Key facts
- Sinopec is increasing purchases of Russian ESPO crude oil for July-September.
- China has allowed 2.7 million tons of oil derivative exports for the current month.
- Chinese supertankers are rerouting around Africa to avoid Red Sea attacks.
- Indian refiners are securing crude from Angola, Congo, and Nigeria.
- European naphtha imports reached 1.74 million tons in July.
- Glencore's energy trading profits increased 66-fold in the first half of 2026.
- APA Corp. beat Q2 profit estimates due to higher oil prices.
- Brent crude futures fell 0.5% to $79.08 a barrel amid peace talks.
- CMRG instructed some steel mills to halt negotiations with Rio Tinto for September shipments.
Global energy markets are navigating significant disruptions stemming from conflict in the Middle East, particularly impacting supply routes and pricing. China's Sinopec has substantially increased its purchases of Russian ESPO crude oil, acquiring 30-40 shipments for July-September to compensate for Middle Eastern supply issues and secure lower costs and delivery certainty. In a related move, China has partially lifted fuel export restrictions, permitting refiners to export 2.7 million tons of oil derivatives this month amid tightening global fuel markets. Chinese very large crude carriers are also rerouting around Africa to bypass Red Sea security risks, even as they resume Saudi oil transport, using Egypt as a transfer point.
Indian refiners are actively seeking alternative crude sources, turning to West African and Omani grades to replace Middle Eastern supplies affected by shipping constraints in the Strait of Hormuz and Bab el-Mandeb. Companies such as MRPL, IOC, and HPCL have secured substantial volumes from Angola, Congo, and Nigeria. European naphtha imports saw an increase in July, reaching 1.74 million tons, with higher arrivals from Mediterranean and North African suppliers, alongside the largest US shipments since August 2025, supported by strong gasoline blending economics.
These market dislocations have fueled substantial profits for some energy traders, with Glencore reporting a 66-fold increase in energy trading profits for the first half of 2026, reaching $2.66 billion, accompanied by a significant rise in trading volumes. APA Corp. also reported second-quarter profits exceeding Wall Street estimates, attributed to higher oil prices, despite a nearly 12% decrease in production. Conversely, oil prices have experienced a decline as progress in Iran-Oman talks has raised hopes for a potential U.S.-Iran peace deal, which could lead to the reopening of the Strait of Hormuz. Brent crude futures fell 0.5% to $79.08 a barrel.
In parallel, China's state iron ore buyer, CMRG, has directed some steel mills to pause negotiations with Rio Tinto for September shipments. This action is intended to consolidate CMRG's bargaining power during the annual supply talks, escalating pressure on the major iron ore producer.