Oil prices continued to surge upwards due to supply concerns caused by geopolitical tensions between Israel and Iran, with neither side showing signs of backing down as airstrikes continued throughout the week.
BKR Rig Count | The total active drilling rigs in the United States decreased by 1 last week, to 554. Oil rigs dropped by 1 to 438, and gas rigs dropped by 2 to 111. Rig count in the Permian Basin dropped by 2 to 271 | Jun 20 | BKR NAM Rig Count
US Crude Inventories, excluding those in the Strategic Petroleum Reserve (SPR), decreased by 11.5 MMbbl to 420.9 MMbbl (about 10% below the 5y average for this time of year). On the products side, gasoline increased by 0.2 MMbbl (2% below the 5y average). Distillate fuels increased by 0.5 MMbbl (17% below the 5y average). Total commercial petroleum inventories decreased by 6.6 MMbbl | June 13 | EIA Weekly Report
Iran issues new threat to shut Strait of Hormuz chokepoint, “extremely unlikely” according to analysts | Iran’s Parliament voted Sunday to close the Strait of Hormuz. However, analysts have suggested that a closure of the passage “remains extremely unlikely”, arguing that Iran is reliant on maintaining good relations with regional neighbours such as Saudi Arabia and the United Arab Emirates. Additionally, Kpler noted that “Tehran is unlikely to risk isolating Beijing.” “Traders are starting to think there is nothing here: we are up $10 a barrel since the war started, now a little more, and so I think there is an appropriate amount of risk in the market,” said Bob McNally, founder of Rapidan Energy Advisers LLC and a former White House energy official | Jun 19 | Upstream, Bloomberg
US crude oil inventories fell by 11.5 million barrels in the week ending June 13, 2025 – the steepest drop since June 2024, per the EIA. Most of the decline occurred in the Gulf Coast, where stockpiles are now at their lowest since December 2023. The drawdown is driven by increased demand from refiners producing more gasoline for the summer driving season combined with a decrease in net crude imports. An analyst from Kpler highlights robust exports, lower imports, and high crude inputs as contributing to the "massive draw". Although this indicates a tightening market in the US and it could exert upward pressure on prices, it's important to consider it within the broader context of global supply and demand and ongoing geopolitical events | Jun 19 | Bloomberg
US Federal Reserve officials voted to hold rates steady and released new forecasts showing weaker growth, higher inflation, and higher unemployment this year. Interest-rate projections show a split among policymakers, with some expecting at least two rate cuts before the end of 2025, and others seeing no cuts this year. Fed officials and economists expect the expanded use of tariffs to weigh on economic activity and put upward pressure on prices, with Chair Jerome Powell saying they want to see the impact of tariffs before making judgments on policy. Federal Reserve Governor Christopher Waller however said on Friday that the central bank can lower interest rates as soon as next month | Jun 18, 20 | Bloomberg
The Bank of England held interest rates at 4.25% in a divided vote, with six members voting to leave rates unchanged and three preferring an immediate quarter-point reduction. The committee expects a significant slowing in pay growth and sees signs of disinflationary pressures from the labor market, leaving its core guidance unchanged that future rate cuts will be "gradual and careful". Traders are betting on further interest-rate cuts, fully pricing two quarter-point reductions in 2025, and the pound and gilt yields have slipped as a result | Jun 19 | Bloomberg
A recent U.S. Geological Survey (USGS) report indicates that there are significant amounts of undiscovered oil and natural gas beneath federal lands, an estimated 29.4 billion barrels of oil and 391.6 Tcf of natural gas, that could be technically recovered from federal lands. The assessment, focused on technical feasibility not economic viability, as part of a broader Interior Department effort to identify energy and critical mineral resources on public lands. The area has previously yielded significant oil and gas, and the initiative responds in part to an "energy emergency" declared by President Donald Trump | Jun 18 | US DOI
China National Petroleum Corporation (CNPC) has ordered the emergency evacuation of all company personnel from Iran amid escalating military conflict with Israel.The move comes after China's embassy in Tehran issued an urgent security alert warning all Chinese nationals to exit Iran immediately via land routes | Jn 18 | Upstream
Senate Republicans included a tax break estimated to be worth more than $1 billion for oil and gas producers in their version of President Donald Trump’s sprawling fiscal package. The provision would allow energy companies subject to a 15% corporate alternative minimum tax to deduct certain drilling costs when calculating their taxable income. Companies including ConocoPhillips, Ovintiv Inc. and Civitas Resources, Inc. lobbied in favor of it | Jun 18 | Bloomberg
Looking ahead
IEA Oil 2025 | Heightened geopolitical risks, unresolved trade tensions, and policy shifts have added myriad uncertainties to the oil market outlook. Since the start of the year, major forecasters have cut 2025 world GDP growth outlooks by roughly half a percentage point to around 2.8%, with about 3% expected annually for the rest of the decade, with knock-on implications for oil demand. Conflicts in the Middle East and ongoing trade talks further deepen forecast uncertainties. OPEC+, led by Saudi Arabia, decided to unwind oil production curbs starting May 2025, resetting IEA’s oil supply trajectories through 2030. The prospect of higher OPEC+ output and rising tariffs pushed prices to four-year lows in April and early May. Oil executives responded by revising investment plans. Prices later rebounded after air strikes between Israel and Iran on 13 June 2025. Oil supply security remains a key international policy issue. The market is going through a fundamental transformation as global oil supply and demand patterns shift. Between 2015–2024, the US drove 90% of global supply growth, increasing output by over 8 mb/d to 20 mb/d. Chinese demand rose nearly 6 mb/d—60% of global oil use growth. To 2030, Chinese demand is on track to peak this decade due to surge in EV sales, LNG trucks, high-speed rail growth, and structural economic shifts. US supply growth slows as companies scale back investments but remains the top non-OPEC+ contributor. Global oil demand will rise by 2.5 mb/d from 2024 to 2030, plateauing at 105.5 mb/d. Annual growth slows from ~700 kb/d in 2025–2026 to near-flat growth, with a slight decline expected in 2030. This is driven by below-trend economic growth, trade tensions, fiscal imbalances, and accelerating substitution away from oil in transport and power generation. Electric car sales are expected to surpass 20 million in 2025, representing one-quarter of all cars sold, set to displace 5.4 mb/d of oil demand by 2030. Substitution away from oil will also feature prominently in power generation during the forecast period – particularly in Saudi Arabia, where displacement of oil burning by natural gas and renewables drives the single largest decline in oil demand for any country through 2030. As the transport and power generation sectors continue to diversify towards other fuels, petrochemicals will dominate global oil demand growth from 2026, tied to natural gas liquids (NGLs). China and the US lead petrochemical capacity expansion at the expense of Europe and other Asian economies. Upstream oil investment is set to fall by 6% to around USD 420 billion in 2025, with major declines in US light tight oil. Investment in conventional projects is more resilient in 2025. Nonetheless, lower oil prices and higher production costs from tariffs and material inflation could lead to deeper cuts. World oil production capacity is forecast to rise by 5.1 mb/d to 114.7 mb/d by 2030, led by Saudi Arabia and the US, outpacing demand growth. Mirroring demand trends, supply capacity growth is heavily frontloaded, slipping from 1.8 mb/d in 2025 to contraction after 2029 as the pipeline of non-OPEC+ projects wanes | Jun 16 | IEA
China Mobility: Favorable policies, technological improvement to drive LNG heavy-duty truck growth | In March 2025, the Ministry of Transport (MOT), the National Development and Reform Commission (NDRC), and the Ministry of Finance jointly issued the Notice on the Implementation of Scrapping and Replacement of Old Commercial Trucks, which for the first time includes gas-fueled medium-duty and heavy-duty vehicles in the subsidy scope. The policy aims to phase out older and high-emissions trucks, promote green logistics initiatives, and reduce pollution and emissions from road transportation. In our outlook, gas demand for LNG HDTs is expected to nearly double from the current level, increasing from 22 Bcm in 2024 to 39 Bcm by 2030. In addition to LNG HDTs, the rise of new energy HDTs will continue to encroach upon the market share of diesel HDTs. To ensure a 1.5-year payback period, LNG wholesale prices will need to average below $11.6/MMBtu. In the absence of subsidies, the payback period would be extended by at least 1.5 years at the same wholesale price, which diminishes the incentive for truck owners to switch to LNG HDTs. As the driving range and economic efficiency of LNG HDTs improve, the development of LNG refueling stations becomes increasingly vital. However, the total number of refueling stations in China remains relatively low and unevenly distributed, which affects the market penetration and convenience of LNG HDTs. In the short to medium term, we expect that electric trucks will increase market penetration in specific short-distance transportation scenarios, competing favorably against LNG HDTs. However, in the medium- to long-distance freight segment, there is less competition from electric trucks, and LNG trucks retain an economic advantage over diesel trucks. The long-term outlook for LNG HDTs is promising, with gas demand projected to nearly double from 22 Bcm in 2024 to 39 Bcm by 2030 | Jun 12 | S&P
