Key facts
- Oil prices surged over 6% to a two-week high.
- President Donald Trump declared the Iran ceasefire over.
- The US military struck dozens of Iranian targets.
- QatarEnergy shut down its Ras Laffan LNG export plant.
- European gas prices soared following Qatar's LNG plant shutdown.
- Exxon Mobil anticipates second-quarter upstream earnings between $3.5 billion and $3.9 billion.
- U.S. airlines' May fuel costs increased 85% to $6.7 billion.
- Saudi Arabia is considering a pipeline expansion to bypass the Strait of Hormuz.
- U.S. crude oil inventories fell by 399,000 barrels in the week ending July 3.
- U.S. container imports surged 8.2% in June.
- Jet2 reported a 7.1% year-on-year increase in summer holiday bookings.
Oil prices experienced a significant surge, climbing over 6% to reach a two-week high. This escalation followed President Donald Trump's declaration that the Iran ceasefire was over. In response to attacks on three tankers in the Strait of Hormuz, the U.S. military conducted strikes on dozens of Iranian targets. Concurrently, QatarEnergy announced the shutdown of its Ras Laffan facility, the world's largest LNG export plant, due to an Iranian drone attack. This unprecedented halt affects approximately one-fifth of global supply, causing European gas prices to soar and raising concerns about global energy security.
Exxon Mobil indicated in a regulatory filing that its second-quarter upstream earnings are projected to increase to between $3.5 billion and $3.9 billion, a rise attributed to fluctuations in oil prices. This contrasts with its first-quarter upstream earnings of $5.7 billion and a net profit of $7.1 billion in the prior year's second quarter. U.S. airlines faced substantially higher fuel costs, with May expenditures jumping 85% year-on-year to $6.66 billion. This increase was driven by rising prices rather than increased consumption, as the average cost per gallon reached $4.09, an 85% increase from May 2025. The overall oil market sentiment is complex, shifting from concerns about oversupply due to increased OPEC and U.S. production to worries about potential future tolls for passage through the Strait of Hormuz.
Amidst these regional tensions and shipping disruptions, Saudi Arabia is exploring a significant expansion of its East-West crude pipeline. This expansion could add 2 million barrels per day, aiming to provide an alternative route that bypasses the Strait of Hormuz and reduces reliance on this critical chokepoint. In other developments, U.S. crude oil inventories fell by 399,000 barrels in the week ending July 3, according to API estimates, with gasoline and distillate inventories also decreasing. Despite ongoing draws from the Strategic Petroleum Reserve, overall U.S. crude inventories remain considerably below their capacity. Jet2 reported a rebound in summer holiday bookings, with sales up 7.1% year-on-year, partly attributed to a fragile ceasefire in the Middle East and the company benefiting from fixed jet fuel contracts. U.S. container imports also saw a notable increase, surging 8.2% in June from the previous year, with the Port of Los Angeles experiencing its busiest June ever, as importers sought to avoid potential new tariffs and higher transportation costs.