Oil Daily | Middle East Tensions Spike as Israeli Strikes Miss Iranian Oil, Raise Supply Concerns

【Oil-Producing Countries Dynamics】

Iran's oil refineries and fuel depots remain undamaged following Israeli airstrikes targeting Iranian nuclear facilities. The Iranian oil ministry confirmed ongoing activities without interruptions. Retaliatory actions include launching over 100 drones towards Israel. Despite no direct hits on Iranian oil infrastructure, concerns exist over potential disruptions in Middle Eastern oil supply and the strategic Strait of Hormuz.

Israel has executed a series of airstrikes on Iran, targeting nuclear facilities to thwart Iran's nuclear ambitions. This operation, dubbed 'Rising Lion,' aims to disrupt Iran’s nuclear and missile programs. The strikes have intensified geopolitical tensions, with global markets reacting sharply as investors move towards safe-haven assets like gold.

Senior Russian and Chinese officials have discussed enhancing LNG and pipeline gas supply collaboration. This follows increased Russian energy exports to China due to Western embargoes post-Ukraine invasion. While existing gas flows via the Power of Siberia pipeline have reached capacity, negotiations for a new pipeline, Power of Siberia 2, face price disagreements.

Alberta seeks private investors for a new pipeline transporting crude from its oil sands to British Columbia's West Coast. This move aims to diversify Canada's oil exports amidst strained U.S. relations. Alberta is actively engaging major pipeline companies, exploring both consortium and individual company proposals, alongside federal support for infrastructure projects.

【Latest Oil Policies】

The One Big Beautiful Bill Act in the U.S. Senate could impact Trump's energy agenda with Section 899, which proposes higher tax rates on foreign companies amid claims of "unfair foreign taxes" from the EU and UK. This could affect Europe's major oil and gas firms, reducing their U.S. investment and job creation.

【Industry News】

Egypt has secured LNG supply agreements with major traders, including Saudi Aramco, Shell, and Trafigura, to stabilize its domestic energy needs amid supply challenges. The deals cover 290 LNG cargoes over two and a half years, with terms allowing payment deferral and prices linked to European gas benchmarks to address foreign currency issues.

【Others】

Global sales of electric vehicles (EVs) and hybrids increased by 24% in May, driven by China's market growth and government policies extending trade-in schemes. Despite challenges, such as restoring incentives to drive sales, EV adoption in Europe benefits from government support, contrasting with the U.S. where incentives have been cut.

The UK's National Energy System Operator (NESO) is incurring high balancing costs as wind farms in Scotland receive payments not to produce electricity. This inefficiency stems from network constraints requiring replacement energy in other regions to maintain supply-demand balance, highlighting the need for system improvements amid growing wind generation.