The Aug’25 Brent futures contract gapped up at open in a $1.47/bbl move to $64.12/bbl. Prices rallied all morning to $65.09/bbl at 11:50 BST (time of writing). The move comes as OPEC+ confirmed it would raise output by $411kb/d for July, despite rumours on 30 May of larger output hike. In the news, Goldman Sachs expects OPEC+ to implement one final 411kb/d production hike in August, citing tight oil fundamentals, strong global activity, and seasonal demand. SOCAR, Azerbaijan’s state energy company, is set to sign new oil and gas exploration deals, including with ExxonMobil and BP, sources told Reuters. While details are scarce, the move supports Azerbaijan’s goal to boost gas exports by 8 bcm by 2030. In 2024, Azerbaijan exported 25 bcm of natural gas. The country holds 7 billion barrels of proven oil reserves and 1.7 trillion cubic meters of gas. In other news, Russian and Ukrainian officials are meeting in Istanbul for their second direct peace talks since 2022, amid low expectations for a breakthrough. The talks follow Ukraine’s recent strike on Russian nuclear-capable bombers and record-high drone attacks by Russia. Ukraine demands no territorial concessions and reparations, while Russia insists on Ukrainian troop withdrawal from occupied regions and abandoning NATO ambitions. Iran has stated it is still waiting for clarity on the US stance regarding sanctions relief, a key issue in ongoing nuclear negotiations. Foreign Ministry spokesperson Esmaeil Baghaei emphasized that any deal must ensure sanctions are lifted transparently to avoid repeating past failures. Despite limited progress after five rounds of talks in Rome, major disagreements remain unresolved. Finally, the front-month Aug/Sep ad 6-month Aug/Feb spreads are at $0.82/bbl and $1.61/bbl respectively.
