Jul 11, 2025 (MarketLine via COMTEX) --
There was an overall increase in crude oil prices during the week due to signs of tight crude supplies in global markets. This was due to reports that the OPEC+ group, which accounts for a major chunk of the global oil output, was struggling to meet its elevated production targets in recent months. The supply risks were aggravated further after the US approved newer sanctions on intermediaries involved in exports of Iranian crude oil. Additionally, the US crude oil production was forecasted to dip slightly by next year, giving additional fillip to oil prices. However, the price rise was contained during the week to some extent after the OPEC+ decided to increase its collective oil output target for August 2025. Besides, the upside to oil prices was also limited by worries over proposed high US import tariffs on goods from at least 14 countries, potentially hampering trade and weigh down global energy demand.
Some key factors that led to changes in crude oil prices this week are as follows:
Oil prices rose on Monday, supported by prospects of a likely dip in crude supplies from Iran after the US imposed additional sanctions on its exports. The new sanctions were specific to a group of entities working to mask origins of Iranian oil by rebadging it as from Iraq, thus bypassing the sanctions on its exports. Prices were also buoyed by reports of faltering crude oil supply from the OPEC+ group. Estimates of crude loadings and trade data among OPEC+ members indicated that, except Saudi Arabia, most other producers in the group had missed their production targets in recent months. Nevertheless, the group announced a larger-than-anticipated hike in its production target for August 2025, which somewhat restricted the price gains arising from supply concerns. The group plans to raise its collective output for next month by 548,000 barrels per day (bpd), which is higher than earlier expectations of 411,000 bpd.Oil prices rose further on Tuesday and then remained largely firm on Wednesday, supported by renewed risks to oil and gas shipping along the Red Sea from the Houthis of Yemen. In the past few days, two cargo vessels came under attack and sank in the region, with some crew members fatally wounded while a few others reportedly missing. These incidents put maritime trade from Asia to Europe in jeopardy and lifted oil prices. Prices also received support from faltering outlook for US crude oil production. The US Energy Information Administration (EIA) estimated that the country’s oil production would dip from 13.5 million bpd in Q2 2025 to around 13.3 million bpd by Q4 2026 due to falling margins. However, the upside to prices was somewhat restrained by a large weekly build in the US crude stockpiles. According to the EIA, crude inventory in the country surged by 7.1 million barrels for the week ending on July 4, 2025. The rise in oil prices was also limited due to reports that the US was preparing to impose hefty tariffs on 14 of its trading partners, including Japan and South Korea, amid slow progress in finalizing trade deals with them. Oil prices fell on Thursday, weighed down by concerns over a potential disruption in global trade from US tariffs and the cascading impact it would have on global energy consumption. The US released letters detailing the likely tariff rates on some of its trading partners, including to economically weaker countries, such as Bangladesh, Sri Lanka, and Iraq. This was the second lot of letters sent after the US had already notified partners like the European Union, Japan and South Korea on their likely tariffs amid delays in finalizing trade deals. Prices were also weighed down by reports from within the OPEC+ group indicating that it would announce another large output hike of 548,000 bpd for September 2025. UAE’s Energy Minister indirectly backed these reports by pointing towards the lack of noticeable inventory build in global markets, indicating more room to increase crude supply.Oil prices rose again on Friday, supported by prospects of reduced crude oil supply from Russia due to western sanctions. The US revealed that it was preparing to levy new, more stringent sanctions on Russia after its talks over a ceasefire in Ukraine were reaching a stalemate while the conflict raged on. Moreover, Russia stated that it would reduce its crude oil output in August and September 2025 after producing beyond its OPEC+ quotas in recent months, lending additional support to prices.
http://www.datamonitor.com
Republication or redistribution, including by framing or similar means,
is expressly prohibited without prior written consent. Datamonitor shall
not be liable for errors or delays in the content, or for any actions
taken in reliance thereon
COMTEX_467431473/2227/2025-07-18T18:07:07
Copyright (C) 2025 Datamonitor. All rights reserved
