Oil Daily | China's Crude Import Surge Strains Global Supply, Raises Market Volatility Concerns

【Global Oil Supply and Demand】

China's crude oil imports surged to 12.14 million bpd in June, a 7.4% increase from last year. Driven by increased shipments from Saudi Arabia and Iran, this rise reflects restocking after refinery maintenance and opportunistic buying amid discounts. Analysts warn of potential market volatility as Chinese storage nears capacity.

Peak summer heat in Northeast Asia has increased LNG demand, reducing flows to Europe. This shift strains European supply as Asian weather patterns redirect LNG volumes. European utilities rely more on pipeline gas, complicating EU energy strategy and increasing costs. Washington's role becomes crucial in managing global LNG flow dynamics.


【Oil-Producing Countries Dynamics】

China's increased Gulf intake may tighten Atlantic Basin availability and constrain shipments to Europe. Saudi Arabia benefits from consistent volumes, while Iran's return highlights limits of enforcement. Chinese refiners aggressively secure summer barrels, and global markets watch Beijing's upcoming tender activity and Washington's response to sanctions workarounds.


【Latest Oil Policies】

Global crude benchmarks remain steady as the market awaits President Trump's statement on potential changes to U.S. energy policy, sanctions enforcement, and SPR management. Traders anticipate impacts on oil flows and pricing, as whispers of policy recalibrations circulate. The SPR inventory stands at 403 million barrels, with funding for replenishment significantly cut.


【Company News】

Puerto Rico temporarily shuts most power generators after New Fortress Energy cancels LNG cargo amid supply contract disputes. The power grid is strained, risking outages during peak demand. The dispute escalates with Puerto Rico owing millions to New Fortress Energy, while concerns rise over a proposed 15-year LNG deal.

U.S. gas supplier New Fortress Energy canceled an LNG shipment to Puerto Rico, causing potential outages. Despite operational power units using expensive fuel, New Fortress claims Puerto Rico owes millions for past projects. A temporary LNG supply deal is extended, but concerns arise over a proposed long-term contract.


【Others】

With gasoline demand strong and diesel margins narrowing, market participants anticipate President Trump's energy policy remarks as a potential inflection point. Hedge funds cautiously reposition as speculative net longs in Brent and WTI rise modestly, reflecting uncertainty over the administration's signal for energy policy adjustments.