Vincent Wu
Research Associate, Flux
Brent Weaker at $96.50/bbl
Brent near $98 then $96; Russia output falls; fragile Israel-Lebanon ceasefire; China Iran imports down; BP North Sea deal fails.
Published: June 4, 2026
Written by:
Vincent Wu
4 page report
Aug'26 Brent reached $98.98/bbl at 10.55 BST before softening to $96.50/bbl at 11.35 BST (time of writing).
Russia has acknowledged for the first time that its oil production has fallen this year, with Deputy Prime Minister Alexander Novak attributing the decline to unplanned refinery maintenance. The drop comes as Ukraine has intensified attacks on Russian energy infrastructure, though Russia says production will recover once refineries return to normal operations. Israel and Lebanon have agreed to renew a fragile US-brokered ceasefire, creating security zones in southern Lebanon where only the Lebanese army can operate and Hezbollah fighters are barred. However, despite the deal, both sides continued exchanging attacks, and Hezbollah has not yet formally accepted the agreement. Further talks are planned for 22 June to seek a broader peace deal. China's imports of Iranian crude oil fell to a 16-month low in May, while refiners in Shandong cut production amid poor profit margins. As a result, Iranian crude shifted from a premium to a discount against Brent. BP reportedly held advanced talks to sell its remaining North Sea oil assets to Ithaca Energy for around £2 billion, but the deal fell through in recent weeks. The potential sale is part of BP’s wider restructuring and plan to raise $20 billion through asset sales by 2027. Although BP has operated in the North Sea for 60 years, the region now accounts for only about 5% of its global oil production. The company is also reviewing other assets, including petrol station networks and renewable energy businesses, as it seeks to reduce debt and improve performance. Finally, the Aug/Sep’26 and Aug/Feb’27 Brent futures spreads are at $2.61/bbl and $11.66/bbl, respectively.
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