Saudi Arabia is poised to implement deep price cuts for Asian markets as Brent crude collapsed below the $72 threshold amid stabilizing supply routes. Concurrently, Russia has extended its export countersanctions through 2027 while negotiating emergency gasoline imports from Kazakhstan to address a severe domestic fuel crisis.
Global market
Saudi Aramco is expected to slash the Official Selling Price (OSP) of its flagship Arab Light crude for Asia by between $6.50 and $8.00 per barrel for August loading. This anticipated move follows a sharp correction in Middle Eastern benchmarks as the Strait of Hormuz tentatively reopens to traffic. Brent crude futures plummeted 5.28% over the week to settle at $71.53 per barrel, marking its lowest level since February. Market sentiment was further dampened by data from Kpler and Bloomberg showing Chinese crude imports hitting a multi-year low of 6.4 million barrels per day, an 8% decline from May.
In a potential shift for the producer bloc, Iraq has warned it may exit OPEC unless its production quota is increased, shortly before hosting European Union officials for high-level energy cooperation talks in Baghdad. Meanwhile, the US Department of Energy announced $17.5 billion in conditional loans to support five nuclear projects utilizing Westinghouse advanced reactors. In Asia, China’s latest energy plan reaffirmed the role of coal as a “bottom-line guarantee” for the electricity system, even as it targets a 30% clean energy share by 2031.
Russia & CIS
President Vladimir Putin signed a decree extending the ban on oil and petroleum product exports to entities adhering to the Western price cap until December 31, 2027. To combat a deepening domestic shortage, the Kremlin is seeking to purchase 50,000 tons of gasoline from Kazakhstan. However, Kazakh Energy Minister Yerlan Akkenzhenov indicated that gas production at the Karachaganak field has already been slashed by 25% following a drone strike on a Russian processing plant earlier this week, leading to caution in Astana regarding fuel exports.
The domestic crisis is impacting major industry players and logistics; Lufthansa CEO Carsten Spohr reportedly warned staff of potential flight suspensions due to a critical kerosene deficit. In the Russian regions, rationing persists, with authorities in Lipetsk extending a 30-liter limit per vehicle to prevent fuel stations from running dry. Despite the turmoil, Alexey Miller, the Chairman of Gazprom, announced that a new Far Eastern pipeline route for gas exports to China remains on track to launch in early 2027.
Armenia
Logistical cooperation in the South Caucasus saw a notable development as Azerbaijan dispatched a fresh shipment of petroleum products to Armenia, including 18 wagons of AI-92 gasoline (971 tons) and 8 wagons of diesel (467 tons). On the infrastructure front, officials presented the current progress of the life-extension program for the Armenian NPP second power unit, which remains a cornerstone of the republic’s energy independence.
Political tensions regarding the country’s strategic alignment intensified as Russian Foreign Ministry Spokeswoman Maria Zakharova urged Yerevan to finalize its choice between the EAEU and the European Union. Zakharova accused Prime Minister Nikol Pashinyan of engaging in “demagoguery” regarding the functionality of the union, asserting that the Armenian government’s recent actions do not constitute good-faith membership. Meanwhile, the CIS Secretariat stated it expects regional political stabilization following Armenia’s upcoming parliamentary elections.