Oil Prices Drop as OPEC+ Output Boost Fuels Oversupply Fears

Oil prices dropped to $68.76 for Brent and $66.29 for WTI, their lowest in a week, after OPEC+ announced a 547,000 bpd production increase for September, raising oversupply concerns. This decision marks a major reversal of previous cuts totaling 2.5 million bpd (2.4% of global demand), despite weak U.S. fuel demand and record U.S. oil production in May. Traders are bracing for possible additional OPEC+ supply hikes, with a potential 1.65 million bpd cut unwind under discussion for September. Geopolitical tension added uncertainty, as Trump threatened 100% tariffs on Indian imports of Russian crude, putting 1.7 million bpd of supply at risk if Indian refiners halt Russian oil purchases. Analysts remain cautious, noting OPEC+ still holds significant spare capacity, and the market awaits Trump’s decision on further Russia sanctions this Friday.

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Trump Escalates Tariff Threats Against India Over Russian Oil; Delhi Vows to Defend Interests

U.S. President Trump threatened to significantly raise tariffs on Indian goods over India's continued purchase of around 1.75 million bpd of Russian oil, accusing India of profiting off the war in Ukraine. India rejected the accusation as “unjustified and unreasonable,” vowing to protect its national and economic interests. Despite Western pressure, India has defended its Russian oil imports as economically necessary, noting that many Western nations also maintain trade with Moscow. While India's main refiners briefly paused Russian oil purchases, they have since turned to alternatives like U.S., Canadian, and Middle Eastern crude. The trade and diplomatic rift is deepening amid broader tensions, with analysts warning of India's uncertainty over Trump’s shifting stance on Russia and BRICS nations.

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India Continues Russian Crude Imports Despite U.S. Tariffs and Political Pressure

Despite mounting pressure from the U.S. and EU, at least four tankers delivered over 2.9 million barrels of Russian crude to Indian refineries over the weekend. The U.S., under President Donald Trump, recently imposed a 25% tariff on Indian exports and warned of punitive action, yet India has not directed its refiners to halt Russian imports. Private refiners Nayara Energy and Reliance Industries received nearly 2.2 million barrels of Urals crude, while state-run refineries BPCL and MRPL received 723,000 barrels of Varandey crude via the Aframax tanker Mikati. More vessels are expected to discharge an additional 2.2 million barrels in the coming days at ports like Sikka and Mundra. Despite sanctions, long-term deals — such as Reliance’s agreement with Rosneft— and India’s appetite for discounted Russian oil continue to drive the trade.

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Drone Attack Halts Operations at Russia’s Novokuibyshevsk Oil Refinery Amid U.S. Ceasefire Deadline

Russia’s Novokuibyshevsk oil refinery, operated by Rosneft, suspended primary oil processing on August 2 after a Ukrainian drone attack damaged its main unit (CDU-11), sources said. The refinery, with a capacity of 160,000 bpd, had been processing about 18,000 tons of crude oil daily before the strike. This is the first drone attack on a major Russian refinery since March 2025. The incident follows President Trump’s 10–12-day ultimatum to Moscow for a ceasefire with Kyiv or face consequences, signaling rising pressure from Washington. The second unit, CDU-9, is also scheduled for major maintenance from August to early September, compounding the refinery’s shutdown.

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Venezuela’s Oil Exports Dip as Partners Await U.S. Sanctions Clearance

Venezuela’s oil exports dropped by 10% in July, averaging 727,000 bpd, as key partners of state-run PDVSA awaited U.S. authorizations to resume or expand operations. While Chevron received a limited license to export Venezuelan crude to the U.S., other partners are still on hold. Chevron’s exports had been suspended since April over sanctions-related payment issues but are expected to resume soon under new terms. Nearly 95% of Venezuela’s oil exports in July went to China, with Cuba receiving 31,000 bpd. A new export mechanism is being negotiated between Chevron and PDVSA, possibly involving in-kind payments and oil-for-diluent swaps.

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BP Discovers Largest Oil and Gas Find in 25 Years in Brazil’s Santos Basin

BP announced a major discovery in Brazil’s Santos Basin, calling it the company’s largest oil and gas find since Shah Deniz in 1999, though no reserve estimate has yet been provided. The Bumerangue block, secured in 2022, could become a major output hub, helping BP refocus its strategy on fossil fuels after setbacks in renewable investments. The discovery marks BP’s 10th find in 2025, with production last year at 2.4 million barrels of oil equivalent per day, projected slightly lower this year. While the find was celebrated, former Petrobras CEO Jean Paul Prates cautioned that elevated CO₂ levels in the field could make development uneconomical. Still, BP shares rose 1.3%, outperforming the broader European energy index, with analysts calling the discovery potentially a “game changer” for BP’s upstream longevity into the 2030s and 2040s.

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ExxonMobil Returns to Libya with Oil Exploration Pact After Decade-Long Hiatus

Libya’s National Oil Corporation (NOC) has signed a memorandum of understanding (MoU) with ExxonMobil, marking the U.S. energy giant’s return after a 10-year halt due to security concerns. The MoU covers geological and geophysical studies in four offshore blocks off Libya’s northwest coast and in the Sirte Basin. ExxonMobil withdrew from Libya in 2013, citing instability and political risk following the 2011 NATO-backed uprising that ousted Muammar Gaddafi. Libya's oil production has faced repeated disruptions since 2014, amid internal division and conflict. This agreement signals a potential reactivation of foreign investment in Libya’s vital energy sector.

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Nigeria’s Oil Output Hits 1.8 Million bpd in July Amid Security Crackdown

Nigeria’s oil production surpassed 1.8 million bpd in July, with a current average of 1.78 million bpd, according to Gbenga Komolafe, head of the Nigerian Upstream Petroleum Regulatory Commission. This marks the highest output since November and is a result of intensified security operations in the oil-rich Niger Delta, aimed at combating oil theft and unrest. Oil revenue is critical to Nigeria’s economy, accounting for two-thirds of government income and over 80% of foreign currency earnings. The country plans to boost production by 1 million bpd, targeting 3 million bpd in total. Komolafe emphasized continued collaboration with stakeholders to sustain output and improve transparency in the sector.

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Trump’s Tariff Threats and OPEC Output Hike Offer Lift to Tanker Markets

OPEC's recent decision to increase oil production by 547,000 barrels per day and U.S. President Donald Trump’s threats of heavy tariffs on buyers of Russian oil — notably China and India — could significantly bolster the tanker market. Trump has warned of tariffs up to 500% if Russia fails to agree to a ceasefire within 10 to 12 days, targeting India in particular, which has imported 1.6 million bpd from Russia in recent months. Analysts suggest these threats could push India to reduce, though not eliminate, its Russian oil purchases. Meanwhile, tanker rates are beginning to respond, with VLCCs earning $25,600/day, Suezmaxes $34,000/day, and Aframaxes $33,600/day, all seeing gains since Friday. This follows a pattern of OPEC production increases, with five consecutive monthly hikes, signaling stronger demand for tanker transport through Q3.

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Trafigura Expands VLCC Orderbook to Eight with Two More Tankers from China

Swiss commodity giant Trafigura has ordered two additional 319,000-dwt VLCCs from Jiangsu New Hantong Ship Heavy Industry, bringing its total VLCC newbuildings at the yard to eight. The latest deal marks China’s first VLCC newbuilding contract of 2025, with market estimates placing vessel prices at around $110 million each. These tankers will be built at Jiangsu Hantong ChangYang Intelligent Manufacturing, a newly formed shipyard with a capacity to deliver over 100,000 tonnes of high-end vessels. Trafigura’s earlier six orders — some ammonia-ready — are scheduled for delivery between late 2026 and 2027, with at least one resold to Advantage Tankers for $119 million. The surge in VLCC orders reflects industry needs to replace aging fleets, as 40% of VLCCs are now over 15 years old, making it harder for older ships to meet chartering standards.

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Panama Bans Tankers and Bulkers Over 15 Years Old from Joining Its Registry

Panama, the world’s second-largest ship registry with 14% of global fleet tonnage, will no longer register oil tankers and bulkers older than 15 years, citing concerns about ties to the shadow fleet. Data from 2023 to mid-2025 revealed that over 70% of detained vessels flying Panama’s flag were ships older than 15 years. The average vessel age in the Panamanian registry is 19.4 years, making it one of the oldest among top 10 flag states. Since 2019, Panama has deflagged more than 650 vessels, including 214 ships since October 2024, to curb sanctions evasion and illicit activity. The new rule targets incoming ships, not those already on the registry.