U.S. crude oil futures settle at $64.60/bbl, up 45 cents, 0.70 pct

U.S. crude oil futures settle at $64.60/bbl, up 45 cents, 0.70 pct

U.S. crude oil futures settled at $64.60 per barrel, up 45 cents, or 0.70 percent, on July 2, 2025. The increase comes amidst heightened geopolitical tensions and supply concerns, particularly in China and India.

The surge in crude oil futures is largely driven by recent U.S. sanctions on oil storage terminals in China. On August 21, the U.S. State Department imposed sanctions on Yangshan Shengang International Petroleum Storage and Transportation in Zhejiang province and Qingdao Port Haiye Dongjiakou Oil Products in Shandong province for handling imports of Iranian oil [1]. This move has led to increased volatility in Chinese crude and fuel oil futures markets, with analysts predicting potential deliverability issues [1].

The Shanghai Futures Exchange (SHFE) fuel oil contract for October delivery (SFUV5) saw significant price movements following the sanctions announcement. The contract rose for three consecutive trading sessions, gaining 4% to 2,878 yuan ($402.35) per metric ton [1]. The increased trading volume, with a total of 842,000 October contracts traded on Monday, August 23, reflects investor concerns about the impact of the sanctions on physical deliveries [1].

Similarly, the most actively traded crude contract on the INE, for October delivery (ISCV5), climbed by 3.3% to 497.70 yuan ($69.58) per ton over four trading sessions [1]. Market participants are concerned about taking deliveries from Yangshan storage holding oil tied to INE contracts, leading to a drop in prices on Wednesday, August 24, by 2.3% [1].

Adding to the geopolitical uncertainty, CLSA has warned that crude oil prices could rise to $100 a barrel if India halts imports from Russia. India currently imports 36% of its crude oil from Russia, and a disruption in these imports could strand about 1% of global oil supply [2]. While the economic benefit of discounted Russian crude for India is relatively small, the potential impact on global supply and inflation is significant.

In conclusion, the U.S. crude oil futures market is experiencing increased volatility due to geopolitical tensions and supply concerns. The sanctions on Chinese oil storage terminals and potential disruptions in Indian imports from Russia are driving market dynamics. Investors and financial professionals should closely monitor these developments for further implications on crude oil prices.

References:
[1] https://www.tradingview.com/news/reuters.com,2025:newsml_L4N3UI0AF:0-volatility-surges-on-china-oil-futures-after-us-sanctions-yangshan-port/
[2] https://economictimes.indiatimes.com/markets/commodities/news/crude-oil-prices-could-rise-to-100-if-india-stops-importing-from-russia-warns-clsa/articleshow/123563310.cms