- Last week we saw the Treasury Department sanction its first Chinese oil trader - Zhuhai Zhenrong over crude oil purchases from Iran. The move was meant to send a message, but it is unclear that message has been received. The panic now is that Trump could target China’s state-run CNPC with sanctions because it has, according to tanker data, recently deployed a new fleet to transport oil from Iran through one of its subsidiaries. If Washington moves to sanction CNPC that would indicate a major escalation of this conflict. At the same time, panic is being further spread with Bank of America Merrill Lynch’s theory that China could potentially decide to defy the latest U.S. tariff threat by ramping up imports of Iranian crude, which could cause prices to plunge by as much as $20-$30.
- Libya’s NOC says it will gradually restart production at its largest oilfield, El Sharara. The oilfield was shut down after a valve on the pipeline linking it to the Zawiya oil terminal was closed Tuesday last week. A local armed group had earlier prevented NOC staff from reopening the valve. Libya’s production fell to its lowest in five months over this force majeure. Production had fallen below 1 million bpd. Force majeure has not yet been lifted. Force majeure was also declared on the Zawiya terminal on July 20 and then lifted on July 22nd.
- Alberta reports that its oil inventories are now at near two-year lows, following the institution of…