reuters data. The reduction is linked to increased domestic refinery runs, with offline refining capacity set to decrease from 4 million to 3.74 million metric tons (approx. 27.4 million barrels). This shift means more crude is being processed domestically, reducing export volumes. Meanwhile, the EU has imposed its 18th sanctions package targeting Russia’s energy sector, including a revised crude price cap. However, Russia continues to export most of its oil above the cap, while enforcement of the price mechanism remains unclear and loosely implemented.

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Nayara CEO Resigns After EU Sanctions; Russian-Backed Indian Refiner Names Veteran Successor

Nayara Energy, a major Indian refiner partly owned by Russia’s Rosneft, has appointed Sergey Denisov as CEO after the resignation of Alessandro des Dorides following new EU sanctions. The EU targeted Nayara as part of expanded measures against Russia, prompting disruptions including tanker diversions and product shipment cancellations from Nayara’s Vadinar port. Denisov, a company veteran since 2017, replaces des Dorides, who had only served since April 2024. Nayara operates a 400,000 bpd refinery — nearly 8% of India's total refining capacity of about 5.2 million bpd — and exports over 4 million barrels of refined products monthly. Both Nayara and Rosneft have criticized the EU's sanctions as “unjust and unilateral,” and India has echoed similar disapproval as it remains a top importer of Russian crude.

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PetroChina Greenlights $9.56 Billion Refinery-Petrochemical Project in Dalian

PetroChina has approved a 68.5 billion yuan ($9.56 billion) investment to build a new refinery and petrochemical complex in Changxing Island, northeast China's Dalian, replacing an older facility recently shut down. The project will include a 200,000 bpd refinery, a 1.4 million metric ton-per-year ethylene unit, and various downstream plants producing polyethylene, polypropylene, and polyolefin elastomers. This move follows the closure of PetroChina's 410,000-bpd refinery in downtown Dalian amid industry struggles with overcapacity and slowing fuel demand. Construction has already begun on supporting infrastructure like jetties and pipelines, although the exact timing of the final investment decision remains unclear. The project reflects PetroChina's strategic shift towards modernizing production while adapting to weakened fossil fuel demand and rising electric vehicle adoption.

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Houthis Intensify Maritime Campaign, Targeting All Firms Linked to Israeli Ports

Yemen’s Houthi rebels have formally escalated their maritime strategy, announcing a “fourth phase” that targets any vessel operated by companies doing business with Israeli ports, regardless of the ship’s nationality or location. This policy has already been enforced, as the Houthis sank two Greek-owned bulkers, Eternity C and Magic Seas, earlier this month, even though those ships had not recently visited Israeli ports. The Eternity C attack resulted in four confirmed deaths and 11 crew members taken hostage, making it the deadliest Houthi attack since their campaign began in November 2023. Despite over 100 attacks in 20 months and a 50% drop in Red Sea/Suez Canal traffic, recent deadly strikes have not caused further decline in ship movement, which now averages 35 transits per day through the canal. The Houthis warned that only international pressure on Israel to halt its Gaza actions will prevent more attacks.

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Supertanker Converted for Diesel Heads to Europe Amid Fuel Shortage

The VLCC Nissos Keros, typically used for crude oil, is now carrying 2 million barrels of ultra-low sulfur diesel from Saudi Arabia’s Jubail terminal to France, with arrival expected on August 30. This reconfiguration comes as operators take advantage of high freight rates by using larger “cleaned” tankers to transport refined products, maximizing cost efficiency. The move highlights Europe's ongoing diesel shortage, worsened by lower refinery output, the loss of Russian supplies, and logistical challenges from Red Sea instability. The massive delivery may ease short-term supply pressure, but Europe remains vulnerable due to its dependence on distant imports. Freight rate volatility and geopolitical risk continue to threaten the region’s fuel security.

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EU-U.S. Strike Landmark Trade Deal with Tariff Reductions and Major LNG Commitments

The EU and U.S. finalized a trade deal that sets a 15% baseline tariff on nearly all EU goods entering the U.S., including cars, semiconductors, and pharmaceuticals, down from current rates like 27.5% on cars. A separate U.S. decision on chip and pharmaceutical tariffs is expected in two weeks, outside this agreement. Both sides agreed to zero tariffs on aircraft and parts, certain chemicals, generic drugs, semiconductor equipment, and critical raw materials, with more products to follow. The EU will maintain 50% steel and aluminum tariffs for now, which will later shift to a quota-based system. Crucially, the EU committed to buying $250 billion in U.S. LNG annually for three years ($750 billion total) and $600 billion in European investments in the U.S. during Trump’s second term, along with purchases of U.S. military equipment.

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Qatar Threatens EU LNG Supply Over Forced Labour and Climate Law

Qatar has warned it may divert LNG exports away from the EU due to the bloc’s new Corporate Sustainability Due Diligence Directive (CSDDD), which mandates checks on human rights and environmental impacts in global supply chains. In a May 21 letter to Belgium, Qatari Energy Minister Saad al-Kaabi criticized the law, specifically the requirement for climate transition plans aligned with the 1.5°C Paris Agreement goal, stating that Qatar has no plans for net-zero emissions. The EU currently receives 12–14% of its LNG from Qatar, which is the third-largest LNG exporter globally. QatarEnergy, led by Kaabi, holds long-term contracts with European firms like Shell, TotalEnergies, and ENI, making the threat significant. While the EU has proposed delaying and softening the law, Qatar argues the revisions don’t go far enough and urges removal of key climate-related provisions.

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VLGC Spot Rates Surge to Around $70,000 per Day Amid Strong Demand and Tight Fleet

VLGC spot freight rates have risen steadily, with Saudi Arabia-to-Japan routes reaching about $70,000 per day, an 8% increase over the past week, while Houston-to-Japan rates climbed 5% to around $66,000 per day, according to Fearnley Securities. These rates translate to roughly $80 per tonne of freight, reflecting robust chartering activity both east and west of the Suez Canal. Limited vessel availability and increasing natural gas production, especially from the U.S., are driving strong demand and firm market conditions. Recent fixtures include rates of $83–$84 per tonne for shipments from the Red Sea and India to Asia, while US Gulf to Asia rates via Panama Canal also rose. Analysts at Fearnley and Rim Intelligence expect these tight shipping fundamentals to persist, supporting potential share price gains for VLGC owners.