Latest news with #OPEC+
Arabian Post
a day ago
- Business
- Arabian Post
Oil Demand Peaks Early as Global Seasonality Shifts
Global crude consumption is now cresting in the third quarter rather than the fourth, as China and India's surging summer demand upends decades of winter-driven market patterns. The reversal of the traditional seasonality, first observed around 2015, is being amplified in 2025, with implications for supply strategies, prices and refinery operations worldwide. OPEC's July report highlights strong refinery throughput in June, with intake rising by 2.1 million bpd—clear evidence of robust travel-season fuel consumption in the Northern Hemisphere. Concurrently, China's major state refiners ramped up processing to over 80% capacity in late June, the highest level in five years, aiming to stockpile low inventories before peak third-quarter demand. Asia's crude imports also surged, reaching around 28.7 million bpd in June—led by China and India—though analysts caution that much of this is stockpiling due to previously low prices rather than immediate consumption. Meanwhile, OPEC+ is preparing to increase production by roughly 548,000 bpd in August to capture this heat-driven demand surge. Still, markets remain cautious as economic headwinds in OECD nations and China's decelerating demand provide counterbalance. China's slower industrial growth, boosted NEV uptake and cooling property sector have all contributed to flattening its fuel demand growth. ADVERTISEMENT India, by contrast, is bucking the global trend. OPEC forecasts India's oil consumption to increase by 3.4 percent in 2025—more than double China's expected growth. The IEA also projects India to lead global demand growth through 2030, driven primarily by diesel and aviation fuels amid industrial expansion. IEA data confirms a structural shift in seasonality, with winter-fuel usage declining sharply in developed nations and seasonal peaks now centred on summer transport and industrial fuel cycles. That makes Q3 the new high-water mark for global oil demand. EIA forecasts, however, provide a nuanced counterpoint: while Q3 demand is heightened, they predict average Brent prices easing from about $69/barrel in 2025 toward $58 in 2026, reflecting broader supply growth and weaker Q4 demand. U. S. shale output, which peaked at 13.4 million bpd in the second quarter, is expected to edge lower through 2026. Refiners in Asia, particularly China, remain under pressure due to low product stockpiles. Despite processing rates in late June reaching five‑year highs, inventories of diesel and gasoline remain near six‑year lows—spurring sustained high throughput to meet demand. Prices are responding. Brent crude hovered around $69 a barrel following OPEC's July update, while analysts view the Q3 price uptick as partially technical, lacking support from a clear economic rebound. The EIA's projection of Q4 WTI at $82 suggests that, although demand is migrating earlier in the year, some price pressure is expected to persist into the colder months. The seasonality transition poses strategic conundrums for OPEC+, which must time its output hikes precisely to align with this new demand curve. Should the group misjudge demand timing or overproduce, inventories could swell and prices could retreat. Meanwhile, consumer markets may benefit from lower winter fuel prices, but refiners accustomed to traditional heating demand may struggle with a flatter seasonal cycle. Structural shifts underpinning this phenomenon include rising EV adoption in China and natural gas heating in developed markets, which have diminished heating-oil demand. In contrast, summer travel and logistics-led diesel demand in Asia have risen sharply. According to the IEA, non-OECD countries accounted for nearly all global oil consumption growth in 2025, while OECD demand stagnated or declined. Asia's combined crude import expansion of 620,000 bpd year-on-year also underscores this regional divergence. To summarise developments shaping global oil markets this year, demand now peaks in Q3—a shift driven by evolving consumption patterns and the ascent of Asian fuel use. Policymakers, refiners and oil producers are all recalibrating to these new dynamics. How well they adapt may define market stability as the second half of the year unfolds.
The Star
2 days ago
- Business
- The Star
Uneasy stability in oil markets amid OPEC+ moves, Middle East ceasefire
Oil is going through a period of uneasy calm, but market players are pondering if it's a trend that would last. The higher-than-expected rise in OPEC+ production quotas for August, combined with a ceasefire between Israel and Iran, has provided oil markets some breathing space and introduced a bearish sentiment to prices, but rising expectations of potential additional sanctions on Russia by Washington could soon change the landscape and keep markets on edge. But one thing is becoming increasingly clear – even if geopolitics takes an ugly turn, it may not be able to overshadow the impact on fast-growing global supplies amid relatively slower demand. Amid heightened tensions in the Middle East recently, oil markets experienced a peak in the fear premium when Dated Brent surged past US$80 per barrel. However, in the third quarter of this year, S&P Global Commodity Insights expects Dated Brent to decline to the mid-US$60s per barrel. And by the end of the year, strong oil supply growth relative to demand is expected to push Dated Brent into the US$50s/b. The eight members of the OPEC+ alliance implementing voluntary crude output cuts agreed July 5 to hike their production quotas by 548,000 b/d in August, accelerating their claw back of market share. The group was of the view that members were encouraged by healthy market fundamentals, which was reflected in low oil inventories. The increase is 33% more than the previously agreed monthly increases of 411,000 b/d that the voluntary cutters had agreed in their previous three meetings. And there were expectations that the group would repeat the same for August. The alliance is bringing barrels back to market at a time of high seasonal demand, with the US entering its driving season while Middle East countries burn more oil to meet electricity needs. But despite this, oil markets are heading towards an oversupply scenario in the second half of 2025. Commodity Insights forecasts that the market could witness a surplus of more than 1 million b/d by the end of the year if OPEC+ members fully unwind the voluntary production cuts by October. Global commercial inventories may rise by over 600,000 b/d in August, escalating to an average of 1.7 million b/d from September to December, influenced in part by actual OPEC+ production levels. The sustained increase in OPEC+ output is likely to exert further bearish pressure on oil prices, particularly post-summer. Saudi Arabia's crude exports notably increased by 475,000 b/d to 6.17 million b/d in June, accounting for 90% of the total month-over-month growth among eight OPEC+ nations. This growth stemmed from inventory draws and increased production, with refinery runs and crude burn in the kingdom estimated to have risen by 140,000 b/d and 75,000 b/d month over month, respectively. Ceasefire does not mean end of conflict A ceasefire in the Middle East does not mean the conflict is over. The fear premium in oil prices can reappear overnight, bringing back uncertainties in the oil market. Israel's military success may have raised the possibility that Iran could ease 46 years of hostilities with the US and Israel, but for now, it's too early to jump to that conclusion. A weakened Iran could become more repressive internally and provocative externally. Much will depend on the internal and opaque political dynamics within Iran. But the impact on the oil market could be profound if trade and investment sanctions against Iran are eased or lifted. In addition, oil markets will closely monitor Washington's recent decision to remove Syria's oil ministry, its two refineries, and maritime authority from its sanctions list, as this could pave the way for the war-torn country's return to the international oil trade. US sanctions on Syria were officially lifted by President Donald Trump on June 30, following earlier moves by the EU and the UK to ease economic curbs on the country. Before the onset of the civil war in 2011, Syria pumped around 380,000-400,000 b/d of crude -- enough to meet its domestic consumption and supply some barrels to the international market. However, Syria's oil and gas fields and infrastructure have been badly damaged and neglected. Syria's crude production has plummeted to approximately 90,000 b/d from 442,000 b/d in 2004, severely limiting export potential until production recovers, according to Commodity Insights data. The removal of sanctions could eventually increase Syrian oil supply to global markets, though significant production increases will take time. Syrian crude grades, which are predominantly medium-heavy sour varieties, could eventually compete with similar Mediterranean grades once production and export infrastructure are restored. Threat of secondary sanctions Adding a layer of uncertainty to the market is the latest statement from Trump who said on July 14 that he would impose 100% secondary sanctions on any country that buys Russian exports if Russia does not reach a peace agreement with Ukraine in the next 50 days. The announcement came amid a bipartisan push in the US Senate to pass the Sanctioning Russia Act of 2025. The bill would impose a 500% duty on all goods or services imported into the US from any country that "knowingly sells, supplies, transfers, or purchases oil, uranium, petroleum products, or petrochemical products that originated in the Russian Federation," according to the bill text. To date in 2025, India, China, and Turkey have been the largest purchasers of Russian oil, according to data from S&P Global Commodities at Sea, collectively representing 53% of Russia's total waterborne exports. India has imported an average of 1.69 million b/d of Russian crude and condensates in 2025, while China took an average of 1.09 million b/d and Turkey 377,000 b/d, CAS data showed. Potential 100% US tariffs on China and India would have significant market ramifications and could alter Asian crude oil flows to a large extent. By now, top buyers of Russian crude must have started pondering about their Plan B in the event new US sanctions against Russia come into force. Sambit Mohanty is Asia Energy Analyst at S&P Global Commodity Insights, leading coverage for Platts Oilgram News for the Asia-Pacific region. Sambit is based in Singapore and has more than 25 years of experience as a senior journalist and editor analysing commodities and energy trends in the region. He holds a Master's Degree in Applied Economics.
Yahoo
2 days ago
- Business
- Yahoo
Saudi Arabia's Crude Oil Exports Hit 3-Month High in May
Saudi Arabia's crude oil exports rose to a three-month high in May, the latest data by the Joint Organizations Data Initiative (JODI) showed on Monday, as the Kingdom leads the OPEC+ production increases this summer. Saudi Arabia, the world's top crude oil exporter, saw its shipments rise by 25,000 barrels per day (bpd) from April to 6.19 million in May, according to the JODI data which compiles self-reported figures from the individual countries. The export levels in May reached the highest since February this year, when the shipments exceeded 6.5 million bpd, the data showed. Meanwhile, Saudi crude oil production jumped by 179,000 bpd to reach a 23-month high in May, as the Kingdom and its OPEC+ allies started easing their production cuts in April this year. Saudi Arabia's domestic refinery intake inched by 17,000 bpd in May from the previous month, but total product demand surged by 478,000 bpd to the highest level in 9 months. The demand in May was above the five-year average range, according to the data in JODI. Since April, Saudi Arabia has been consistently increasing its crude oil production, as it leads the OPEC+ group's current policy to unwind 2.2 million bpd in total oil production cuts. Earlier this month, OPEC+ caught the market by surprise by announcing a larger-than-expected output hike of 548,000 bpd for August. Another production boost of 550,000 bpd for September is expected, and this would allow OPEC+ to unwind all the 2.2 million bpd cuts. OPEC+ producers still have 1.6 million bpd in other production cuts spread among the group members and expiring at the end of 2026. OPEC has already announced individual members' production in June, which showed a large gap in estimated and self-reported Saudi oil production. The Saudi output of 9.356 million bpd, per OPEC's numbers based on secondary sources tracking production and supply, was in perfect alignment with the Saudi quota. But in the table with self-reported figures, OPEC put an asterisk – in a very unusual move – next to the Saudi production number of 9.360 million bpd, explaining below that 'Saudi Arabia's supply to the market in June was 9,360 tb/d and production was 9,752 tb/d.' By Michael Kern for More Top Reads From this article on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Iraqi News
2 days ago
- Business
- Iraqi News
Iraq's oil shipments expected to increase as output rises
Baghdad ( – Iraq will increase its shipments of crude oil next month as part of an expanded export program, signaling that the OPEC+ country is increasing its oil output. Sources familiar with the situation said that OPEC's second-largest oil producer plans to increase exports of destination-free Basrah Medium crude to around 18 million barrels next month, according to Bloomberg. According to one source, the planned increase is significantly higher than the levels seen in July and is expected to lead to a slight increase in overall exports. OPEC and its partners are in the midst of a production surge that has so far projected greater oil supplies than it delivers. The entire supply of destination-free crude would be around four million barrels, or between 20 and 30 percent higher than average monthly volumes. OPEC and its partners have raised output in recent months. That decision, which reverses years of supply constraints, comes amid indications of a worldwide supply surplus. Destination-free shipments are often distributed to supply companies and equity shareholders and are in great demand. Shell, TotalEnergies, and China National Petroleum Corporation are all equity producers. A few kinds of Middle Eastern crudes are marketed on a destination-restricted basis, which means they may only be sent to a particular refinery or consumer and cannot be easily traded. The entire initiative includes both destination-free and destination-restricted shipments of Basrah Medium and Basrah Heavy crudes, as well as minor quantities of the Qayara grade. Iraq is one among several OPEC+ members that have previously surpassed their production limitations. If a greater ceiling was permitted, any additional output would make it more difficult for Iraq to fulfill its objective.
Business Recorder
2 days ago
- Business
- Business Recorder
Saudi Arabia crude exports hit three-month high in May
Saudi Arabia's crude oil exports in May rose to their highest in three months, data from the Joint Organizations Data Initiative (JODI) showed on Monday. Crude exports from the world's largest oil exporter rose to 6.191 million barrels per day (bpd) from 6.166 million bpd in April. Saudi's crude output for May was at 9.184 million bpd, up from 9.005 million bpd in April. Saudi refineries' crude throughput was at 2.721 million bpd, up 0.017 million bpd from April's 2.704 million bpd, the data showed, while direct crude burning increased by 112,000 bpd to 489,000 bpd. Saudi Arabia and other members of OPEC provide monthly export figures to JODI, which publishes them on its website. The OPEC+ group comprising OPEC and allies such as Russia, this month agreed to raise production by 548,000 bpd in August, further accelerating output increases at its first meeting since oil prices jumped and then retreated after Israeli and U.S. attacks on Iran. Crude oil steadies Five sources familiar with the discussions said that OPEC+ is likely to approve a further increase for September when it meets on August 3. OPEC+ began to unwind cuts of 2.17 million bpd in April with a boost of 138,000 bpd, followed by further increases in May, June and July despite falling oil prices. Meanwhile, Saudi Arabia's energy ministry said the kingdom had been fully compliant with its voluntary OPEC+ output target, adding that Saudi-marketed crude supply in June was 9.352 million bpd, in line with the agreed quota.
