Oil Prices Soar After Israel Targets Iran’s Nuclear Program
The geopolitical risk premium is back, with Israel’s strikes on Iran bringing ICE Brent futures to $75 per barrel in a world where OPEC+ continues to unwind its production cuts and global demand is decelerating due to Donald Trump’s tariff wars.
Whilst oil infrastructure was not damaged in Israel’s strikes, the anticipation of Iran’s retaliation is already sending ripples across the oil industry, with the Red Sea becoming a target again and Israel’s gas fields pre-emptively halting production ahead of the weekend, OilPrices.com reports.
Israel’s attack on Iran sent crude prices to their highest in five months, stoking fears that further escalation would impede navigation through the Strait of Hormuz, a waterway transiting a fifth of global oil consumption, some 19 million b/d of crude and products.
The government of Egypt has reached agreements with global traders Saudi Aramco, Trafigura, Vitol and Shell for up to 160 cargoes of LNG, covering the needs of the North African country for H2 2025 and next year, with premiums of $0.70-0.75 per mmBtu above TTF.
Alberta Premier Danielle Smith will be proposing a new crude pipeline route from Alberta to the Port of Prince Rupert in British Columbia to the Canadian government, currently gauging private companies’ appetite for the mulled 1 million b/d conduit.
US oil major ExxonMobil (NYSE:XOM) expects to load its first oil cargo the Guyana’s fourth production unit in August-September, with the grade produced at the Yellowtail and Redtail fields called ‘Golden Arrowhead’ and being lighter than other Guyanese grades.
India is poised to hit a new all-time high after ratcheting up imports of Russian crude, importing over 2.2 million b/d in the first two weeks of June, equivalent to 46% of the South Asian country’s total needs, as Russian grades still trade below the price cap.
ADNOC, the national oil company of the UAE, is reportedly mulling the potential acquisition of Australia’s upstream firm Santos (ASX:STO) whilst concurrently looking at BP’s (NYSE:BP) natural gas assets, some of which might be up for grabs as the UK major deleverages.
Following the path charted by Middle Eastern national oil companies, Algeria has allocated $7 billion in refinery investments for the next five years, including a new refinery in Hassi Messaoud, a new naphtha cracker in Arzew and a new fuel oil cracking unit in Skikda.
The US Environmental Protection Agency is widely expected to propose lower-than-expected biofuel blending requirements for 2026 and 2027, rejecting the 5.25-billion-gallon demand of biodiesel producers, a huge jump from this year’s 5.25 billion gallons.
A US judge in Delaware extended the schedule for the auctioning of Citgo’s shares to August 18, marking yet another hiccup in the eight-year court case as investment firm Red Tree and other bidders are expected to submit improved offers for the refiner’s asset by mid-June.
With sustainable aviation fuel still pricing $1,000 per metric tonne above conventional jet fuel, the European Union offered to subsidize some 200 million litres of SAF to help airline carriers meet the EU’s own stringent mandates as Brussels’ quota rises to 6% by 2030.
According to the EIA’s updated Short-Term Energy Outlook report, US crude oil production will decline next year and mark its first annual dip since the COVID-19 impact of 2021, expecting 13.37 million b/d in 2026 after an average of 13.42 million b/d this year.
US natural gas developer Venture Global (NYSE:VG) withdrew its application for the proposed 24 mtpa Delta LNG facility in Louisiana, instead focusing on the 18 mtpa Plaquemines Expansion Project which already saw a preliminary regulatory nod from the FERC.
Drilling permits for new oil and natural gas wells in Texas dropped by 34% in May to 504, down from 759 in the same month last year, with oil-prolific Midland seeing the largest decline, whilst natural gas permits remained roughly stagnant at 40 permits.
US carmaker Ford (NYSE:F) announced that it was forced to idle production at its Chicago plant producing the Explorer SUV as inventories of rare earth components were ‘day to day’, signalling that potentially other sites could be shut down soon, too.