Following the collapse of geopolitical risk premium in oil prices, oil is back to trading on supply, demand, and OPEC+ expectations.
The Israel-Iran ceasefire and the lack of subsequent retaliatory attacks has drained oil markets of the elevated geopolitical risk that saw Brent near $80 per barrel last week, only to post a $9 per barrel week-on-week drop and trade around $68 per barrel on Friday. Now that the Middle East is relatively calm, there are two main price-defining events ahead – OPEC+ with its July 06 meeting and Donald Trump with his July 09 tariff war deadline.
Shell Denies BP Takeover Talks. UK-based energy major Shell (LON:SHEL) refuted market speculation that it is in ‘early talks’ to take over its long-standing rival BP (NYSE:BP), issuing a statement that under UK market rules it would be barred from making any BP-relevant moves over the next six months.
US’ Most Notorious Power Plant to Restart by 2027. The Three Mile Island nuclear plant in Pennsylvania, offline after an expedited decommissioning prompted by the 1979 nuclear leakage incident, is set to restart in 2027 to boost the regional grid, as confirmed by operator Constellation Energy (NASDAQ:CEG).
Trump Signals Weaker Iran Enforcement. Whilst President Trump’s rhetoric vis-à-vis Iran was quite bellicose during the 12-day war with Israel, the US President hinted that China will be allowed to continue buying Iranian oil and that the US government wants to see Iran getting back into shape.
Saudi Export Revenue Collapses on Low Prices. Saudi Arabia’s revenue from oil and refined product exports plunged to its lowest since June 2021, totalling only $16.5 billion (down 21% year-on-year), as lower oil prices risk to derail the country’s Vision 2030 strategy, estimated to cost $1.3 trillion.
Egypt Doubles Down on LNG. Egypt has been struggling to keep its economy running after Israel halted pipeline deliveries for two weeks, prompting it to maximize LNG imports with July arrivals expected to hit an all-time high (surpassing 0.51 Mt from a year ago) after both May and June posted 0.48 Mt.
Russia Mulls Full Gasoline Export Ban. Russia’s Anti-Monopoly Service (FAS) has proposed a complete ban on gasoline exports to tackle high domestic prices, jumping to ?65,000 per metric tonne ($830/mt) earlier this month, potentially taking off some 100,000 b/d of light distillate from the market.
Iraq Seeks Investors for First Ever LNG Terminal. Iraq is in advanced talks with US LNG developer Excelerate Energy (NYSE:EE) to build its first-ever LNG import terminal as Baghdad still struggles with power outages and seeks to cut dependence on Iranian imports, under pressure from Trump.
Related: Oil Prices Set For Weekly Loss as War Premium Evaporates
Brazil Offshore Auction Sees Record Interest. Brazil’s 5th Permanent Concession Offer licensing saw the country’s government rake in a record $180 million in signing bonuses after 34 of the frontier exploration blocks were allotted, with state oil giant Petrobras (NYSE:PBR) leading the pack with 13 awards.
Israel Restarts Its Offshore Gas Fields. Israel’s two offshore natural gas fields that supply neighbouring countries Egypt and Jordan have resumed production after the US-brokered ceasefire between Israel and Iran, after both Chevron’s Leviathan and Energean’s Karish were shut for two weeks.
Iran Seeks to Cease Any IAEA Cooperation. Iran’s parliament approved a bill to suspend cooperation with the International Atomic Energy Agency (IAEA) after the US attacks on Fordow and Natanz, stipulating that any future inspection would need the approval of the Supreme National Security Council.
Trump Cabinet Pushes for GoA Auction. The Trump administration is proposing to hold a huge lease sale this December in the Gulf of America (formerly known as Gulf of Mexico) covering 80 million acres and comprising some 15,000 unleased blocks, whilst lowering the Biden-era royalty rates to 16.67%.
Turkey to Expand into Libya’s Offshore. Libya’s National Oil Company signed a memorandum of understanding with Turkish state oil company TPAO for a geological and geophysical study of its offshore areas, less than a week after Tripoli objected to Greece’s hydrocarbon exploration to the south of Crete.
Copper Soars on Weakening Dollar. Copper prices reached a three-month high this week on the back of US dollar sliding lower and LME copper stocks now a third of what they were in January (93,075 tonnes), with cash settlement prices rising above $10,000 per metric tonne for the first time this year.
By Tom Kool for Oilprice.com
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