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Insight Weekly Market Report Market Report - 05.08.2025

Market Report Week 32 - 05.08.2025

Other insights Aug. 05, 2025
Market Report Week 32 - 05.08.2025 Download the full report here

Four factors impacting oil and bunker markets


The Weekly Market Report from Dan-Bunkering is back after the summer break. We hope everyone has enjoyed the summer. We will use this first edition after the summer break to provide a brief update on several of the key factors that have driven the oil market over the past month and will drive the market over the coming months.

There has been plenty of news for the oil market to digest in July. Nevertheless, the oil price has been surprisingly stable, just below 70 dollars, although with a brief spike at the end of the month when Trump threatened India with sanctions for continuing to import Russian oil.

Bunker Port Brief

Singapore

The Asian LSFO market is expected to remain under pressure, in part due to increasing arbitrage supplies for further out dates. Some anticipate a premium uplift due to lower barge availability for very prompt slots.
The Asian HSFO market will likely stay rangebound, as recovering feedstock demand offsets waning summer utility demand. Limited barging slots for very prompt refuelling requirements are expected to keep downstream margins healthy.
The Asian LSMGO market is anticipated to stay supported as swing barrels are directed to Europe, where inventory levels remain at multi-month lows.

Fujairah

Demand remains subdued due to the summer holiday season, with healthy availability across all grades keeping premiums under pressure.

Houston

Some tightness around HSFO barging. Product availability is okay, but suppliers' bargaining for prompt HSFO has been tight. Recommending 7 days' notice before ETA. 
Port operating conditions have been normal. We are entering the most active part of Hurricane season in the US Gulf, so weather conditions should be monitored and taken into account when booking. Bolivar Roads anchorage and Offshore US Gulf bunkering tend to be most heavily impacted. 

Gibraltar

Market is stable, and premiums as seen last weeks. 
If cargo is tight on Malta, expect to see an impact in Gib/Alg aswell. 

Malta

Increase on premiums, due to tight cargo. No news on when new cargo will hit the market.
As of now, increased notice days in order to secure avails and 1 barge supply. 

Port Louis

A relatively slow week with slow trade in the bunkers-only market. Fishing vessels continue to be the bulk of the gasoil trade with fleets in the region.

Durban

Poor weather in the eastern region of South Africa has led to port closures and delays bringing vessels in for cargo ops and bunkers. Once vessels are in, the barge operations are good with supplies running efficiently. Richards Bay further north has the local barge out for repairs, but a replacement has been arranged and no bunker supplies effected currently.

Walvis Bay

Poor weather in the region means most, if not all supplies, are brought into anchorage which incur additional costs. Some tight VLSFO and HSFO for the next few days, with replenishment expected 7th August.

 

New York did not report this week. 

For port availability and demand, download the full report here. 

1. OPEC+ increases production

Chart 1

OPEC+ announced over the weekend that from September, it will phase in the final 547,000 barrels per day of the voluntary cuts. It means that the full extraordinary reduction of 2.2 million barrels per day introduced in 2023 will have been reversed.
The question now is whether the group will begin to phase in the next layer of cuts – 1.66 million barrels per day – which several media outlets report has been under discussion. The cartel meets again on September 7.  
We do not expect OPEC+ to add more in 2025, as growth in US oil production has already halted. OPEC+ has thus regained some of its market share, and we doubt especially that the Saudis want the oil price to fall further. According to the IMF, the country, with current production levels, requires an oil price in the range of USD 85-90 to balance its state budget.
However, there is little doubt that OPEC+ has initiated a battle for market share, particularly with the US. Oil demand peaks in the third quarter, which almost inevitably sets the stage for oversupply in Q4 2025 and Q1 2026. This creates room for stricter sanctions against Russia or buyers of Russian oil without necessarily causing a sharp increase in oil prices.
The chart to the right shows the net addition of OPEC+ oil when taking the so-called compensation cuts into account. 

2. Trump steps up his rhetoric towards the Indian oil buying

Chart 2

Trump has this week intensified his rhetoric towards India over its purchase of Russian oil. On his social media platform, he wrote yesterday that the country profits from its large purchases of Russian oil and is indifferent to the fact that it thereby supports the Russian "war machine" and the many Ukrainians killed. 
Trump stated directly that he would substantially increase tariffs on India. Precisely how much tariffs will be increased beyond the already announced 25% remains unclear.
India, for its part, has refused to yield and stop importing Russian oil. This year, it has bought around 1.7 million barrels per day (mb/d) from Russia, accounting for about half of Russia's seaborne oil sales. India exports around 1.4 million barrels per day (mb/d) of refined products to, among others, the EU, which, from January 21 2026, will ban imports of refined products based on Russian crude oil.
If India stops importing Russian oil, it would make it significantly harder for Russia to sell its oil and reduce the global supply of both crude oil and refined products from India to the world market.
However, we have seen only a minimal impact this week on the diesel, gas oil, and MGO markets, with cracks (vs Brent) essentially unchanged. The distillate market is particularly dependent on Indian exports and is already supported by low inventories. 
The market generally does not believe Trump will implement measures that could meaningfully drive up prices for oil and oil products.

3. The US economy is losing momentum

Chart 3

Friday's US labour market report was significantly weaker than expected. Only 73,000 new jobs were created in July, and job growth in May and June was revised down by a combined 258,000.

These figures prompted Trump to fire the head of the statistical agency – an action that could undermine confidence in future US data.

The report was the clearest sign yet that US tariffs are taking a toll on the economy.

Interest rates dropped sharply, and markets now expect Trump to receive his first rate cut in September – not because he demands it, but because the labour market is far weaker than anticipated. Much will depend on the inflation numbers for July and August.

It appears the US economy is heading into a stagflation scenario – that is, rising inflation combined with slowing or even negative growth.

Notably, the dollar seems to have stabilised. Many speculative investors have been shorting the dollar, which could lead to a rebound. However, concerns around US growth, debt levels, and interest rate expectations could still weigh on the currency.

4. High tariffs – but not on oil and bunker fuel

Container ship Accordion 739X739px2

There is a growing consensus that high US tariffs are here to stay. The EU and Japan are facing tariffs of 15 per cent, while several countries in Asia, Africa, and South America may face even higher levels.
Equity markets have so far interpreted the tariff levels as manageable – it could have been worse. But tariffs are now at their highest levels in nearly a century. This is an economic experiment without precedent.
Friday's jobs report suggests that the US economy could be the short-term loser. High tariffs are weighing on global growth, but it is worth noting that the IMF last week revised its global growth forecasts upwards to 3.0 per cent for 2025 and 3.1 per cent for 2026.
Energy, as a rule, is not subject to tariffs.

Chart 1 Chart 2 Chart 3 Container ship Accordion 739X739px2

Our assessment


All else equal, the supply and demand balance points to lower oil prices.
However, we believe sanctions and geopolitical risks will provide price support in the second half of the year.
We do not expect OPEC+ to phase in additional production during the autumn.

From a risk-reward perspective, it makes sense to hedge oil exposure when Brent trades below USD 70.

For buyers in non-USD currencies, a potential strengthening of the US dollar represents a separate risk – as does a rising crack spread on diesel, gasoil, and marine gas oil (MGO). If we see tougher sanctions against Russia – combined with the EU's ban on refined products based on Russian crude, which will take effect on January 21, 2026 – there is a clear risk of a widening crack spread, particularly for middle distillates such as diesel and  MGO. 

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