Global crude benchmarks held largely steady on Friday as traders weighed geopolitical uncertainty ahead of a high-profile meeting between U.S. President Donald Trump and Russian President Vladimir Putin a potential market catalyst that could reshape sanctions risk and oil flows.
As of midday trading, Brent Crude inched up 0.24% to $66.59, WTI Crude hovered at $63.88 per barrel (unchanged), while Murban Crude slipped 0.71% to $68.72. Natural gas futures retreated 2.51% to $2.990 per MMBtu.
Analysts say Brent’s gradual slide toward $65 reflects expectations that any easing of U.S. sanctions on Moscow could reduce the geopolitical risk premium embedded in current prices. However, a breakdown in talks could spark a reversal, pushing Brent above the $70 threshold.
Market drivers:
- Saudi Aramco price hikes: Saudi Arabia lifted September OSPs for Asia-bound light grades by $1.20 per barrel and Arab Light by $0.90, in line with a stronger Dubai M1-M3 spread.
- U.S. crude export slump: July exports fell to 3.1 million b/d, the lowest since October 2021, driven by a narrowing arbitrage and China’s ongoing boycott of U.S. crude.
- Kirkuk-Ceyhan restart: Iraq is poised to resume 80,000 b/d exports via the pipeline after a 17-month shutdown, though Kurdish output remains hampered by security disruptions.
- Guyana’s production boost: ExxonMobil’s Stabroek Block started up its fourth FPSO, “One Guyana,” four months ahead of schedule, adding 250,000 b/d capacity.
- India’s spot buying spree: State-run IOC purchased 22 million barrels this week from Brazil, the U.S., and Libya to offset Russian supply risks.
- Long-term LNG commitments: Israel and Egypt inked a $35 billion, 25-year gas deal to supply 130 bcm from Leviathan by 2040.
Additional supply-side shifts are emerging as Chevron tankers return to Venezuela, Argentina’s YPF expands in Vaca Muerta, and Mexico reconsiders its fracking ban under Pemex’s new strategic plan.
The geopolitical backdrop is adding layers of volatility to an already supply-sensitive market, with forward spreads narrowing and risk premiums fluctuating in anticipation of potential U.S.-Russia détente. Traders are keeping a close eye on demand signals from Asia, refining margins, and currency movements, particularly the U.S. dollar’s strength, as they position ahead of the Trump-Putin summit.