BofA: The Saudis Are Readying for a Long Oil Price War
Saudi Arabia is getting ready to engage in a protracted oil price war with its rivals, Bank of America’s leading commodities expert told Bloomberg on Monday. According to Francisco Blanch, BofA’s head of commodities research, the unfolding oil price war is going to be “long and shallow”, rather than “short and steep” as the Kingdom tries to claw back lost market share, especially from U.S. shale producers. Last month, OPEC+ announced a third output increase of 411,000 b/d for the month of July, a similar clip to the previous two months. Commodity experts began warning last year that Saudi Arabia was willing to ditch its traditional role as OPEC’s swing producer by abandoning its unofficial price target of $100 a barrel in favor of increased output. Saudi Arabia accounted for 2 mb/d of the group’s 3.15 mb/d in output cuts before it started unwinding in April. Traders are now bracing for hard times, with oil futures traders betting that the ongoing unwinding of production cuts by OPEC+ will eventually lead to a supply glut and even lower oil prices. According to the latest Commitment Of Traders (COT) report by CME Group, open interest in calendar spread options hit record levels in the current week, with speculators holding the biggest net position bets on weaker U.S. crude futures curve since 2020. Oil futures charts are flashing an unusual “hockey-stick” shape of the curve, with oil markets pricing tight supply through 2025, followed by an oversupply in 2026, according to the report. The spread between the WTI July contract and the August contract narrowed 3 cents on June 5 to $0.93 a barrel, while the spread between the December 2025 contract and the December 2026 contract widened by 10 cents to $0.53. “There is a lot of risk in the trade,” Nicky Ferguson, head of analytics at Energy Aspects Ltd, told Yahoo Finance, adding that rising activity is being driven by “strong prompt, weak deferred balances, and a very changeable geopolitical environment that makes holding futures difficult.” This is hardly the first time that Saudi Arabia is engaging in a race to the bottom with its rivals. The kingdom has undertaken a similar strategy at least twice over the past decade, with varying degrees of success. U.S. shale producers successfully weathered the 2015 oil price war by rapidly reorganizing into a meaner and leaner production machine that could breakeven at WTI price of as low as $35 per barrel, down from $70 per barrel just a few years earlier. Five years later, the U.S. Shale Patch required the direct intervention of then U.S. President Donald Trump, whose threats of withdrawing military support for Saudi Arabia persuaded de facto Saudi ruler Crown Prince Mohammed bin Salman to toe the line and abandon the oil price war. Unfortunately, U.S. shale producers are more vulnerable this time around: a March Dallas Fed Energy Survey found that the U.S. Shale Patch requires WTI prices of $65 per barrel or more to drill profitably. U.S. rig counts have declined 4% Y/Y and are now 7% below the 5-year average as producers scale back drilling activity amid rising costs. Tariffs on U.S. steel imports are partly to blame here, increasing the price of fracking equipment. Meanwhile, geological constraints are also posing a significant obstacle to efforts to ramp up production as the nearly two-decades-old U.S. shale boom plateaus. The EIA has predicted a small increase in U.S. crude output to 14 million barrels per day in 2027, up from 13.2 million barrels in 2024. That said, Saudi Arabia and OPEC+ do not have carte blanche to continue flooding the markets with oil: the Kingdom needs Brent price of at least $96.20 per barrel to balance its books in fiscal year 2025, approximately $30 per barrel higher than current Brent price. Further, the country drew down considerably on its foreign exchange reserves in past oil price wars, limiting its ability to sustain another long war now. However, Saudi Arabia is likely to gain more leverage in future showdowns as it continues to diversify its economy. The country is accelerating its $2.5 trillion mining plans, while also investing in technologies to optimize oil production and lower carbon emissions. Saudi Arabia’s mineral reserve potential has grown dramatically over the past decade, from $1.3 trillion forecasted eight years ago to $2.5 trillion currently. The Kingdom has set a goal to rapidly grow the mining sector, with its contribution to the economy expected to jump from $17 billion to $75 billion by 2035.
Oil Prices Slip Despite U.S.-China Talks
Crude oil prices moved lower earlier today even after the latest round of talks between the United States and China on trade yielded positive results, as traders adopted a wary stance on the news. At the time of writing, Brent crude was trading at $66.82 per barrel and West Texas Intermediate was changing hands for $65 per barrel, after U.S. and Chinese government officials said they had agreed on easing export restrictions and devising a framework for the resolution of their trade conflict. “We have reached a framework to implement the Geneva consensus and the call between the two presidents,” U.S. Commerce Secretary Howard Lutnick said, as quoted by Reuters. “The idea is we’re going to go back and speak to President Trump and make sure he approves it. They’re going to go back and speak to President Xi and make sure he approves it, and if that is approved, we will then implement the framework.” It was perhaps the fact that the two presidents had yet to sign off on the framework that kept oil traders wary, even though oil prices are trending higher than last week. “In terms of what it means for crude oil, I think it removes some downside risks, particularly to the Chinese economy and steadies the ship for the U.S. economy – both of which should be supportive for crude oil demand and the price,” IG analyst Tony Sycamore told Reuters. Meanwhile, the European Union said it was discussing a ban on the currently non-operating Nord Stream pipeline and a lower price cap on Russian crude as part of its next package of sanctions against Moscow—the 18th in a row. In potentially bearish news for oil, the World Bank lowered its global growth forecast for the year to 2.3% from 2.7%, saying the global economy is set for its weakest year since 2008.
Alaska LNG promises gas cheaper to Asia and Europe than on the American stock exchange
The multibillion-dollar LNG project in Alaska is trying to attract investors and declares that the cost of gas will be lower than on the American Henry Hub exchange. Until recently, investors were in no hurry to visit Alaska, but Donald Trump’s threats to impose import duties forced companies in major Asian countries to reconsider their attitude. The American Glenfarne Alaska LNG, which is the main shareholder of Alaska LNG, announced the completion of the first round of the strategic partner selection process, which was attended by more than 50 companies from the USA, Japan, South Korea, Taiwan, Thailand, India and the European Union. “These potential partners have officially expressed interest in a contract value of more than $115 billion for various partnerships, including the supply of equipment and materials, services, investments and client agreements,” Glenfarne Alaska LNG reports. The company did not specify what amounts were offered as investments or for LNG purchases. At the same time, they noted that Alaska LNG’s economic performance allows it to supply LNG to Asia at prices that are lower than prices on the American Henry Hub exchange. Traditional contracts for the supply of American LNG assume that the cost of LNG is based on the following formula: the price of gas at Henry Hub plus 10-15% and the cost of liquefaction. Alaska LNG expects to produce 20 million tons of LNG (about 28 billion cubic meters of gas) per year. At the same time, to implement the project, it is necessary to build not only a terminal, but also an 800-mile gas pipeline, which increases the cost of the project to $ 40 billion. Until recently, investors and consumers were not particularly interested in the project and it did not have a single agreement. The situation changed after Donald Trump occupied the White House and unleashed a trade war. Due to the threat of import duties, many Asian countries have changed their attitude to the project.
Asian LNG spot market prices dip amid weak demand and high inventories
Prices on the Asian LNG spot market slid for the first time in five weeks, Reuters reported on June 6. Weak demand in the region saw the average LNG price for July delivery fall to $12.30 per million British thermal units (mmBtu). It marks a slight dip from $12.40/mmBtu a week earlier High inventory levels, especially in Japan, which is the world’s second-biggest importer of LNG, have depressed prices. According to Japanese government data cited by Argus, the country’s utilities have higher stock levels compared to the same time in 2024. Japan’s LNG stocks at its utilities are 1.3% higher than the volume at this time last year and 7.6% higher than the average for the end June for 2020-2024. And while temperatures are expected to climb higher than seasonal averages in the weeks ahead in Japan and South Korea, the high inventory levels are expected to keep demand weak on the spot market. Indeed, demand for LNG from the spot market has been low in northeast Asia, but it has also been weak in southeast Asia. The arrival of monsoon season in India has reduced power demand in India. Moreover, rough seas in the Bay of Bengal have also disrupted LNG operations in Bangladesh, with at least two tankers halting ship-to-ship fuel transfers off Moheshkhali Island amid stormy monsoon conditions. If conditions worsen, LNG tankers and floating storage regasification units (FSRUs) may be required to be moved to safer locations in deeper waters, which would affect Bangladesh’s LNG imports.
India targets 1,000 hydrogen-powered buses and trucks by 2030
The Indian government has announced plans to deploy at least 1,000 hydrogen-powered trucks and buses by 2030. The government has identified hydrogen as a more practical solution for long-distance freight trucks, offering key advantages over battery-electric alternatives, especially in terms of preserving cargo space and enabling faster refuelling. Abhay Bakre, Mission Director of India’s National Green Hydrogen Mission (NGHM), reportedly outlined at an event that up to 50 hydrogen-powered trucks and buses will be operating this year. Bakre added, “I hope by 2030, more than 1,000 trucks or buses will be plying and used commercially in the country. That is what we are expecting.”
India’s Oil & Gas Sector Poised For Steady Growth Through FY26-27 Despite Market Volatility: Research
India’s oil and gas sector is projected to maintain robust growth through FY26 and FY27, despite recent market turbulence, according to a research note by Systematix Institutional Equities. The brokerage expects that India’s oil and gas companies are likely to post average sales growth of 6 per cent in FY26 and 7.8 per cent in FY27, with ebitda rising by 12.9 per cent and 9 per cent, and Pat increasing by 13.3 per cent and 10.1 per cent year-on-year, respectively. Top investment picks include Reliance Industries (RIL), GAIL India (GAIL), Mahanagar Gas (MGL) and Gulf Oil Lubricants India (GOLI). The oil market witnessed high volatility in May 2025. Brent crude prices dropped 22.9 per cent year-on-year and 3.8 per cent month-on-month, driven by higher Opec output from Saudi Arabia and the UAE. This decline in prices also led to a fall in US rig counts, indicating caution in upstream investment. However, refining margins rebounded sharply, with the benchmark Gross Refining Margin (GRM) increasing 85 per cent month-on-month and 121 per cent year-on-year to USD 6.4 per barrel. The surge was attributed to lower crude costs and stronger cracks in gasoline, gasoil, jet fuel, kerosene, and naphtha. Natural gas markets showed divergent trends. While US Henry Hub prices dropped 31.8 per cent since January 2025 due to oversupply and mild weather, Asian spot LNG (Japan Korea Marker) rose 6.7 per cent year-on-year to USD 11.9/mmbtu, buoyed by regional demand. In the final quarter of FY25, the oil and gas sector saw flat year-on-year earnings but sequential improvement, especially among gas and City Gas Distribution (CGD) companies. While EBITDA per standard cubic metre (scm) declined on a yearly basis, it recovered sequentially, supported by price increases and favourable gas sourcing.
Saudi, Russia, Iraq, UAE boost oil supply to India, capture 78% market share
India’s top four oil suppliers Saudi Arabia, Russia, Iraq, and the UAE all key OPEC+ members, have sharply increased crude shipments to India, collectively supplying an additional 375,000 barrels per day (bpd) in May compared to April. Their combined market share in India, the world’s third-largest oil consumer, has now reached about 78%. According to energy tracker Vortexa, these four nations exceeded their OPEC+ commitment of 359,000 bpd production increase under the alliance’s expansion plan of 409,000 bpd. Russia remained India’s largest crude supplier, benefiting from ongoing barrel discounts. In May, Saudi Arabia boosted output by 166,000 bpd and increased exports to India by 135,673 bpd, raising its market share to 13.1%. Russia, Iraq, and the UAE raised output by 79,000 bpd, 37,000 bpd, and 77,000 bpd respectively, exporting 114,016 bpd, 66,642 bpd, and 58,365 bpd to India. Their combined share climbed 8.1 percentage points to 77.5%. Conversely, African suppliers’ share dropped from 11.8% to 4.9%, and US crude exports to India declined to 5.7% from 7%. Saudi Arabia’s increased supply to India came with significant price cuts to Asian buyers, with Saudi Aramco lowering the May official selling price for Arab Light crude by $2.30 per barrel — its lowest in nearly four years. This pricing strategy has made Middle Eastern crude more competitive versus Brent-linked grades, analysts say. Looking ahead, eight OPEC+ countries plan to increase output by an additional 411,000 bpd in June and July, keeping crude prices steady between $60-$65 per barrel, well below the 2024 average of $80.
India delivers LPG to over 330 million consumers after booking within hours: Hardeep Puri
Union Minister for Petroleum and Natural Gas, Hardeep Singh Puri, announced on World LPG Day that over 330 million consumers in India now receive LPG cylinders delivered to their homes within hours of booking. This achievement reflects the government’s ongoing efforts to provide clean cooking fuel across the country. Puri praised the Pradhan Mantri Ujjwala Yojana (PMUY) for its role in transforming cooking habits, especially in rural and remote areas. He noted that more than 103.3 million women have received free LPG connections through PMUY, helping them switch from traditional fuels to cleaner, safer LPG. This shift has improved health by reducing harmful smoke and saved time for women, enhancing their daily lives. He also acknowledged the hard work of LPG producers and distributors who have expanded the network to nearly every corner of India, from small villages to large cities. Despite a 58% rise in global LPG prices, PMUY beneficiaries pay only Rs 553 for a 14.2 kg cylinder, compared to Rs 853 for regular consumers, thanks to government measures like excise duty cuts and support to oil companies. Puri emphasized that these efforts have protected consumers, saved countless trees from deforestation, and reduced deaths caused by indoor air pollution, making cooking safer and healthier for millions of Indian families
India’s GAIL sells LNG cargo as early monsoons cause weak power demand: Sources
GAIL (India) Ltd has re-sold one liquefied natural gas (LNG) cargo this week, said three market sources on Friday, as the state-run firm’s storage tanks for the fuel are full amid weak power demand in India. Fewer LNG imports by GAIL, the country’s largest gas distributor, could reduce India’s overall appetite for the super-chilled fuel. India is the world’s fourth largest LNG buyer, importing about 26 million metric tons last year as it goes through rapid urbanisation and industrialisation and to meet growing power demand. However, GAIL’s LNG tanks are filled to the brim as power demand slumped due to cooler weather from the monsoon season, leading the company to sell its LNG cargo, said two of the sources. GAIL did not immediately respond to a request for comment. The three sources did not identify which cargo GAIL sold, but shiptracking data shows two LNG vessels controlled by GAIL diverting from their routes this week.
Oil Prices Set For Another Weekly Gain
Crude oil prices were set for a weekly gain despite a slide earlier today, mostly on renewed optimism about U.S.-Chinese trade negotiations but also on supply uncertainty in Venezuela in Iran. At the time of writing, Brent crude was trading at $65.15 per barrel, with West Texas Intermediate at $63.18 per barrel, following President Trump’s statement that the latest talks, directly with China’s Xi, had ended in a “very positive conclusion,” and that the U.S. was “in very good shape with China and the trade deal,” as carried by Reuters. Meanwhile, the likelihood of more U.S. sanctions on Venezuelan oil and the threat of Israeli attacks on Iranian energy infrastructure provided additional support for prices. “The potential for increased US sanctions in Venezuela to limit crude exports and the potential for Israeli strike on Iranian infrastructure add to upside risks for prices,” BMI analysts said in a note today, adding that “both weaker demand for oil and increased production from both OPEC+ and non-OPEC producers will add to downside price pressures in the coming quarters.” The BMI note came out after on Thursday the International Energy Agency said in its new World Energy Investment report it expected demand for oil to weaken this year. The IEA also predicted investment in oil and gas exploration would decline by 6% in 2025, in tune with its demand forecast. Demand for oil this year, according to the IEA, is set to decline for the first time since the pandemic lockdowns of 2020. Supporting the bearish view on oil this week was the news that Saudi Arabia was going to cut its oil prices for Asian buyers yet again – to the lowest in two months. The cut, however, was smaller than analysts expected, suggesting some resilience in demand in the world’s largest importing market.