Oil Prices Dip as US-Iran Tensions Ease; Supply Glut Concerns Linger

Crude oil prices retreated from early gains amid hopes of limited US-Iran hostilities, with August WTI crude (CLQ26) falling $1.32 (-1.80%) and August RBOB gasoline (RBQ26) declining $0.0332 (-1.07%). Despite initial spikes following US strikes on 90 Iranian targets in the Strait of Hormuz, prices reversed after Washington refrained from targeting Iran’s energy infrastructure and President Trump signaled no desire for full-scale war.

Recovery in Persian Gulf Flows Sparks Supply Glut Fears

■Saudi Arabia’s crude exports rebounded to 6.3 million bpd (90% of pre-war levels), easing supply concerns.

■UAE boosted shipments by 30% in June, reaching 3.9 million bpd, restoring pre-war export volumes.

■Russia’s four-week average crude exports hit 4.13 million bpd through June 28, the highest since its 2022 invasion of Ukraine, driven by reduced refining capacity due to Ukrainian attacks.

■Ukrainian strikes on Russian fuel facilities exceeded 50 this year, intensifying fuel rationing across 90% of Russian regions and triggering export bans on gasoline, jet fuel, and diesel.

Captain Riza Deniz’s Analysis: The interplay between geopolitical risks and energy supply chains could ripple into Baltic Dry Index movements, particularly if Suez or Panama Canal disruptions emerge. With Russia’s refining output slumping to historic lows (4.32 million bpd in early June), the window for absorbing supply shocks narrows. Persistent volatility in energy commodities signals mounting inflationary and logistical pressures on global trade flows.