Tsvetana Paraskova

Iranian crude available to Chinese buyers has nearly dried up after the United States reinstated a blockade on Iran’s oil exports in July. Kpler estimates that Iranian crude held outside the Persian Gulf and Gulf of Oman has fallen to about 83 million barrels, with only roughly 4 million barrels of the Singapore-area floating storage believed to remain unsold. The shortage has pushed Iranian Light crude from a steep discount to a premium over Brent. China, which has purchased more than 90% of sanctioned Iranian oil in recent years, may soon need to replace Iranian feedstock with Russian Urals crude or fuel oil, or reduce refinery throughput as inventories run low.

Diesel crack spreads reached record levels above $100 per barrel in the United States and Europe, signaling severe physical tightness that crude benchmarks such as Brent do not fully reflect. Diesel and gasoil exports from the Middle East and Russia have fallen by more than 50% to about 1.6 million barrels per day, while Chinese exports remain constrained and Strait of Hormuz disruptions limit shipping. U.S. and European refineries are operating near capacity, but middle-distillate inventories continue to decline, with U.S. stocks 12% below the five-year average. U.S. diesel prices have risen to $5.47 per gallon, and seasonal agricultural, freight and heating demand could push prices higher this autumn, increasing inflationary pressure on consumers and businesses.

UK household energy bills are projected to rise 4% from October to about £1,729 annually, their highest level since July 2023. Cornwall Insight attributes the increase to the Iran-related disruption of global gas supplies, more expensive European restocking, elevated wholesale prices and heatwaves that increased demand. Ofgem is expected to announce the higher price cap next week, following a 13% increase already implemented for July–September. The rise in energy costs helped push UK inflation to 2.9% in July, raising concerns about a renewed inflation shock.

A study published in npj Climate Action argues that AI-driven productivity gains in oil and gas could outweigh emissions reductions achieved through AI applications in renewable energy, potentially reinforcing fossil fuels' position in the energy system. Rystad Energy estimates that AI and digitalization could create nearly $500 billion in cumulative value for exploration and production companies from 2026 to 2030 through lower costs, higher output and faster project development, while Wood Mackenzie estimates AI could unlock an additional trillion barrels from existing reservoirs. ExxonMobil is using AI to identify possible new drilling opportunities in Guyana's Stabroek Block, and Chevron says new AI tools could shorten exploration cycles and improve outcomes. The analysis concludes that AI's impact on energy will extend beyond data-center electricity demand and could strengthen major oil and gas producers unless renewable-sector gains substantially exceed fossil-fuel productivity improvements.

Tanker traffic through the Strait of Hormuz has become increasingly unpredictable as vessels make U-turns and wait in lanes approved by Iran. The empty fuel tanker Amara reportedly made several U-turns and remained stationary, while Iran’s Fars news agency claimed that an unnamed tanker owned by a UAE company had been detained near Qeshm Island. Security concerns intensified after a cargo vessel was struck by an unknown projectile, damaging its engine room and injuring a crew member; the remaining crew were assisted by the Omani Coast Guard. Rising tensions involving Iran and the United States pushed Brent crude above $91 per barrel and WTI above $85.

A cargo vessel was struck by an unidentified projectile while transiting the Strait of Hormuz, damaging its engine room and causing one crew casualty. The remaining crew were assisted by the Omani Coast Guard, and no environmental impact was reported. The incident, occurring amid heightened U.S.-Iran tensions and renewed fighting in Lebanon, increased concerns about disruptions to oil and LNG shipments through the strategic waterway. Brent crude rose above $91 per barrel, while WTI exceeded $85, with analysts citing attacks on vessels and deteriorating prospects for a U.S.-Iran agreement.

China is estimated to have added about 200,000 barrels per day of crude oil to storage in July, reversing inventory drawdowns in May and June. The increase followed a rebound in imports from a decade-low in June, while refinery throughput remained depressed and some fuel-export restrictions were eased. Analysts estimate China held roughly 1.2 billion barrels in commercial and strategic crude reserves, suggesting that weaker domestic demand and refining activity enabled continued stockpiling despite the Middle East supply disruption and Strait of Hormuz crisis.

Security threats by the Iran-aligned Houthis in the Bab el-Mandeb Strait and Red Sea have led at least two Asian refiners to ask Saudi Aramco to make September crude cargoes available at Egypt’s Sidi Kerir port rather than Yanbu. Aramco has rerouted some shipments through Ain Sukhna and the SUMED pipeline, but the longer Mediterranean route around Africa raises transport costs and may cause at least one refiner to cancel its monthly allocation. South Korean and Japanese refiners were offered the alternative pickup point, while most buyers in China, India and Taiwan remained assigned to Yanbu.

The ongoing U.S.-Iran standoff and effective closure of the Strait of Hormuz are disrupting Middle Eastern crude flows, prompting North Asian refiners to secure alternative supplies from the United States. GS Caltex, Cosmo Energy Holdings, Eneos, and Taiwan’s CPC Corporation reportedly bought Mars or WTI crude for November delivery at substantial premiums. Indian refiners MRPL and HPCL are also seeking 6 million barrels through spot tenders as term supplies face constraints. Tight fuel markets and strong refining margins are encouraging refiners to maintain operations despite higher procurement costs.

India is pursuing two additional strategic petroleum reserve sites at Bikaner in Rajasthan and Bina in Madhya Pradesh, with ISPRL conducting feasibility work. The plans complement an ONGC-led facility at Mangaluru in Karnataka, designed to hold about 13 million barrels, half for strategic storage and half for commercial operations. The expansion follows disruptions to Middle Eastern crude flows through the Strait of Hormuz and reflects India’s vulnerability to supply shocks, as existing reserves cover only about eight days of national demand. India has also relied on record Russian crude imports to offset lost Middle Eastern supplies.

The UK’s National Energy System Operator warned of an estimated 1.2-gigawatt power-margin shortfall between 6 p.m. and 8 p.m. on August 12 as a solar eclipse reduces generation during a period of high heatwave-related demand. The operator said there is no threat to customer supplies but may instruct generators to provide additional capacity. The UK will experience a partial eclipse, with sunlight coverage reaching about 90% in London and up to 95% in Cornwall.

OPEC’s 11-member output rose by 1.17 million barrels per day in July to 19.85 million bpd, marking a second consecutive monthly increase as Gulf producers restored some production disrupted by the Strait of Hormuz blockade. Iraq and Kuwait led the gains, while Iran also increased supply during a two-week easing of the U.S. blockade. Despite the recovery, production remained below OPEC+ quotas because shipping constraints and Persian Gulf security risks continued to restrict exports. OPEC+ plans to raise targets by another 188,000 bpd in September, but actual production may fall 1.65 million bpd short of the level implied by the group’s unwinding of its 2023 cuts.

Greenland’s government has warned that drilling equipment for the Jameson Land oil project was moved without the required authorization and that future logistical activity must receive prior approval. The project’s licensee, London-listed 80 Mile Plc, is working with U.S. Greenland Energy Company, chaired by Trump-linked businessman Larry Swets Jr., which plans to fund up to two exploration wells. The companies say permitting and technical preparations are progressing, but have agreed to focus the 2026–2027 winter program on one well. Any drilling would mark Greenland’s first major oil exploration effort in years, although analysts stress that the island’s harsh climate, limited infrastructure, high costs and history of unsuccessful exploration make commercial development uncertain. Greenland abandoned new oil exploration in 2021, citing environmental concerns.

India’s dependence on primary energy imports declined from 47% in fiscal year 2017 to about 42% in fiscal year 2025, but crude oil imports still meet roughly 90% of domestic demand. Falling domestic production and rising consumption leave India vulnerable to disruptions, particularly amid Middle East tensions and reduced flows through the Strait of Hormuz. Russia and West Africa have provided alternative supplies, while ONGC plans to build a 13-million-barrel storage facility in Mangaluru; however, India’s existing reserves cover only about eight days of national demand.

Indian state-run refiners are increasing purchases of West African and Omani crude as shipping constraints around the Strait of Hormuz and Bab el-Mandeb disrupt Middle Eastern term supplies. HPCL bought 2 million barrels of Nigerian Forcados and Bonga crude for its Visakh refinery and had earlier purchased 2 million barrels of Okwuibome and Utapate crude for its Rajasthan refinery. MRPL acquired about 1 million barrels from Oman, while Indian Oil bought 4 million barrels of Angolan and Congolese grades from Chevron. Indian refiners are also seeking supplies from Angola and Venezuela as Middle Eastern cargoes remain trapped or delayed.

Sinopec, China’s largest refiner by capacity, has increased purchases of Russia’s ESPO crude for delivery from July through September as Middle East shipping disruptions threaten supplies. The Far Eastern blend reaches China in about a week, costs less than comparable West African and Brazilian grades, and offers greater delivery certainty. Chinese refiners had suspended Russian purchases after U.S. sanctions on Rosneft and Lukoil but resumed them in March after sanctions waivers and worsening Gulf supply risks. Eased Chinese fuel-export restrictions could support a broader recovery in crude imports after June’s decade-low level.

Wars involving Iran and Ukraine have tightened global supplies of gasoline, diesel and jet fuel through disruptions around the Strait of Hormuz, reduced Asian refining, Russian diesel restrictions and China’s temporary export ban. Refining margins have reached record levels despite crude-price volatility, helping Shell, TotalEnergies, ExxonMobil and Chevron post their strongest quarterly results in years. Executives and analysts expect elevated margins to persist for several quarters because inventories are low, supply disruptions remain unresolved and markets will need to restock even if Middle Eastern flows recover.

Pakistan’s state-owned Oil and Gas Development Company Limited has partnered with Canada’s Synergetic Oil Tools to deploy Passive Energy Tool technology in heavy crude fields. The system is intended to improve flow in highly viscous wells, reduce workovers, downtime, operating costs and chemical use. The initiative comes as Pakistan seeks to raise domestic oil production, reduce import dependence and attract additional regional crude supplies. OGDC produces about 166,497 barrels of oil equivalent per day and accounts for approximately 49% of Pakistan’s domestic crude output.

The Northern Territory Environment Protection Authority recommended 23 measures to strengthen pollution controls and emissions reporting for the Darwin Airshed, covering Inpex’s Ichthys LNG and Santos’ Darwin LNG facilities. The review followed Inpex’s substantial upward revision of its 2023/24 emissions estimates, including benzene, after discrepancies were found in reporting methods. Proposed measures include numerical pollution limits, maximum mass-emission rates, tighter restrictions on hot venting, five-year best-practice audits, and continuous monitoring of acid-gas streams at Ichthys LNG.

Six empty Saudi oil tankers have turned away from the Bab el-Mandeb Strait and begun routing around Africa toward refueling hubs such as Gibraltar, Durban, and Algoa Bay after Houthi threats and attacks on Saudi-linked shipping. The detour could add at least two weeks to supertanker journeys. Saudi Arabia is also rerouting crude through Yanbu, Egypt’s Ain Sukhna port, the SUMED pipeline, and Sidi Kerir, with at least eight VLCCs reportedly headed to Sidi Kerir to load Saudi oil.

Two oil tankers attempting to leave the Strait of Hormuz via the southern lane near Oman reportedly turned back after one caught fire, according to Iran’s Islamic Revolutionary Guard Corps. Iran considers the U.S.-protected route unsafe and says the strait will remain closed while U.S. officials threaten or interfere with regional maritime movements. The report says tanker traffic has largely halted or shifted to transponders-off “dark mode” operations since hostilities resumed, while U.S. strikes on IRGC targets and broader regional attacks threaten further escalation. Brent crude rose above $90 per barrel as shipping risks intensified.

The U.S. Department of Energy selected Utah, Tennessee, Oklahoma, Louisiana, and Idaho as potential hosts for Nuclear Lifecycle Innovation Campuses. The facilities would support spent-fuel storage and reprocessing, fuel enrichment and fabrication, advanced-reactor development, nuclear manufacturing, and potentially co-located data centers. DOE estimates the campuses could attract up to $50 billion in investment, generate $10 billion in state and local tax revenue, and create nearly 25,000 jobs. The initiative is intended to address the United States’ growing spent-fuel stockpile, reduce dependence on foreign enriched uranium, and help quadruple U.S. nuclear capacity to 400 gigawatts by 2050.

Houthi threats and attacks in the Red Sea and Bab el-Mandeb have pushed tanker traffic to a multi-month low and prompted Saudi Arabia and Western operators to reroute shipments. At least eight empty VLCCs are heading to Egypt’s Sidi Kerir port, where Saudi crude can be transported via Ain Sukhna and the SUMED pipeline, while some tankers may continue around the Cape of Good Hope to reach Asia. Operators are also switching off transponders to reduce the risk of attack, and traffic through the Strait of Hormuz remains subdued despite U.S.-Iran de-escalation efforts.

A 20% July surge in jet fuel prices, driven by renewed Middle East tensions and extreme oil-market volatility, has forced major U.S. airlines to revise their earnings outlooks. United Airlines expects nearly $6 billion in additional 2026 fuel costs, while American Airlines reported record quarterly revenue but cut its full-year and third-quarter earnings forecasts as fuel expenses rose more than 80% year over year. Southwest Airlines also reported higher fuel costs that reduced adjusted earnings despite beating consensus expectations. The developments show how geopolitical disruptions and oil-market chokepoints are undermining airlines’ ability to forecast profits even amid strong passenger demand.

Australian gasoline prices reached US$1.27, or A$1.82, per liter in the week ending July 26, their highest level since late March, while diesel prices also climbed. The increases followed Middle East hostilities and higher international crude prices, compounded by Australia’s dependence on imported transportation fuels and a refinery fire. The federal government responded by temporarily halving fuel excise and securing additional diesel and jet-fuel shipments from regional suppliers, but continued geopolitical uncertainty threatens Australia’s consumers, economy and monetary policy.

Renewed U.S.-Iran hostilities have tightened global fuel markets and pushed Brent crude above $100 per barrel, driving U.S. jet-fuel costs sharply higher. Southwest Airlines chartered a shipment of about 12.6 million gallons from Houston to Los Angeles through the Panama Canal after the Trump administration temporarily waived Jones Act restrictions. Higher fuel expenses have prompted major U.S. carriers to cut 2026 earnings guidance: Southwest reported a $900 million year-over-year increase in second-quarter fuel costs, American reported an $2.2 billion increase, and United expects nearly $6 billion in additional full-year fuel expense. With summer demand still strong but fuel markets constrained, airlines are likely to pass at least some of the increased costs on to passengers through higher airfares.

The article argues that escalating conflict has invalidated earlier forecasts of an impending crude-oil glut. Iranian restrictions have sharply reduced flows through the Strait of Hormuz, Houthi attacks are disrupting Saudi tanker routes through Bab el-Mandeb, and Ukrainian strikes have constrained Kazakh exports through Novorossiysk while damaging Russian refining capacity. Tight refining capacity and reduced fuel inventories have pushed global refining margins to record highs despite weaker oil demand. The combined supply disruptions and depleted strategic buffers could deepen energy shortages and raise the risk of a global recession, even though the IEA says OECD countries retain more than 1 billion barrels of government-controlled emergency stocks.

Carbon capture and storage has attracted billions in government and corporate investment as a proposed solution for emissions from hard-to-abate industries. However, an IEEFA review found that most of 13 operating projects captured below their designed rates, while the Global CCS Institute reported that all operating facilities together captured only about one-thousandth of global emissions in 2024. Costs are also rising, with estimates reaching $20–$30 per MWh for U.S. gas plants and $170–$340 per tonne in Europe. Critics argue that CCS enables fossil-fuel companies to delay emissions cuts and promote low-carbon fossil fuels, and they urge governments to prioritize permanent low-carbon alternatives, using CCS only in limited cases.

Insurers are cutting premiums for upstream oil and gas projects outside the Middle East by roughly 25% on average, with reductions of up to 50% in some cases, as conflict and Strait of Hormuz disruptions make Middle Eastern developments riskier. Oil majors are redirecting attention toward lower-risk or strategically attractive basins in Guyana, Namibia, Brazil, Nigeria, Venezuela, Türkiye, Cyprus and other regions. ExxonMobil is advancing multibillion-dollar Nigerian and Guyanese projects, Chevron is expanding in Guyana and Venezuela, and BP, Shell, TotalEnergies and Galp are pursuing African and Black Sea opportunities. Strong oil prices and recent exploration returns are reinforcing the shift toward geographically diversified upstream investment.

Brent crude climbed above $98 per barrel and WTI approached $90 after Houthi forces claimed attacks on two Saudi oil tankers near the Bab el-Mandeb Strait. The incidents prompted some vessels to reroute and heightened fears of disruptions to Middle Eastern oil supplies, particularly after Saudi Arabia redirected more than 70% of certain exports to the Red Sea port of Yanbu. Oil prices had gained nearly 20% in about two weeks as markets priced in escalating regional and shipping risks.

New pipeline capacity, including the Gulf Coast Express expansion and Energy Transfer’s Hugh Brinson Pipeline, has helped Waha natural gas prices turn positive after averaging below zero during the first half of 2026. However, Permian Basin producers and industry analysts expect takeaway constraints to persist until at least 2027. Planned Texas projects could add substantial capacity, but sustained high oil prices may encourage more drilling and associated gas production, creating renewed congestion.

Nigerian billionaire Aliko Dangote has proposed investing $17 billion in a 700,000-barrel-per-day refinery on Kenya’s Lamu Island. The facility would exceed current East African refined-fuel demand, supply Kenya and neighboring countries, process regional and imported crude, and potentially create more than 60,000 jobs. Supporters see it as a way to reduce fuel-import dependence and advance AfCFTA trade, building on the success of Dangote’s Nigerian refinery. The plan faces opposition over risks to Lamu’s UNESCO-listed marine ecosystem, carbon emissions, possible stranded assets, and the prospect of Dangote gaining excessive control of regional fuel markets.

Base metals are being pulled between structural supply deficits and AI-driven infrastructure demand on one side, and high energy costs, inflation fears, tighter monetary policy and weak global-growth expectations on the other. Copper has the strongest outlook because of constrained supply and rising demand from power grids, renewable energy and AI data centers. Aluminum prices have fallen sharply, but the selloff may be excessive because idled Middle Eastern capacity is unlikely to return simultaneously. Platinum-group metals face greater pressure from weaker automotive demand, rising recycling and higher inventories; palladium has the weakest outlook, while platinum and rhodium are relatively more resilient.

Japan’s nationwide day-ahead electricity price reached ¥24.78 per kWh, its highest level since January 2023, after rising 24% during the week. Extreme heat, soaring spot LNG prices, and a weakening yen are driving the increase, while forecasts of temperatures above 40°C through early August could sustain demand. Renewed Middle East hostilities and disruption to shipping through the Strait of Hormuz have restricted Qatari LNG supplies and pushed Asian and European natural gas prices higher.

Equinor reported second-quarter adjusted operating income after tax of $3.225 billion, up 93% year over year, while adjusted operating income rose 76% to $11.482 billion. Higher global liquids prices, stronger European natural gas prices and a 3% increase in equity production to 2.165 million barrels of oil equivalent per day drove the gains. Operating cash flow surged to $9.47 billion from $2.477 billion. The results highlight the windfall profits expected among major energy companies amid the Middle East crisis and elevated oil and gas prices, although lower U.S. natural gas prices partially offset Equinor’s performance.

China’s crude imports fell 41.3% year over year in June to a decade-low 7.12 million barrels per day, helping limit oil-price gains during the Middle East supply crisis. Beijing has also begun drawing down an estimated 1.2–1.4 billion barrels of strategic and commercial stockpiles. With oil prices near $90 per barrel, lower Gulf producer selling prices and relaxed Chinese fuel-export restrictions could prompt refiners to increase crude purchases in July and August. However, renewed price increases, weak domestic fuel demand, and inventory requirements could limit the rebound, making China’s import and refined-product export policies key factors for oil markets through the rest of the year.

The UK’s new Labour government will remove the 5% VAT on domestic electricity bills from October 1, aiming to reduce annual household costs by about £45 and offset a recent 13% increase in energy prices. The measure, which is expected to apply to customers on both fixed and variable tariffs, will also benefit eligible small businesses, charities and residential care homes. It will be funded this financial year by cancelling the £1.8 billion Digital ID programme.

Rapid AI data-center expansion is creating a severe shortage of electricity, grid connections, transmission capacity, transformers, and suitable sites, potentially making power more valuable than chips or software. The article highlights Bitzero’s hydro-powered sites and development pipeline in Norway, Finland, and North Dakota, including a proposed 15-year, $2.6 billion lease with OneQode for 110 megawatts at Namsskogan. It frames Bitzero as a potential AI infrastructure and power company rather than merely a Bitcoin miner, while also pointing to opportunities for server, connectivity, and cybersecurity companies. The piece is strongly promotional and includes a disclosure that OilPrice.com’s owner holds Bitzero shares or options, creating a significant conflict of interest.

Gail Tverberg argues that an Iran-related oil supply crunch could push crude prices below $40 per barrel rather than trigger a lasting price spike. She contends that depleted oil buffers, damaged infrastructure, transport lags, reduced consumption, government restrictions, and a weakening global economy would cause demand and economic output to contract faster than supply, producing recession and shortages of goods and services. The article also forecasts continuing disruptions to oil, fuel, sulfur, and LNG supply chains, criticizes the United States’ strategic position after the Iran conflict, and advocates shorter, more regional supply lines as economies adapt.

The Middle East conflict has disrupted more than one billion barrels of oil supply, but China’s roughly billion-barrel strategic stockpile allowed it to cut imports and limit the price shock. The International Energy Agency plans to replenish the 400 million barrels released during the crisis, while the United States, India and China are also expected to rebuild or expand reserves. This coordinated stockpile buying could create a significant new source of crude demand after the conflict, supporting higher oil prices even as governments accelerate renewable-energy investments. The International Energy Agency expects global oil demand to rebound in 2027 after a decline in 2026.

Donald Trump said Iran had requested a meeting in Doha on Tuesday, suggesting a possible diplomatic opening after renewed U.S.-Iran strikes and escalating tensions around the Strait of Hormuz. Iranian officials disputed that technical talks were scheduled, although reports indicated implementation discussions could occur later. Commercial shipping through the strait remains significantly below normal after attacks on vessels, while Tehran has warned that interference could further delay reopening the waterway and complicate negotiations.