Crude prices rise 1.5% amid supply concerns

Thursday, 6 August 2026

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Market Commentary

US Oil Imports From Saudi Arabia at Zero in July, First Time in 40 Years

The cessation of US oil imports from Saudi Arabia in July marks a significant turning point in the dynamics of global oil trade, with profound implications for both energy prices and market stability. This unprecedented event, the first of its kind in 40 years, underscores the shifting landscape of energy independence in the United States, driven by a combination of increased domestic production and strategic diversification of supply sources. The implications for oil prices are multifaceted; with the US relying less on Saudi crude, the Kingdom may respond by adjusting its production levels to maintain market share, potentially leading to increased volatility in global oil prices. Furthermore, this development could embolden other oil-producing nations to recalibrate their strategies, especially as OPEC+ continues to navigate the complexities of supply cuts and demand recovery. The absence of Saudi oil in US imports also reflects a broader geopolitical shift, where the US is increasingly looking towards other suppliers, including those in North America and Latin America, which could further alter trade flows and pricing dynamics. Additionally, this trend may influence refining margins, as US refiners adapt to a new slate of crude oils, potentially impacting the profitability of certain facilities that were optimized for heavier Saudi grades. In the context of ongoing global energy transitions, this shift could accelerate investments in alternative energy sources and technologies, as the US seeks to bolster its energy security and reduce reliance on traditional fossil fuels. Overall, the zero imports from Saudi Arabia not only highlight the evolving nature of US energy policy but also signal a potential recalibration of relationships within the global oil market, which could have lasting effects on pricing, supply chains, and geopolitical alliances.

Russian Oil Production Climbs Above 9 Million Bpd in July

The rise in Russian oil production to over 9 million barrels per day in July signals a significant shift in the global oil supply landscape, particularly as it underscores Moscow's resilience in the face of ongoing sanctions and geopolitical tensions. This increase, driven by stronger export dynamics and recovering refinery operations, suggests that Russia is effectively navigating its operational challenges, allowing it to maintain a steady flow of revenue critical for its economy. As Russia continues to pump more oil, the implications for global oil prices are multifaceted; an uptick in supply from such a major producer could exert downward pressure on prices, especially if demand does not keep pace. Furthermore, this production boost may complicate OPEC's efforts to manage output levels and stabilize prices, as the cartel aims to balance the market amidst fluctuating demand signals from key consumers like China and the United States. The resilience of Russian production could also embolden other non-OPEC producers to ramp up their output, potentially leading to a more fragmented market. Additionally, the geopolitical ramifications are significant; a sustained increase in Russian oil exports could undermine the effectiveness of Western sanctions intended to cripple its economy, thereby altering the strategic calculus for both Russia and its adversaries. As energy investors, the focus should be on how this production surge might influence refining margins, particularly in Europe, where the demand for Russian crude remains a contentious issue. In the broader macroeconomic context, the interplay between Russian output and global demand dynamics could shape the trajectory of oil prices in the coming months, making it essential to monitor both geopolitical developments and economic indicators closely. Overall, the climb in Russian oil production not only reflects the country's operational capabilities but also poses critical questions about the future of energy markets and price stability in an increasingly complex geopolitical environment.

Update: US Equity Indexes Mixed as Chipmakers Help Lift Technology While Crude Oil Jumps With Treasury Yields

Crude oil's recent jump, coinciding with rising Treasury yields, signals a complex interplay between macroeconomic indicators and energy prices that investors must navigate carefully. As yields climb, they often reflect expectations of tighter monetary policy, which can lead to increased borrowing costs and potentially dampen economic growth. However, the simultaneous rise in oil prices suggests that the market is pricing in a robust demand outlook, likely driven by resilient consumption patterns and supply constraints. This duality indicates that while higher yields may pressure equity markets, they are not yet curbing oil demand, which remains buoyed by ongoing geopolitical tensions and supply disruptions in key producing regions. Furthermore, the strength in technology stocks, particularly chipmakers, underscores a sectoral divergence where growth in technology may not translate directly to energy consumption patterns. Investors should also consider that OPEC's recent production decisions, aimed at stabilizing prices amid fluctuating demand, are likely to keep the market on edge. The balance between supply and demand is precarious, and any misstep could lead to significant volatility. As the global economy grapples with inflationary pressures, the oil market's response to these macroeconomic signals will be crucial in determining future price trajectories. Ultimately, the current dynamics suggest that while equity markets may face headwinds, oil prices could remain resilient, driven by underlying demand fundamentals and geopolitical uncertainties.

This Megaproject Could Keep Brazil's Oil Boom Running Deep Into the 2030's

The Bumerangue discovery represents a pivotal moment for Brazil's oil sector and has significant implications for global oil prices and energy markets. With an estimated 2.5 billion barrels of recoverable oil and the potential to produce 600,000 barrels per day, this megaproject not only bolsters BP's upstream portfolio but also reinforces Brazil's position as a key player in the global energy landscape. As existing pre-salt fields begin to decline, the timing of Bumerangue's development is crucial; it could effectively bridge the gap and sustain Brazil's production levels well into the 2030s. This continuity in supply is likely to exert downward pressure on oil prices, particularly as OPEC+ grapples with its own production cuts and the need to balance market dynamics. Furthermore, the successful execution of this project could enhance Brazil's attractiveness to foreign investment, drawing in capital that is essential for further exploration and development in the region. The geopolitical implications are also noteworthy, as Brazil's increased output could challenge the dominance of traditional oil producers, particularly in the Americas, and shift trade patterns. Additionally, as the global energy transition unfolds, Brazil's ability to maintain robust oil production will be critical in meeting short to medium-term energy demands while navigating the complexities of a decarbonizing world. Overall, Bumerangue is not just a boon for BP and Brazil; it is a strategic asset that could influence oil supply dynamics, pricing stability, and investment flows across the energy sector for years to come.

New Stratus Energy | TSX.V: NSE

LATAM-focused oil and gas explorer and developer operating in Brazil - recognized as a Top Performer in the TSX Venture 50.

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Oil Company News

SandRidge Energy, Inc. Announces Financial and Operating Results for the Three and Six-Month Periods Ended June 30, 2026 and Declares Dividend of $0.13 Per Share

(NYSE: SD) SandRidge Energy, Inc. announced financial and operational results for the three and six-month periods ended June 30, 2026. On August 4, 2026, the Board declared a dividend of $0.13 per share, payable on August 31, 2026 to stockholders of record on August 19, 2026. As of June 30, 2026, the Company had $114.7 million of cash and cash equivalents, including restricted cash of $1.3 million, and no outstanding term or revolving debt obligations. Second quarter net income was $26.7 million, or $0.72 per basic share, with adjusted EBITDA of $34.0 million and production averaging 19.7 MBoe per day, an increase of 11% on a Boe basis versus the same period in 2025. Oil production increased 22% and total revenues increased 48% during the quarter versus the same period in 2025. The Company completed four wells as part of its ongoing one-rig Cherokee development program in the first half of 2026, with two more wells completed in July. The company anticipates closing its previously announced acquisition of certain producing assets and leasehold interests in the Cherokee Play in the third quarter 2026, adding approximately 7,000 net leasehold acres, interests in 21 wells, and eight proven development locations.

W&T Offshore Announces Second Quarter 2026 Results and Declares Dividend for Third Quarter of 2026

(NYSE: WTI) W&T Offshore, Inc. reported operational and financial results for the second quarter of 2026 and declared a third quarter 2026 dividend of $0.01 per share. The company produced 34.7 thousand barrels of oil equivalent per day (49% liquids), incurred $71.6 million in lease operating expenses, and reported net income of $12.6 million, or $0.08 per diluted share. Adjusted Net Income totaled $3.5 million, Free Cash Flow increased by 50% to $31.4 million, and Adjusted EBITDA was $54.4 million for the quarter. Unrestricted cash and cash equivalents grew 15% to $150.7 million, resulting in a 9% decrease in Net Debt to $200.9 million, and total available liquidity at quarter end was $194.1 million. Capital expenditures on an accrual basis were $10.4 million, and asset retirement obligation settlements were $3.4 million. The company declared its 11th consecutive quarterly dividend of $0.01 per share, payable on August 26, 2026 to shareholders of record on August 19, 2026. The company projects third quarter 2026 production to be slightly higher than second quarter and expects full year 2026 capital expenditures and plugging and abandonment to be towards the higher end of guidance.

Lotus Creek Exploration Announces Second Quarter 2026 Operating Results

(TSXV: LTC) Lotus Creek Exploration Inc. reported second quarter 2026 production of 3,417 boe per day, comprised of 1,584 bbl per day of crude oil, 745 bbl per day of NGLs, and 6,528 mcf per day of natural gas. The company drilled 1.0 gross (1.0 net) light oil Belly River channel well in Wilson Creek at a total on stream cost of approximately $4.3 million, and at the end of July, the well was producing at restricted rates of approximately 920 boe per day. During the second quarter, Lotus Creek sold its non-core assets in Tableland, Saskatchewan for aggregate proceeds of $13.0 million, which were used to repay debt under its credit facilities. Adjusted funds from operations for Q2 2026 were $7.5 million, with cash flows from operating activities at $5.5 million and net income of $5.8 million, inclusive of a $5.5 million unrealized gain on risk management contracts. The company invested a total of $8.0 million of capital in the quarter and had net debt of $1.2 million as at June 30, 2026. The company projects average fourth-quarter 2026 production guidance of 4,800 to 5,200 boe per day and full-year capital and abandonment expenditures of $50.0 million. Lotus Creek expects to have ample liquidity through its credit facilities to continue to fund its capital program and operations.

Jersey Oil & Gas: Greater Buchan Area Update

(AIM:JOG) Jersey Oil & Gas plc announced that the North Sea Transition Authority (NSTA) has approved an extension to the Second Term of the P2170 "Verbier" licence, aligning its duration with that of the P2498 "Buchan Horst" licence. The Second Term of the P2170 licence has now been extended by approximately six months, to 28 February 2027. JOG holds a 20% interest in each of licences P2498 (Blocks 20/5a, 20/5e and 21/1a) and P2170 (Blocks 20/5b and 21/1d) located in the UK Central North Sea. The company is in the process of establishing a work plan and budget for next year to support progression of the GBA and the licence extensions. The company projects that work on these activities will continue into 2027 and that a request to extend the Second Term of the Buchan licence will be made to the NSTA towards the end of this year. The company also notes that hydrocarbons continue to account for around 75% of total energy usage in the UK. The company urges the government to bring an early end to the Energy Profits Levy and to deliver fiscal and regulatory reforms required to unlock long term investment.

TAG Oil Spuds T-200 Well at the BED-1 Concession in Egypt

(TSXV: TAO) (OTCQB: TAOIF) TAG Oil Ltd. announced the start of drilling operations at its T-200 vertical well at the Badr Oil Field ("BED-1") in Egypt's Western Desert. The well was successfully spudded on August 6, 2026. The T-200 well is targeting the Abu Roash "F" ("ARF") formation, a naturally fractured reservoir, and is planned for a total depth of approximately 4,200 meters. Drilling and completion operations are expected to take approximately 60 days. Upon successful completion, the well is expected to be brought into production immediately through the Company's planned early production facility, allowing TAG Oil to evaluate production rates, reservoir performance and future development potential. The company expects to provide updates as drilling progresses and will report results following completion and testing of the T-200 well. TAG Oil is a Canadian-based international oil and gas exploration company with a focus on operations and opportunities in the Middle East and North Africa.

CGX Energy | TSX-V: OYL

Offshore Guyana explorer holding a proven interest in the Corentyne block - over 11 billion barrels of recoverable oil equivalent discovered in the basin to date.

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Kelt Exploration Reports Financial and Operating Results for the Three Months Ended June 30, 2026

(TSX: KEL) Kelt Exploration Ltd. reported financial and operating results for the second quarter ended June 30, 2026, with petroleum and natural gas sales of $222,166,000 and adjusted funds from operations of $108,725,000. Average daily production reached a record high of 50,388 BOE per day, up 30% from 38,734 BOE per day in the same period of 2025, with production weighted 39% oil and NGLs and 61% gas. Net income for the quarter was $44,679,000, and net capital expenditures were $137,871,000. The company sold an average of 110 long tons of sulphur per day at an average net price of $919.44 per long ton, adding $9,200,000 to funds from operations. At June 30, 2026, net debt was $242,141,000, equating to 0.6 times forecasted 2026 adjusted funds from operations of $410,000,000. The company forecasts 2026 production to average between 50,000 and 52,000 BOE per day and adjusted funds from operations for 2026 to be $410,000,000, with a capital expenditure budget of $375,000,000. Mr. Patrick Miles, Vice President, Exploration, will retire effective August 12, 2026, and Mr. David White has been appointed as his successor.

Angola Confirms New Offshore Oil and Gas Reserves With Katambi-2 Well

The confirmation of new offshore oil and gas reserves at the Katambi-2 well in Angola is a significant development that could bolster the country's position in the global energy market and influence oil prices in the near term. This discovery not only enhances Angola's production capacity but also signals to investors that the country remains a viable player in the increasingly competitive landscape of oil exploration. With the quality metrics of the Katambi-2 well surpassing those of its predecessor, Katambi-1, there is potential for increased output that could alleviate some of the supply constraints currently affecting global markets. As OPEC+ navigates its production cuts and seeks to stabilize prices, Angola's new reserves could provide a much-needed boost to its output, thereby influencing the cartel's overall strategy. Furthermore, this development may attract foreign investment and technology, which are crucial for maximizing recovery rates in Angola's challenging offshore environment. The broader implications extend to the dynamics of supply and demand, particularly as global economies recover and energy consumption rises. If Angola can bring these reserves online efficiently, it could help mitigate upward pressure on prices stemming from geopolitical tensions or unexpected supply disruptions elsewhere. Additionally, the confirmation of these reserves may enhance Angola's bargaining power within OPEC, allowing it to advocate for a more favorable production quota. Overall, the Katambi-2 well represents not just a localized success but a potential shift in the balance of oil supply that could reverberate through the global energy markets, influencing everything from pricing strategies to investment flows in the sector.

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For informational purposes only. Not financial advice.

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