The Sep’25 Brent futures strengthened this morning, from a daily low of $69.41/bbl at 04.35 BST to $70.40/bbl at 10.45 BST, softening to $70.12/bbl at 11.25 BST (time of writing). The EU approved its 18th sanctions package on Russia and Belarus. This cut the Russian oil price cap to $47.60/bbl and does not have G7 backing yet. Slovakia dropped its veto after winning safeguards on gas supplies, price support, and help with its Gazprom contracts, despite the EU’s plan to phase out Russian energy imports by 2028 under the “RePowerEU” strategy. Drone strikes have severely disrupted oil production in Iraq’s semi-autonomous Kurdish region since 14 Jul, targeting multiple fields operated by Western companies, including Norway’s DNO ASA and US-based HKN Energy and Hunt Oil. The attacks damaged facilities and forced several sites offline, reducing output to between 140-150kb/d, down from the usual 280kb/d. Reuters, citing energy officials, reported that Iran-backed militias are believed to be behind the strikes, though no group has claimed responsibility. Oil demand in JODI-reporting countries rose by 1.68mb/d y/y in April, according to JODI. The increase was mainly driven by higher crude demand from the United States, Nigeria, Italy, Canada, and Turkey. Chevron will proceed with its $53 billion acquisition of Hess after winning a closely watched arbitration against Exxon Mobil and CNOOC over Hess’s 30% stake in Guyana’s Stabroek Block, securing access to one of the world’s largest oil discoveries. The victory, which sent Hess shares up 7.4% and Chevron up 3.6%. At the time of writing, the Sep/Oct’25 and Sep/Mar’26 Brent futures spreads stand at $1.02/bbl and $3.06/bbl, respectively.
