Oil Prices Dip Ahead of Trump’s August 1 Tariff Deadline Amid Trade Uncertainty

Oil prices declined on Thursday as markets reacted to looming U.S. tariffs, with Brent crude falling 71 cents (0.97%) to $72.53 and WTI dropping 74 cents (1.06%) to $69.26 per barrel. The uncertainty stems from President Trump's statement that nations without a trade deal or tariff letter will be contacted by the U.S. by day's end. Trump also announced a 90-day extension of the U.S.-Mexico trade deal, with Mexico continuing to face a 25% tariff on fentanyl and cars, and 50% on metals. U.S. crude production hit a record 13.49 million bpd in May, while inventories rose by 7.7 million barrels, countering expectations of a 1.3 million barrel draw. Despite the crude build, a 2.7 million barrel gasoline draw, far exceeding forecasts, reflected strong seasonal demand.

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US Expands Sanctions Targeting Over 60 Ships in Iran’s Shamkhani Shipping Network

The US has intensified its sanctions on Iran, targeting 62 vessels, 73 entities, and 13 individuals linked to Mohammad Hossein Shamkhani, son of a senior Iranian political adviser. This network, centered around the UAE-based Marvise SMC DMCC, controls a vast fleet involved in transporting Iranian and Russian oil. The sanctions cover a mix of crude, product, container, and LPG carriers, many of which benefit from preferential treatment at Iranian ports. Key individuals involved hail from several countries and are accused of disguising their ties to facilitate oil trade circumventing Western sanctions. The move comes as the US prepares secondary sanctions against nations trading with Russia, while countries like China and India continue buying Iranian oil. Despite these efforts, Tehran vows to defy sanctions, criticizing them as unilateral coercion.

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US Sanctions Fourth Chinese Oil Terminal Over Iranian Crude Shipments

The U.S. has sanctioned Zhoushan Jinrun Petroleum Transfer Co., a major Chinese oil terminal operator, accusing it of handling at least six shipments of Iranian crude oil. This marks the fourth Chinese terminal penalized in Washington’s intensified campaign against Iran’s oil trade, which the U.S. claims finances terrorism. Zhoushan Jinrun, located in the strategic Zhoushan area with storage capacity of about 6.9 million barrels, did not respond to inquiries. Despite official Chinese claims of halting Iranian oil imports since June 2022, data and traders indicate continued, covert flows, often disguised as Malaysian shipments. The U.S. continues to apply broad sanctions targeting tankers, traders, and smaller Chinese refiners linked to Iranian crude.

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Indian State Refiners Halt Russian Oil Purchases Amid Narrowing Discounts and U.S. Pressure

India’s state-run refiners have paused purchases of Russian crude over the past week due to shrinking discounts and increased U.S. pressure, including threats of tariffs and secondary sanctions by Donald Trump. Russia supplies about 35% of India’s oil, but private refiners now account for nearly 60% of India’s 1.8 million bpd Russian oil imports in early 2025. State refiners like IOC and BPCL are turning to Middle Eastern and West African crude instead. Trump recently warned of 100% tariffs on buyers of Russian oil and reduced the secondary sanctions deadline to 10–12 days. India has voiced its opposition to unilateral sanctions, as concerns grow that new EU measures could also complicate international transactions.

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Chevron Strikes New Deal to Deliver Portion of Venezuelan Oil Production to Government

Chevron has agreed to new terms with Venezuela’s state oil company, PDVSA, under which Chevron will deliver a share of its oil production to the Venezuelan government as payment, following the issuance of a U.S. license allowing it to restart operations. The arrangement avoids direct cash royalties or taxes, instead providing the Maduro regime with oil it can sell to other buyers, although it remains unclear if the government can export this oil to the U.S. or elsewhere. Chevron is the only major U.S. oil company still operating in Venezuela and has been critical to sustaining the country’s oil output. The recent deal follows a period when Chevron’s license had expired, during which production was maintained via imported diluents. The renewed U.S. license is seen as a strategic move in U.S.-Venezuela relations, balancing sanctions pressure with maintaining production stability.

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U.S. Oil Output Hits Record 13.49 Million Barrels Per Day in May Amid Oversupply Fears

U.S. crude oil production reached a record 13.49 million bpd in May, up 24,000 bpd from April’s previous high, according to EIA data. This increase occurred despite growing concerns of global oversupply, which has driven oil prices to four-year lows. Offshore Gulf output rose 0.5% to 1.80 million bpd, the highest since December, while Texas production slightly edged up to 5.752 million bpd. President Trump has pushed for increased domestic output and expanded drilling on federal lands. Additionally, U.S. gross natural gas production hit a record 120.60 billion cubic feet per day in April, with Pennsylvania's output up 0.6% and Texas down 0.3%.

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Pakistan Secures First U.S. Oil Import as Cnergyico Strikes Landmark Deal with Vitol

Pakistan’s largest refiner, Cnergyico, will import 1 million barrels of WTI crude from the U.S. in October — the country’s first-ever U.S. oil shipment— under a test deal with trading giant Vitol. The cargo will be loaded in Houston and arrive in Karachi later that month, with potential for monthly imports if commercially viable. This move follows U.S. pressure, including threats of 29% tariffs by President Trump, and Pakistan’s growing alignment with the U.S. on trade and diplomacy. Oil, valued at $11.3 billion in the fiscal year ending June 2025, is Pakistan’s largest import, and the deal aims to diversify supply away from the Middle East. Cnergyico, capable of refining 156,000 bpd, plans infrastructure expansion and refinery upgrades to accommodate future growth.

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Asia Increases U.S. WTI Crude Imports as Middle East Oil Prices Climb and Arbitrage Opens

Asian refiners are boosting imports of U.S. WTI crude in Q4 as rising Middle East oil prices, particularly Dubai and Murban, make U.S. oil more competitive. Japanese refiner Taiyo Oil bought WTI from Occidental at a $3.50 premium to October Dubai quotes, with WTI trading 30–75 cents per barrel cheaper than Murban depending on the supplier. Falling VLCC freight rates—down to $5.35M–$6.5M—have also improved the economics of shipping U.S. crude to Asia. Supply constraints from Abu Dhabi’s ADNOC and fears of 100% secondary tariffs on buyers of Russian oil are prompting diversification away from the Middle East and Russia. Analysts expect increased WTI buying from China, India, and Japan as a result.