Oil Daily | Iraq Denies Sanctions Evasion Allegations; Reports of Oil Smuggling to Iran and Turkey

【Oil-Producing Countries Dynamics】

Iraq has denied accusations from U.S. Congressmen alleging it helps Iran evade sanctions by directing oil revenues to Iranian entities. The Congressmen have urged President Biden to investigate Iraqi officials, including Oil Minister Abdul-Ghani. Iraq's oil ministry dismissed the allegations, asserting its contracts adhere to international standards.

Reports have surfaced of oil smuggling from Kurdistan to Iran and Turkey, involving at least 200,000 bpd. Sources suggest both regional and federal Iraqi governments may be aware of the smuggling, with oil being transported to Iranian ports and neighboring countries, generating around $200 million monthly.

【Global Oil Supply and Demand】

China's natural gas storage is nearing capacity, potentially reducing LNG import needs. A cold winter could maintain strong LNG imports, while a mild winter might reduce demand. China's natural gas imports increased significantly in the first half of the year, driven by industrial and commercial needs, despite nearing storage capacity.

China boosted natural gas imports by 14.3% in the first half of the year, reaching 64.65 million tons. Between January and April, imports surged by 21% year-on-year as China prepared for summer demand amid lower international prices. Seasonal stockpiling from April to September mainly relies on long-term contracts.

【Industry News】

This week, oil prices rose following a significant selloff and potential hurricane formation in the Gulf of Mexico. Market dynamics have been influenced by weak U.S. job data and OPEC's decision to delay increasing output. Key reports from OPEC, the IEA, and the EIA are expected to impact prices further.