Global oil markets surged this week after Israel launched targeted strikes on Iran’s nuclear program, reigniting geopolitical tensions and sending Brent crude to $75 per barrel—its biggest single-day jump in three years. While no Iranian oil infrastructure was damaged, fears of retaliation and broader regional escalation have pushed the geopolitical risk premium back into the spotlight.
The oil market’s anxiety stems in part from threats to the Strait of Hormuz, the critical passageway for about 19 million barrels per day—roughly a fifth of global oil consumption. In anticipation of potential Iranian retaliation, Israeli gas fields have paused production, and shipping through the Red Sea is once again under scrutiny.
This geopolitical uncertainty comes at a time when OPEC+ continues to scale back production cuts and global demand is under pressure from Donald Trump’s revived tariff policies, especially with major economies showing signs of slower growth.
In other major developments:
Egypt Signs Massive LNG Supply Deal
Egypt has secured contracts for up to 160 LNG cargoes with global traders including Saudi Aramco, Trafigura, Vitol, and Shell, locking in supply for the rest of 2025 and into 2026. These deals reportedly carry premiums of $0.70–$0.75/mmBtu over TTF.
Canada Plans New Oil Pipeline
Alberta Premier Danielle Smith is proposing a new 1 million b/d crude oil pipeline to Prince Rupert, British Columbia. The Canadian government is currently evaluating private sector interest in the project.
Guyana’s Next Oil Boom
ExxonMobil plans to load its first cargo from Guyana’s fourth production unit in August or September. The new crude grade, called Golden Arrowhead, is even lighter than other Guyanese grades.
India Sets Crude Import Record
India imported over 2.2 million b/d of Russian crude in early June, setting a new record and fulfilling 46% of its total oil needs. Russian oil remains below the G7 price cap, making it an attractive option.
ADNOC Eyes Global Acquisitions
UAE’s ADNOC is reportedly exploring a takeover of Australian oil firm Santos and is also assessing potential purchases of BP’s natural gas assets.
Algeria Doubles Down on Refining
Algeria has earmarked $7 billion for refining projects over the next five years, signaling a pivot from just producing to processing petroleum domestically.
From supply chain bottlenecks to shifting geopolitical alliances, the global energy market is bracing for further volatility.
