Oil tanker in open sea by StockStudio via Shutterstock
August WTI crude oil (CLQ26) today is down -0.91 (-1.33%), and August RBOB gasoline (RBQ26) is down -0.0758 (-2.57%).
Crude oil and gasoline prices extended their three-week-long slide today, with crude falling to a new 4.25-month low. Crude prices are falling today as an increase in Middle Eastern oil supplies eases global oil supply concerns. Saudi Arabian and United Arab Emirates (UAE) crude shipments have nearly fully recovered to pre-war levels.
Crude prices deepened their slide today as the recovery in flows through the Persian Gulf accelerated, sparking concerns of a supply glut. According to data compiled by Bloomberg, Saudi Arabian crude exports have risen to 6.3 million bpd, or 90% of pre-war levels, in the six days through Wednesday. Also, the UAE ramped up shipments of crude oil and condensates by 30% in June to more than 3.9 million bpd, restoring its oil exports to pre-war levels.
Crude prices tumbled on Wednesday after a senior US administration official said US negotiators held positive discussions in Qatar and progress is being made on technical talks with Iran. Also, the Wall Street Journal reported that President Trump had decided against resuming a broad military campaign against Iran and told his staff that he didn’t mind if the negotiations extended beyond the August 18 deadline.
Stronger Russian crude exports are also adding to global oil supplies and undercutting prices. Data compiled by Bloomberg show the four-week average of Russian crude exports rose to 4.13 million bpd through June 28, the highest since Russia invaded Ukraine in 2022. Russia may be boosting its crude exports as the country’s refining capacity has plunged due to damage at its refining facilities from Ukraine drone and missile attacks.
Crude oil prices are also under pressure after Iraq warned last Thursday that it might quit the Organization of the Petroleum Exporting Countries (OPEC) if it doesn’t get a higher output quota.
The International Energy Agency (IEA) warned on June 17 that the Iran war’s impact on global oil demand will be much deeper than previously anticipated, saying world oil consumption will decline by -1.1 million bpd this year, a larger drop than a previous estimate of -420,000 bpd.
The outlook for higher US crude output is negative for oil prices. The Department of Energy (DOE) on June 9 raised its US 2026 crude production estimate to 13.72 million bpd from a May estimate of 13.65 million bpd.
Crude prices have support from the continued Ukrainian drone attacks on Russian oil infrastructure. According to EA Analytics, Russian crude-processing rates averaged 4.32 million bpd in the first 10 days of June, the lowest in 20 years, amid damage to Russian energy infrastructure caused by drone and missile attacks from Ukraine. According to Bloomberg, Ukrainian forces have attacked Russian fuel-producing facilities more than 50 times this year, compared with 82 for all of 2025. As of the end of June, around 90% of Russian regions have imposed some form of fuel rationing or reported supply issues, as refining capacity has plunged following damage to facilities.
As a bearish factor for crude, OPEC delegates said on May 14 that the cartel aims to continue a series of oil quota increases over the next few months, completing the return of halted oil production by the end of September. The group already formally agreed to restore about two-thirds of the 1.65 million bpd supply cutback it made back in 2023 and said it plans to raise output targets further and to revive the final portion in three more monthly stages. On May 3, OPEC+ said it will boost its crude output by 188,000 bpd in June after raising production by 206,000 bpd in May, although any production hike now seems unlikely given that Middle East producers are being forced to cut production due to the Middle East war. OPEC’s May crude production fell by -3.36 million bpd to a 40-year low of 16.33 million bpd.
Vortexa reported on Monday that crude oil stored on tankers that have been stationary for at least 7 days fell -9.4% w/w to 82.24 million bbl in the week ended June 26.
Wednesday’s EIA report showed that (1) US crude oil inventories as of June 26 were -7.0% below the seasonal 5-year average, (2) gasoline inventories were -6.5% below the seasonal 5-year average, and (3) distillate inventories were -7.2% below the 5-year seasonal average. US crude oil production in the week ending June 26 fell -0.1% w/w to 13.81 million bpd, mildly below the record high of 13.862 million bpd posted in the week of November 7.
Baker Hughes reported last Friday that the number of active US oil rigs in the week ended June 26 rose by +7 rigs to a 1-year high of 440 rigs, up from the 4.25-year low of 406 rigs posted in December 2025. However, the number of US oil rigs remains sharply below the 5.5-year high of 627 reported in December 2022.
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
Source: Original Article
