Another week of minor movements for oil prices, with geopolitical tensions in the Middle East countered by easing supply concerns as US President Trump gave Russia 50 days to avoid new sanctions.
BKR Rig Count | The total active drilling rigs in the United States increased by 7 last week, to 544. Oil rigs dropped by 2 to 422, and gas rigs increased by 9 to 117. Rig count in the Permian Basin dropped by 2 to 263 | Jul 18 | BKR NAM Rig Count
US Crude Inventories, excluding those in the Strategic Petroleum Reserve (SPR), decreased by 3.9 MMbbl to 422.2 MMbbl (about 8% below the 5y average for this time of year). On the products side, gasoline increased by 3.4 MMbbl (slightly above the 5y average). Distillate fuels increased by 4.2 MMbbl (21% below the 5y average). Total commercial petroleum inventories increased by 9.3 MMbbl | Jul 11 | EIA Weekly Report
Morgan Stanley expects OECD oil inventories to rise by no more than 165 million barrels over the next 12 months, keeping its Brent crude forecast at $65. The firm said the pace of accumulation is easing, with Asian demand steady and fewer strategic reserves being filled. This contrasts with concerns over mounting global inventories after OPEC+ production increases, though most of the build is outside OECD countries. Goldman Sachs raised its Brent outlook to $66 for H2 2025 but warned of a possible surplus in 2026. With stockpile growth slowing and Brent hovering below $70, analysts across major institutions appear aligned: near-term conditions are stable, but volatility risks remain heading into winter | Jul 16 | OilPrice
EU states have approved a fresh sanctions package on Russia over its war against Ukraine, including a revised oil price cap and new banking restrictions. The package will see about 20 more Russian banks cut off from the international payments system SWIFT and face a full transaction ban, as well as restrictions imposed on Russian petroleum refined in third countries. Kaja Kallas says the EU is "cutting the Kremlin's war budget further, going after 105 more shadow fleet ships, their enablers, and limiting Russian banks' access to funding" with the new sanctions package | Jul 18 | Bloomberg
Multiple oil fields in the Kurdistan region in northern Iraq were attacked by drones on Wednesday, adding to a spate of hits on energy installations in the area this week. Majority of oil companies in the region suspended production after the attacks, resulting in the loss of nearly 200,000 barrels of oil production, according to an official. The Kurdistan region hasn’t been shipping any crude to global markets since an export pipeline to Turkey’s Mediterranean coast was shut over two years ago following a payments dispute | Jul 17 | Bloomberg
Iraq approved a plan for its semi-autonomous Kurdish region to transfer oil to Baghdad, a key step toward resuming exports that have been halted for more than two years. The Kurdistan Regional Government will supply Iraq’s state oil marketer SOMO at least 230,000 barrels a day for export, and Baghdad will release funds for salaries of Kurdistan government employees. Myles B. Caggins III, spokesman for the Association of the Petroleum Industry of Kurdistan, said the Iraq-Kurdistan agreement is “an important milestone toward the resumption of oil exports through the Iraq-Turkey pipeline” | Jul 17 | Bloomberg
China's GDP expanded 5.2% in April-June from a year earlier, exceeding expectations. Analysts at Morgan Stanley expect GDP growth to slip below 4.5% in the second half of the year due to "payback of front-loading, weaker global trade amid renewed tariff escalation, and continued deflation loop." Michelle Lam, Greater China economist at Societe Generale SA, said "it's a picture of strong supply but weak domestic demand, and export resilience is not going to last" and described the data as "not a good set of data despite the GDP beat" | Jul 14 | Bloomberg
Oil tankers are set to carry diesel on a rare voyage from East Asia to Europe, which is grappling with a shortage of the fuel. At least two big ships were booked to load diesel in July from ports in China, South Korea and Singapore, for transport to western Europe, according to sources. Both charters aren’t fully concluded, however, and are subject to change, they added. Cargoes of diesel - the global economy’s workhorse fuel - don’t often make such long journeys, with expensive freight among several factors deterring traders under normal circumstances. But both Europe and the US are seeing a summer supply squeeze, pushing the cost of diesel relative to crude in both regions well above seasonal norms | Jul 17 | Bloomberg
Saudi Arabia's seaborne oil flows remain at elevated rates, with total flows to destinations outside the kingdom averaging 6.43 mbpd in the first half of July. The country's oil supply underpins global energy stability, giving it unmatched market influence on prices among producer nations, according to Bloomberg. Saudi Arabia told OPEC that it pumped 9.752 mbpd last month, a move that it explained as being a response to regional tensions, according to a post on X | Jul 17 | Bloomberg
The EU adopted a new law on Friday to extend gas storage regulations through 2027 and bolster energy security. EU countries must reach 90% gas storage filling by 1 December each year, with up to 10% flexibility for "difficult conditions" and an extra 5% if there are "persistent unfavourable market conditions." Proposed in April, the regulation aims to mitigate vulnerability to price fluctuations and supply interruptions. The original regulation was due to expire this December but has been extended due to ongoing war and tight gas markets | Jul 18 | Upstream
Looking ahead
OPEC Monthly Oil Market Report – July 2025 | The global oil demand growth forecast for 2025 and 2026 remain at 1.3 mb/d, y-o-y, unchanged from last month’s assessment. Some minor adjustments were made to 2025, mainly due to actual data for 1Q25 and 2Q25. In the OECD, oil demand is forecast to grow by about 0.1 mb/d in 2025 and 2026, while non-OECD demand is forecast to grow by about 1.2 mb/d in 2025 and 2026. Non-DoC liquids production is forecast to grow by about 0.8 mb/d, y-o-y, in 2025, unchanged from last month’s assessment. The main growth drivers are expected to be the US, Brazil, Canada, and Argentina. The non-DoC liquids production growth forecast for 2026 is also unchanged at 0.7 mb/d, with the US, Brazil, Canada, and Argentina as the main growth drivers. Meanwhile, natural gas liquids (NGLs) and non-conventional liquids from countries participating in the DoC are forecast to grow by 0.1 mb/d, y-o-y, in 2025, averaging 8.6 mb/d, followed by a similar increase of about 0.1 mb/d, y-o-y, in 2026, to average 8.8 mb/d. Crude oil production by countries participating in the DoC increased by 349 tb/d in June, m-o-m, to average about 41.56 mb/d, according to available secondary sources | Jul 15 | OPEC
Losing US EV Tax Credits pushes adoption curve back by 2 years | The Trump administration’s plan to scrap federal incentives for electric vehicles will be a major speed bump for battery-powered transportation in the US, but not a brick wall, according to forecasts. Republicans in the US House sent a bill to President Donald Trump’s desk that kills tax credits of up to $7,500 for EV customers that were part of the 2022 Inflation Reduction Act. The White House has said former President Joe Biden’s initiative “promised much but delivered nothing.” However, the tax credits helped fuel an EV market far more robust and affordable than drivers enjoyed before the rebates kicked in two and a half years ago. Repealing them, along with a flurry of other anti-EV policies put in place or being pursued by the Trump administration, will put a serious dent in sales. US adoption is set to trail the global average through 2040 and will knock the nation out of the top three EV markets, according to a recent BloombergNEF report. Last year’s version of the report had the country boasting higher-than-average sales starting in 2029. Still, Elaine Buckberg, a former General Motors economist now at Harvard University’s Salata Institute for Climate and Sustainability, estimates that even with federal tax cuts disappearing, some 37% of new cars bought in 2030 will be electric. That’s down from a forecast of 48% if the current incentives remained. The factors propping up some of the demand are fairly straightforward: Electric cars are far better and cheaper than they used to be, and there are many more models to choose from. “In the most likely scenario, you end up about two years behind on adoption,” Buckberg said. ”I think [EVs] will be more resilient than people are thinking.” The average price US drivers pay for an EV has ticked slightly lower in the IRA era, from $64,700 in January 2023 to $59,900 in April, a 7.4% decline without adjusting for inflation, according to Edmunds.com. However, the range of options has widened dramatically. Stephanie Valdez Streaty, a director at Cox Automotive, said carmakers and dealers are offering discounts that are often as generous or more so than government incentives. Dealer incentives on a Nissan Leaf, she said, mean “you can get that vehicle for less than $20,000” in some cases. BNEF expects US EVs will be as cheap or cheaper than gas-powered iterations by roughly 2028 (Goldman Sachs estimates that rubicon could be crossed even sooner). Outside the US, however, EVs remain on a tear thanks to a drop in battery prices and a wave of low-price models rolling out of Chinese factories. BNEF expects one in four new cars sold this year — some 22 million cars and trucks — to come with a plug, a 25% increase over 2024. Two-thirds of those sales will be in China | Jul 3 | Bloomberg
