Crude Oil Market: Oil prices remained mostly stable on Tuesday as President Trump's 50 day deadline for Russia to end the Ukraine war eased immediate fears of sanctions that could tighten global supply. Market concerns about imminent sanctions faded, though analysts warned that if President Trump follows through, the oil market outlook could shift significantly, especially for major Russian crude buyers like China, India, and Turkey. Meanwhile, President Trump's proposed tariffs on EU and Mexican imports from August 1 raised fears of slower global growth and reduced fuel demand. Despite weak Chinese economic data impacting commodity sentiment, OPEC expects oil demand to remain strong through Q3, helping maintain market balance.

Drone Attack: A drone attack on Tuesday halted production at the Sarsang oilfield in Iraq's Kurdistan region, operated by U.S. based HKN Energy, just hours before the company signed a preliminary deal to develop the Himreen field. The explosion, confirmed as a drone strike by Kurdish authorities, caused no casualties but prompted a shutdown for safety and fire control. Initial investigations suggest the drone originated from areas controlled by Iran backed militias, though no group has claimed responsibility. The U.S. condemned the attacks, calling them a threat to Iraq’s sovereignty and foreign investment prospects. This incident followed a similar drone strike on Monday at the Khurmala oilfield near Erbil, which damaged water infrastructure.

OPEC+: OPEC+ maintained its 2025 and 2026 global oil demand growth forecasts, citing stronger than expected economic performance in countries like India, China, and Brazil, and ongoing recoveries in the U.S. and Eurozone. The group said second half 2025 economic growth may exceed expectations, supporting increased refinery activity amid strong seasonal demand. OPEC+ plans to boost output by 548,000 barrels per day in August, aiming to regain market share as global demand rises, despite lingering trade conflicts and President Trump’s 50 day Russia deadline. Refinery crude intake jumped by 2.1 million barrels per day in June, with OPEC expecting high throughputs to continue due to strong demand for gasoline and jet fuel. While OPEC+ forecasts robust demand, the IEA has trimmed its outlook but acknowledged the market could still be tighter than it appears. OPEC+ output rose by 349,000 barrels per day in June to 41.56 million barrels per day, slightly below quota targets, with Kazakhstan’s production climbing to 1.847 million barrels per day despite compliance pressures.

Market Overview: Crude oil markets remain volatile amid shifting geopolitical dynamics and seasonal demand pressures. U.S. inventories have seen consistent draws, especially in gasoline and distillates, highlighting robust consumption during the summer driving season. Despite a recent ceasefire between Israel and Iran, traders remain wary of renewed Middle East tensions that could threaten key supply routes like the Strait of Hormuz. Meanwhile, OPEC+ continues to signal production discipline, supporting a tighter global supply outlook through year end. Prices have found support though macroeconomic uncertainty and interest rate expectations still temper bullish momentum. Energy futures are slightly moving this morning with crude is bearish by $0.22 to $66.76, HO is bullish $0.0209 to $2.4107, and RBOB is bullish $0.0143 to $2.1797.

Between 2006 and 2024, U.S. imports of crude oil and petroleum products fell by 39%,dropping from 14 million barrels per day to 8 million barrels per day. This decline was concentrated in the Gulf Coast and East Coast regions, which have significant domestic production and consumption. In contrast, imports rose in the Midwest, Mountain, and West Coast regions. Over the same period, imports from OPEC countries fell 77%, while imports from Canada nearly doubled, surpassing OPEC volumes in 2014 and every year since. With the recent expansion of the Trans Mountain pipeline, Canadian crude imports hit record highs in2024, now supplying nearly all crude used by Midwest and Mountain region refineries.

Global crude oil prices eased after U.S. President Trump set a 50 day deadline for Russia to cease hostilities in Ukraine, a move that eased fears of broad sanctions and potential supply disruptions. Meanwhile, OPEC+ announced plans to boost output by over half a million barrels per day in August, which combined with rising Saudi exports and signs of weakening demand in Asia, is testing the resilience of oil prices. Geopolitical tensions persist in the Middle East, with the lingering threat of Strait of Hormuz disruptions still a wildcard capable of sending oil prices sharply higher. At the end of today, crude was slightly bearish to $66.52, while both HO and RBOB finish a bit bullish.