Key facts
- Brent crude oil prices declined to a two-month low of $88 per barrel.
- Conflicting statements from U.S. President Trump and Iran fueled uncertainty over a potential deal.
- China's nominated volume of Saudi crude for July loading is at a record low.
- OPEC revised its 2026 demand growth forecast downward for the second month.
- Russia's oil production reached a 12-month low of 9.01 million b/d in May.
- Asia's spot LNG prices rose to an 11-week high of $19.20 per MMBtu for August delivery.
Oil prices experienced significant volatility, with Brent crude futures falling to a two-month low of $88 per barrel. This decline was attributed to conflicting signals from Washington and Tehran regarding a potential U.S.-Iran deal, creating market uncertainty. Traders reacted to a week of shifting narratives, where announcements of a potential breakthrough by President Trump were often followed by denials from Iran, and vice versa.
Beyond the U.S.-Iran dynamic, several other factors contributed to the market's downward pressure. Chinese refiners nominated a record-low volume of Saudi crude for July, deterred by high formula prices. OPEC further revised its 2026 demand growth forecast downward for the second consecutive month, now expecting consumption to rise by 970,000 b/d, a reduction of 200,000 b/d from the previous month.
In other energy market news, U.S. Energy Secretary Chris Wright highlighted the U.S. military's role in facilitating the transit of 7 million barrels per day of crude oil out of the Persian Gulf. Canada's Alberta government is planning a new 1 million b/d pipeline to its Pacific Coast by 2027, anticipating strong interest from Asian refiners. The Trump administration imposed sanctions on Cuba's state-owned oil company, Cupet, citing its use of energy trade to repress its population. India lodged a formal protest with the U.S. following military strikes that killed three Indian sailors on a product tanker off the coast of Oman.
Venezuela signed five agreements with Shell to advance oil and gas projects, including the Loran offshore field. Australian oil major Woodside exercised its pre-emptive right to acquire PetroChina's stake in the Browse gas fields. Egypt announced it has settled all outstanding debts to international oil and gas companies, aiming to restore investor confidence. China's Commerce Ministry released its second batch of product export quotas for 2026. Russia's oil production fell to a 12-month low of 9.01 million b/d in May, impacted by Ukrainian drone strikes on its refineries. Asia's spot LNG prices surged to an 11-week high, with August cargoes assessed at $19.20 per MMBtu, driven by anticipated heatwaves and low gas stocks in South Korea and Japan. Norwegian company Norsk Hydro declared force majeure on aluminium sales from Qatar after its Qatalum joint venture terminated its marketing agreement.