Key facts
- Oil prices are trading in a tight range, indicating market fatigue with geopolitical headlines.
- Iraq and Turkey are in talks to avoid a halt in oil flow through the Kirkuk-Ceyhan pipeline.
- Canada is proceeding with a new oil pipeline to the Pacific coast.
- Qatar has resumed LNG transits through the Strait of Hormuz.
- Japan is increasing coal usage due to high LNG prices.
- Russia is importing gasoline from India to cover domestic shortages.
Oil prices have remained largely stagnant this week, trading within a narrow band between $71 and $73 per barrel for ICE Brent crude. This calm follows a period of significant volatility, and analysts suggest it reflects a market fatigue with the ongoing uncertainty surrounding the U.S.-Iran ceasefire. Traders appear to be looking past geopolitical headlines, awaiting clearer signals on the fragile truce.
Several developments are shaping the global energy landscape. Iraq is engaged in discussions with Turkey regarding the future of the Kirkuk-Ceyhan pipeline, with Baghdad aiming to secure a temporary protocol to avoid a complete halt by the July 27 deadline. Meanwhile, the European Union has broadened its operation targeting tankers that transport Russian oil, leading Cameroon to delist 39 shadow tankers from its registry.
Canada has formally announced plans to construct a new oil pipeline connecting Alberta to the Pacific coast, a move intended to reduce the country's reliance on U.S. transit routes. In Colombia, the incoming administration of President-elect Abelardo de la Espriella is reportedly planning to replace the board of state oil firm Ecopetrol, signaling a potential shift towards pro-oil policies.
Qatar has resumed LNG transits through the Strait of Hormuz after a week-long pause, with its Khuwair LNG carrier expected to depart the waterway soon. This marks a significant development as it is only the sixth cargo sailing to China since the commencement of the U.S.-Iran conflict. In contrast, Japan has drastically cut its gas-fired generation due to high LNG prices, opting to increase its reliance on coal.
Oil exports from the United Arab Emirates saw a rebound in June, reaching nearly a record level as previously idled production facilities in the Persian Gulf gradually return to operation. Pakistan is also looking to increase its imports of liquefied petroleum gas (LPG) from Iran, citing cost efficiency. China's state-backed iron ore buyer, CMRG, has instructed domestic steel mills to stop accepting lower-grade iron ore products from Australian miner Fortescue, adding a new dimension to an ongoing dispute.
Russia has reportedly begun importing gasoline from India to address domestic shortages, particularly in its southern regions and Crimea. In Europe, refinery outages in France and strikes at ExxonMobil's facility in Antwerp have led to a surge in the Northwest European naphtha crack, reaching a 10-year high. Mining firm South 32 is under review for a credit rating downgrade by Moody's following its $5.6 billion deal to sell its bauxite and aluminium assets to Alcoa. Nigeria has become the first OPEC member to join the International Energy Agency as an associate member, aiming to bolster energy security. Kuwait's crude oil output has tripled over the past month, recovering from a multi-year low after drone attacks damaged port facilities amid an Iranian blockade of Hormuz.