As of June 11, the European Commission has proposed lowering the EU price cap on Russian oil from $60 to $45/barrel and banning financial transactions involving Nord Stream pipelines and additional Russian “shadow fleet” tankers. If changes are implemented, the lower price cap could:

🔷Tighten global oil supply

🔷Raise prices in the short term

🔷Further disrupt shipping logistics (e.g., tanker rerouting and availability)

In preparation for US-China trade talks, Brent and WTI climbed slightly to around $67 and $65/barrel, respectively, as the market anticipates improved global demand if US-China tensions ease. While changes are currently steady, increases in fuel prices will lead to increased operational costs in trucking, rail, and sea freight.

With hotter-than-normal summers across Asia, LNG (Liquid Natural Gas) demand is sharply increasing, and companies are scrambling to compensate for increased energy production. Potential effects include:

◼ Strains on tanker capacities

◼ Vessels divert from freight lanes

◼ Increased shipping costs

Finally, scepticism about geopolitical uncertainties (e.g., Trump-era policies, Red Sea tensions, and the Ukraine war) has led traders to avoid long-term tanker contracts. As a result, companies are finding it harder to predict freight rates and seeing higher spot market volatility.

🔗 Sources

1. EU Sanctions on Russian Oil – Reuters

2. U.S. LNG Exports Surge to Asia– Reuters