U.S. Oil: The U.S. Interior Department proposed rule changes on Monday to make it easier for energy companies to combine oil and gas output from multiple leases using the same well pad, potentially saving the industry up to $1.8 billion annually. The proposal would primarily impact onshore drilling in the western U.S. by easing restrictions on commingling, which is currently limited to leases with identical ownership, royalty rates, and revenue distribution. The change follows a directive in President Trump’s tax cut law requiring approval of commingling applications. Interior officials argue the existing rules are outdated and create unnecessary barriers in regions with complex mineral ownership. The proposed updates aim to improve operational efficiency and ensure accurate royalty payments to both the federal government and Native American tribes. The Western Energy Alliance has strongly supported the move, calling it a key way to boost onshore production that has been delayed by regulatory hurdles. This aligns with the Trump administration’s broader energy dominance agenda, which seeks to cut fossil fuel regulations.

Tariffs: President Donald Trump announced that the U.S. will impose 25% tariffs on imports from Japan and South Korea starting August 1, with additional tariffs on Malaysia, Kazakhstan, South Africa, Laos, and Myanmar. Trump warned that any retaliatory tariff increases from other countries would be matched and added to the U.S. tariffs. While the EU won’t receive a tariff letter for now, Trump has threatened a 17% tariff on EU food and agriculture exports if talks fail. Only Britain and Vietnam have reached agreements so far, as countries scramble to negotiate deals before the new tariffs take effect. Financial markets reacted negatively, with U.S. stocks falling and Japanese automaker shares hit hard. Trump also threatened BRICS nations with a 10% tariff if they pursue "anti-American" policies, intensifying global trade tensions ahead of the July 9 negotiation deadline.

Executive Order: President Donald Trump issued an executive order directing federal agencies to enforce stricter provisions in the One Big Beautiful Bill Act that limit tax credits for wind and solar energy. He criticized renewable energy as unreliable, costly, environmentally harmful, and dependent on foreign supply chains. The Treasury Department is tasked with enforcing the phaseout of these tax credits, while the Interior Department must revise policies that prioritize renewables over other energy sources. Both departments must report back to the White House within 45 days on their actions. The new law ends renewable energy tax credits after 2026 for projects that haven't started construction, cutting short incentives that were previously available through 2032.

Market Overview: Oil prices dipped on Tuesday after nearly a 2% gain in the previous session, as investors weighed rising OPEC+ output and uncertainty around U.S. tariffs. U.S. West Texas Intermediate (WTI) crude fell by 25 cents, or about 0.4%, to $67.68. President Trump’s announcement of sharply higher tariffs starting August 1, though later described as not firm added to market concerns over global economic growth and oil demand. OPEC+ agreed to increase production by 548,000 barrels per day in August, reversing much of its voluntary cuts made since 2023. Despite near-term bullish sentiment due to peak U.S. summer demand, analysts warn that rising OPEC+ exports could weigh on prices once seasonal demand fades.

Following OPEC+'s decision to raise crude oil production by 548,000 barrels per day in August, key questions remain about who will buy the extra oil and whether the group will actually export the full increase. The boost, coming from eight major producers, nearly completes the unwinding of the 2.2 million bpd involuntary cuts made last year. While OPEC+ cites a stable global economic outlook and healthy market fundamentals, real-world data—such as weak Chinese import growth—suggests demand may not be as strong. China’s crude imports only rose 0.3% in the first five months of 2025, although a spike in June is expected due to lower oil prices when those cargoes were purchased. Asian oil imports hit a 17-month high in June, lifting the region’s first-half average to align with OPEC’s projected demand growth. However, whether this momentum continues depends on oil prices, as importers like China and India tend to reduce purchases when prices rise. A mid-June price surge from geopolitical tensions may already be enough to slow China’s imports in August and September. Ultimately, whether prices soften and support future buying will hinge on OPEC+—particularly Saudi Arabia—following through on its production quotas and increasing actual exports.

Oil prices rose to a two-week high on Tuesday, with WTI closing at $68.33, driven by a lower U.S. production outlook, renewed Houthi attacks in the Red Sea, and technical short covering. The EIA forecasted reduced U.S. oil output for 2025 due to slowing activity amid weaker prices, which helped support the rally. Additional momentum came from surprise news that President Trump plans to impose a 50% tariff on copper, boosting commodity prices broadly, including oil. Escalating violence in the Red Sea, where a deadly attack on a commercial vessel occurred, has disrupted shipping routes and increased energy transportation costs. Rising U.S. gasoline and diesel prices have pushed refining profit margins to multi-month highs, offering further support to crude prices. Despite bearish headlines such as potential OPEC+ production increases and trade tensions, oil has shown resilience, with analysts noting strength in the face of typically negative market drivers.