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European Window: Brent Drops Under $69/bbl

The Sep’25 Brent futures contract fell from $69.80/bbl at 12:25 BST to $68.60/bbl at 16:55 BST, increasing slightly to $68.95/bbl at 17:10 BST (time o

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The Sep’25 Brent futures contract fell from $69.80/bbl at 12:25 BST to $68.60/bbl at 16:55 BST, increasing slightly to $68.95/bbl at 17:10 BST (time of writing). Reuters reported that the European Commission plans to propose a floating Russian oil price cap this week as part of its 18th sanctions package, aiming to overcome opposition from some EU states. The current G7 cap of $60/bbl, set in December 2022 to limit Russia’s war financing, has become ineffective due to falling global oil prices, prompting the EU to draft a mechanism starting around $45/bbl that adjusts with market prices. OPEC’s 2025 World Oil Outlook projects global oil demand rising by over 19 mb/d by 2050, reaching nearly 123 mb/d, and requiring up to 19.5 mb/d of new refining capacity. India, Other Asia, the Middle East, and Africa will drive growth, adding 22.4 mb/d combined, with India alone contributing 8.2 mb/d, while Chinese growth slows and developed economies see declining demand. Emerging markets, policy shifts, and stronger economic prospects will support medium- and long-term demand. The UAE reaffirmed its 5 mb/d production capacity target by 2027 but signalled it could increase to 6 mb/d if markets demand, potentially making it the world’s fourth-largest producer. Energy Minister Suhail al-Mazrouei stressed this is not an official target, and the ministry confirmed the current goal remains unchanged. OPEC+ granted the UAE a higher quota in 2024. It is set to rise by another 300,000 bpd through September 2025, as part of a 2.5 mb/d group-wide output increase, while 3.65 mb/d of cuts remain until end-2026 amid ongoing quota disputes within the group. US pipeline safety enforcement actions fell to a record low at the start of Donald Trump’s new term, as his administration prioritises deregulation. The Pipeline and Hazardous Materials Safety Administration opened just 40 cases between January 20 and June, the lowest for any presidential term in two decades and 68% lower than during Trump’s first months in office in 2017. Finally, the front-month Sep/Oct and the 6-month Sep/Mar’26 spreads are at $1.13/bbl and $3.04/bbl.

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Our team of skilled analysts, by utilising the depth and breadth of Onyx's proprietary data, position ourselves at the cutting edge of market analysis. This unique vantage point grants us an unparalleled perspective in the market, enabling us to identify emerging trends and lucrative opportunities.