The sudden escalation in Israeli and Iranian missile attacks and the subsequent Trump-brokered (temporary) cessation of hostilities has prevented another breakout in crude prices, with ICE Brent continuing to linger around $92 per barrel.
Fears of demand destruction are increasingly coming to the forefront, with Chinese buying activity falling into the summer months, traditionally a period of peak demand for the Asian continent.
OPEC+ Is the Group That Keeps on Giving. The seven remaining members of OPEC+ rubberstamped another 188,000 b/d production hike for July, the fourth straight monthly increase despite the closure of the Strait of Hormuz that slashed some 10 million b/d from Gulf countries’ output.
Saudi Aramco Pulls Asian Prices Lower. Saudi national oil firm Saudi Aramco (TADAWUL:2222) slashed its formula prices for July-loading cargoes to Asia by $6 per barrel, reflecting a weakening regional pull and putting its flagship Arab Light grade $9.50 per barrel above Oman/Dubai.
Chinese Oil Imports Slump to 8-Year Low. According to Chinese customs data, crude imports to the Asian powerhouse dropped to just 7.8 million b/d in May, the lowest since October 2017 and almost 4 million b/d lower than a year ago as Beijing leans heavily on run cuts and inventory draws.
Colombia Eyes Venezuela’s Oil Revival. Oil companies in Colombia, a country that has managed to reverse a terminal production decline due to the influx of qualified PDVSA employees fleeing the Maduro regime, are increasingly considering investment opportunities in neighbouring Venezuela.
Norway’s Largest Oilfield Gets Reallocated. France’s TotalEnergies (NYSE:TTE) and Norway’s Aker BP have received slightly bigger stakes in the largest European oil field, Johan Sverdrup, to 8.72% and 31.72% respectively, to the detriment of Norwegian state-controlled hydrocarbon holding Petoro.
Iran War Disrupts China’s New Refineries. Market disruptions due to the US-Iran war have triggered project delays in China’s upcoming downstream projects, with Saudi Aramco’s 300,000 b/d Panjin refinery pushing back its startup from June to early October, similarly to CNPC’s Dalian expansion.
Recovering Runs Curb Russia’s Oil Exports. Russia’s refinery runs are expected to increase by 250,000-400,000 b/d this month after hitting a 17-year low of 4.7 million b/d in May, amidst Ukrainian drone strikes and spring maintenance, slashing exports from its European ports.
Trump Administration Hails Hormuz Progress. US Energy Secretary Chris Wright said that ship traffic through the Strait of Hormuz is rising ‘very meaningfully’, just as Kuwait offered 4 million barrels of its crude to be delivered outside of the Gulf, joining the ranks of the United Arab Emirates.
Ichthys Strike Tightens Australia’s LNG Outlook. INPEX (TYO:1605), the Japanese operator of the Ichthys LNG plant offshore Australia, has hardened its stance vis-à-vis striking employees and asked the country’s workplace tribunal to block industrial action at the facility, planned for June 11.
UK Oil Major Cuts Company in Half. London-based oil giant BP (NYSE: BP) has formalised the restructuring of the company into separate upstream and downstream units, with company veteran Gordon Birrell assuming the former and Richard Harding serving as interim head of downstream.
Trump’s Alaska Auction Fails Spectacularly. The June 5 federal lease sale in the Arctic National Wildlife Refuge disappointed market watchers, with only 5 leases allocated between the state of Alaska itself (3) and a smaller producer, HEX Alaska (2), sapping the outlook for Alaskan drilling.
Vancouver to Dredge TMX Waterway. The Port of Vancouver is launching dredging works this summer to allow Aframax tankers, usually carrying 700,000 barrels, to load fully as the current depth of the waterway from the Westridge Marine Terminal caps TMX loadings at just 550-600,000 barrels.
Gulf Aluminium Woes Start to Bite. Primary aluminium output in Gulf countries plunged to its lowest in more than a decade, to just 330,000 tonnes in May and down 35% from a year ago, paving the way for a boom in Chinese exports that have jumped to 632,000 tonnes last month.
Washington Ups the Ante on China’s Tech. The US Department of Defence added several Chinese business giants, including technology firms Alibaba and Baidu and EV manufacturers BYD and Nio, to its list of companies linked to China’s military, banning them from government-related contracts.
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