Oil
Oil markets brace for a summer of Hormuz volatility
With the Hormuz still half-open, the oil markets are increasingly pricing in a period of summer volatility.
The resumption of missile attacks between the US and Iran has not helped shippers to deflate war risk premiums and insurance costs, yet flows out of the Gulf continue to trend higher than they were before the signing of the MoU.
ICE Brent has gained more than $1 per barrel so far this week, trending above $73 per barrel, a new flashy headline could send oil prices in any direction now, OilPrice.com reports.
Iran’s Foreign Ministry has announced that it would allow ships to transit the Strait of Hormuz only if they use the northern route closest to its coast during the current 60-day ceasefire period, asking Oman to redirect all vessels towards Iran’s coast.
Chinese authorities have lifted restrictions on some refined products exports this week, partially rolling back the export ban introduced March 12, as state-controlled refiners were allowed to export gasoline and diesel freely from July onwards.
US natural gas futures jumped above $3.3 per MMBtu for the first time since February this week, lifted by forecasts of heatwaves in the country’s northeast with New York expecting record temperatures above 100 degrees Fahrenheit this Thursday and Friday.
ADNOC, the national oil company of the UAE, is changing its pricing methodology for the sales of its offshore grades, detaching them from a previous link to IFAD Murban futures and pricing them at a differential to the Dubai benchmark from now onwards.
Russia’s President Vladimir Putin has extended the country’s ban on supplying crude oil and refined products to legal entities and individuals if the contracts directly or indirectly stipulate the use of the $44.10 per barrel price cap mechanism.
The naphtha pipeline feeding India’s privately owned Haldia Petrochemicals caught fire on the morning of June 30, lowering the outlook for regional naphtha demand and lifting polyethylene as Haldia is the 2nd largest producer in India.
Iraq’s new prime minister Ali al Zaidi has launched an anti-corruption investigation that saw the arrests of deputy oil minister Ali al-Bahadli (already under US sanctions) and several top-ranking officials at the ministry, accused of misappropriating public funds.
Caught flat-footed by the Hormuz crisis, the Japanese government now plans to revamp its energy strategy with a new plan expected by end-August, pledging to boost energy resilience and expedite decarbonization, seen as a pro-nuclear move.
Pakistan’s state-owned Pakistan LNG has bought an extremely prompt cargo of LNG from Qatar, for a June 30 to July 4 delivery, at a $16.74/MMBtu price, some $2/MMBtu above the market price, as the Asian nation faces summer blackouts.
US oil major ExxonMobil (NYSE:XOM) declared commerciality on the Glaucus and Pegasus offshore gas discoveries, with combined reserves estimated at 8-9 TCf, expecting an FID on those projects in 2029 and first production by 2033.
The European Commission unveiled new steel import quotas to protect the region’s industry from global overcapacity, slashing the tally of tariff-free import quotas by 47% to 18.3 million metric tonnes and adding a new 50% duty on steel products.
The World Bank has announced that it would drop its commitment to allocate 45% of its annual lending to projects that wield climate co-benefits, reacting to Scott Bessent’s critique of the target, saying it ‘bred inefficiency and distorted decision making’.
The Indian government has removed restrictions on the sale of gasoline and diesel imposed on commercial buyers, previously setting the maximum limit at 200 liters/day per customer, citing an improving outlook for domestic oil supply and refinery runs.
Sapping the car industry’s demand outlook for copper, Ferrari and BMW have both rolled out new EV models that replace copper wiring with aluminium, currently a quarter the price of copper futures, whilst also saving up to 20% of total wiring weight.
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