Oil Prices Jump Over 3% Amid US Pressure on Russia and Trade Deal Optimism

Oil prices surged on Tuesday, with Brent crude rising 3.53% to $72.51 and WTI climbing 3.75% to $69.21—their highest levels since June 20. The rally was driven by President Trump’s warning of new sanctions on Russia within 10 days if no progress is made on Ukraine, and by renewed hopes of easing US-China trade tensions. US Treasury Secretary Bessent warned China of potential high tariffs for continued Russian oil imports, adding to market pressure. Optimism also stemmed from the EU-US trade deal, which includes $750 billion in EU energy purchases from the US and avoids a full trade war. Meanwhile, US crude inventories rose by 1.54 million barrels, and markets await the Fed’s policy decision expected to hold rates steady.

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Bessent Warns China: 100% Tariffs Loom Over Russian Oil Imports

U.S. Treasury Secretary Scott Bessent warned Chinese officials that continued purchases of sanctioned Russian oil could lead to tariffs of up to 100%, citing U.S. legislation allowing penalties as high as 500%. During U.S.-China trade talks in Stockholm, Bessent also criticized China's ongoing imports of Iranian oil and over $15 billion in dual-use technology sales to Russia. He relayed President Trump's shortened deadline for Moscow—10 to 12 days—to progress on Ukraine peace efforts or face secondary tariffs. China responded by asserting its energy sovereignty, saying it would continue buying oil based on national interests. Bessent also cautioned that China's support of Russia is damaging its trade credibility with Europe.

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Foreign Oil Companies Await U.S. Green Light to Resume Venezuelan Operations

About six foreign oil firms, including Chevron, Eni, Repsol, Maurel & Prom, and Reliance Industries, are awaiting U.S. authorization to resume operations with Venezuela's PDVSA after licenses were revoked in March by the Trump administration. These companies, many of which are minority partners in oil ventures or major crude buyers, were involved in 40% of Venezuela's 881,000 barrels/day exports in Q1 before the suspension. President Maduro said Chevron has signaled a new license is forthcoming, prompting PDVSA to prep cargo allocations. However, no company has yet received official permits, and Chevron has not instructed any tankers to load cargo. The U.S. State Department reiterated its refusal to allow Maduro's regime to profit from oil sales, emphasizing support for Venezuela's democratic restoration.

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Pemex Crude Oil Exports Plunge 39% in June Amid Push for Domestic Refining

Mexico's state oil company Pemex exported only 458,103 bpd of crude oil in June, down 39% from a year earlier and the lowest since records began in 1990, due to a strategic shift toward local refining. Imports of refined products also fell 38% to 475,047 bpd, as domestic processing rose, boosted by the new Olmeca refinery which handled 191,585 bpd. Pemex’s seven refineries processed a total of 1.12 million bpd. Despite its $120 billion debt, Pemex aims to reach 1.8 million bpd production, though current output lingers at around 1.6 million bpd. Officials cite future growth through private partnerships, but have yet to provide concrete plans.

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Shippers Withdraw from Contracts with Russian-Backed Nayara Amid EU Sanctions Pressure

Owners of three tankers — Bourbon, Courage, and Jag Pooja — have requested early termination of contracts with Nayara Energy, India's third-largest refiner, due to EU sanctions imposed on July 18 targeting its Russian ownership, including Rosneft. Tanker operators Seven Islands Shipping and GESCO cited sanction-related risks as the reason, while another tanker, Sanmar Songbird, was diverted from Nayara to MRPL due to insurance concerns. Nayara’s operations have been disrupted, leading to reduced output at its 400,000 bpd refinery and resignation of its CEO. The company called the sanctions "unjust and unilateral" and has taken Microsoft to court after service suspension. India remains the largest importer of Russian seaborne crude since the Ukraine invasion in 2022.

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EU Sanctions Hit India’s Nayara Energy: Refinery Run Rate Falls to 70–80%

India’s Nayara Energy has cut operations at its 400,000 bpd Vadinar refinery to 70–80% capacity, down from typical near-full utilization, following EU sanctions imposed on July 18. Mounting logistical hurdles and the withdrawal of trading partners have made it harder to ship and monetize refined products, with P&I insurance clubs pressuring shipowners to avoid Nayara-linked cargoes. One such vessel, the Bourbon, is idling off the Indian coast amid uncertainty over insurance and destination. Nayara exports up to 30% of its output and relies on global tanker support and insurers—now under strain. The EU cited Nayara’s ownership by Russia’s Rosneft (49.13%) and alleged links to Moscow’s war efforts as grounds for sanctions.

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Russia’s Urals Oil Discount Shrinks to Wartime Low Despite EU Sanctions Push

Russia’s Urals crude is now trading at a $11.45 per barrel discount to the North Sea Dated benchmark—the narrowest since the Ukraine invasion began in February 2022. This comes even after the EU’s 18th sanctions package, which includes a price cap cut to $47.60 effective September 3 and a ban on petroleum products from Russian crude starting next January. However, the U.S. hasn’t joined this latest move, and strong demand from Asia, especially China, combined with tight Russian supply, is helping narrow the discount. India, Russia's biggest buyer, is starting to diversify, which could lead to wider discounts later this year. Russia, facing a widening fiscal deficit and crude prices below its $69.7 budget assumption, remains vulnerable if global oil surpluses depress prices further.

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OPEC+ Output Gamble Eases as Oil Revenue Climbs to $1.4 Billion/Day

OPEC+’s bold move to boost oil production is proving less financially damaging than initially feared. After an early price crash to four-year lows, Brent crude has rebounded to $70 per barrel, lifting daily oil revenue for four key Middle Eastern OPEC members to nearly $1.4 billion in July, the highest since February. Despite the short-term gain, forecasters like Goldman Sachs and JPMorgan predict prices may fall again due to weak Chinese demand and abundant U.S. supply. This could pressure OPEC+ to reverse recent hikes, including a possible 2.2 million bpd increase being considered for September. While still earning less than pre-increase levels, OPEC+ sees temporary relief from steeper losses.

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EU’s Lower Russian Oil Price Cap May Fuel Growth of Dark Fleet, BRS Warns

BRS Shipbrokers warns that the EU’s upcoming reduction of the Russian crude oil price cap from $60 to $47.60 per barrel could significantly boost the dark fleet, as fewer mainstream vessels will legally transport discounted Russian barrels. Buyers may increasingly turn to sanctioned or grey fleet ships, potentially driving older, non-sanctioned tankers into the shadow market. Mainstream aframaxes are expected to be hit hardest, with diminishing legal opportunities at the lower cap. Despite sanctions, Russian oil exports have remained steady since the 2022 Ukraine invasion. The revised cap—15% below Urals crude—comes alongside expanded EU sanctions, including bans on oil products made from Russian crude and actions against registry bodies in Gabon and Comoros.

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MR Tanker Rates Surge 30% Amid Rising U.S. Export Activity

MR tanker rates climbed over 30% in recent days, with non-eco, scrubberless MRs reaching $25,800/day on Tuesday, up from $19,600/day last week, according to Jefferies. Analyst Omar Nokta credits the rise to stronger U.S. Gulf export activity and solid refining margins in the U.S., Europe, and Asia. July MR spot rates have averaged $26,000/day, up from $24,500/day in the first half, with Scorpio Tankers and Ardmore Shipping expected to report positive forward bookings. While markets in the Middle East and Europe slowed, the U.S. Gulf remains firm despite limited vessel availability. One potential MR from West Africa may ballast to the U.S. if activity there declines further.

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Tsakos Energy Navigation Resurfaces in VLCC Market with Dual Order at Hanwha Ocean

Tsakos Energy Navigation (TEN) is reported to have placed a long-anticipated order for two VLCCs at Hanwha Ocean in South Korea, breaking a decade-long absence from the VLCC newbuilding market. Though Hanwha only confirmed the $257 million deal from an unnamed Oceania-based client, industry sources link the order to TEN, with 2027 delivery dates expected. Each 320,000-dwt tanker is priced at $128.5 million, and will feature Hanwha’s proprietary fuel-saving systems to boost energy efficiency and cut emissions. This deal brings Hanwha’s VLCC orderbook to 10 ships in 2025, reinforcing its status as the global leader in VLCC construction, having delivered 198 out of 1,015 active units globally.

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CNOOC Launches China’s First High-Pressure Offshore Gas Project in South China Sea

CNOOC Ltd has started gas production from the Dongfang 13-3 block in the South China Sea's Yinggehai Basin, marking China's first high-temperature, high-pressure, low-permeability offshore gas project. The field, at a water depth of 67 meters, uses a new unmanned wellhead platform integrated with existing Dongfang field infrastructure. Six development wells are planned, targeting a peak output of 35 million cubic feet per day by 2026. The project forms part of an offshore network supplying gas to Guangdong, Hainan, and Hong Kong. CNOOC holds 100% ownership and operational control of the block.

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UK’s “Hydrogen Highway” Turns Old Rigs into Offshore Green Hydrogen Hubs at Half the Cost

The Port of London Authority and partners completed the £1.2m ($1.5m), three-year Hydrogen Highway project, showing that repurposing retired offshore oil and gas platforms with offshore wind power can produce green hydrogen at nearly half the current cost—about £6–£7 ($7.50–$8.75) per kilogram versus £14. The project demonstrated the feasibility of using autonomous vessels to transport containerised hydrogen from offshore platforms to ports, eliminating the need for costly pipelines. This hydrogen can fuel ships, trucks, and port infrastructure, contributing significantly to maritime decarbonisation. While the technology is viable, the team highlighted regulatory and investment gaps that must be addressed to scale this model. The Port of London Authority now calls for a national hydrogen maritime framework and public–private collaboration to build a robust hydrogen economy.