Oil market fundamentals return with aplomb

The oil futures slide began even before Iran's muted response to the US bombing of its nuclear sites had ended on Monday. And the benchmarks tanked further still once a ceasefire between Israel and Iran took effect in the following session. 

That's because oil market fundamentals took hold the moment de-risking started, evaporating the so-called risk premium double quick. 

Prior to this week's declines, oil futures had risen 20% month-over-month. Those price gains have now almost entirely been lost. And so much so for the outlandish claims that Iran may shut the Strait of Hormuz, which was never going to happen as yours truly noted in a column for Forbes. 

Since the start of hostilities on June 13, the Oilholic has always maintained that if there was a swift end to the conflict - as has been the case - price will fall rapidly again. That's because the market remains well supplied with plenty of non-Middle Eastern, non-OPEC crude from Brazil, Canada, Guyana, Norway, and indeed - the US - still the world's number 1 producer of oil. 

If you believe global oil demand growth for 2025 to be in the region that's just a smidge north or south of 1 million barrels per day, that can be serviced by growth in non-OPEC production alone. And OPEC+ led by the Saudis and Russians is also pumping more in a fight for market share. 

It all points to a market surplus come the end of 2025, especially for light sweet crude. That itself points to oil prices heading lower, perhaps even below $60! Well that's all for the moment folks! More musings to follow soon. Keep reading, keep it here, keep it 'crude'! 

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© Gaurav Sharma 2025. Photo: Oil pump jack building block model at the AVEVA World 2023 Conference, Moscone Center, San Francisco, US © Gaurav Sharma, October 2023.

Crudely heading down uncharted 'dire straits'?

On Saturday night the Israel-Iran conflict, and its domino effect on the world's energy markets, took another twist after the US bombed Iranian nuclear facilities. 

The Americans dropped 14 “bunker buster” bombs against three nuclear facilities in Iran - Fordo, Natanz and Isfahan. The move came just over a week on from Israel's own campaign of attacks on Iran's nuclear and military targets began. Inevitably, Iran responded with retaliatory missile strikes of its own on Israel. 

But the latest escalation by the US takes the oil market into uncharted waters (or straits shall we say). Early on in Israel's campaign, many assumed Iran's oil and gas infrastructure would not be attacked. However, that myth was shattered after Israel attacked Shahran Oil Terminal in Tehran, and two natural gas fields that Iran shares with Qatar. 

It hinted at the possibility that the Israelis were in no mood to compromise. Thereafter, oil futures capped the $75 mark, and lurked some 20% above last month's levels using Brent as a benchmark. 

Unsurprisingly, old market chatter that Iran would somehow close or attempt to close the Strait of Hormuz has resurfaced, as yours truly discussed in an interview with Germany's ARD Radio 1 on Tuesday while out in the Middle East. 

The Oilholic also discussed the direction of the market with Turkiye's Anadolu News Agency noting that if the crisis persists and / or worsens, crude price points will have to recalibrate to a new normal around $80 per barrel Brent prices. However, if tensions or the conflict are quickly diffused, we could see a drop to $70 or below, as and when more normalized market fundamentals kick in once again.

The Oilholic also subsequently said in a BBC interview on Friday that the very fact we happen to be discussing oil breaching a $80 ceiling and not a $100 one is because the market remains well supplied ahead of the US summer driving season. 

It's also a perception helped in no small part by the Saudis via OPEC+ and a decision by the producers' group to raise production for three successive months. 

It's why the market has priced in a heightened level of near-term hostilities between Israel and Iran in as balanced a way as possible, without succumbing to unfounded conjecture or worse still an actual push toward $100 driven by paper bulls - especially now that chatter about Tehran blockading the Strait of Hormuz is all the rage again. 

So, here's yours truly's take via Forbes on why its something the Iranians have threatened to do since the 1980s, but have in actual fact never done or attempted even once, and remains a highly unlikely prospect despite any chatter of any sort. 

However, Iran-backed Houthi Rebels could make life difficult for energy shipping by resuming their attacks in the other strait - i.e. the Bab al-Mandab Strait on the Red Sea/Gulf of Aden. 

Of course, the Israel-Iran story still has some way to go. But the presence of a lot of non-OPEC oil is keeping somewhat of a lid on things. It's why in the small hours of the morning in Europe, and early morning trading in Asia on Monday, gains in the wake of the attack still remain muted at sub-$80 Brent crude prices. (02:00am BST)

Well that's all for the moment folks! More musings to follow soon. Keep reading, keep it here, keep it 'crude'! 

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© Gaurav Sharma 2025. Photo I: Oil production site. © Monika Wrangel / Pixabay, May 2015. Photo II: Energy Analyst Gaurav Sharma on BBC News channel. © BBC, June 2025. 

Media missives from Abu Dhabi Infrastructure Summit

With the inaugural Abu Dhabi Infrastructure Summit drawing to a close on June 18, the Oilholic enjoyed an engaging week out in Abu Dhabi, UAE.

 

An action-packed two days included insightful fireside chats, panel discussions, and wider engagements on international collaboration in the infrastructure space. 

All of The Oilholic's blog entries for Abu Dhabi Infrastructure Summit may be found here. 

Yours truly also provided insights for Forbes from the event as detailed below:

• Embed Sustainability And Resilience Into Infrastructure, Experts Say, June 18, 2025
• Where Do Sustainability And Affordability Sit In The Pursuit Of Smart Cities?, June 20, 2025

Well that's all for the moment folks! More musings to follow soon. Keep reading, keep it here, keep it 'crude'! 

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To email: journalist_gsharma@yahoo.co.uk  

© Gaurav Sharma 2025. Photo I: Abu Dhabi Infrastructure Summit plenary stage © Gaurav Sharma, June 2025. © Gaurav Sharma, June 2025.

Striving for smart, sustainable cities & urban excellence

On Wednesday, the second and final day of the Abu Dhabi Infrastructure Summit, over 4,000 attendees visited the exhibition and conference. 

They included royalty as the Crown Prince of Abu Dhabi and Chairman of the Abu Dhabi Executive Council Sheikh Khaled bin Mohamed bin Zayed Al Nahyan joined the crowds. He met exhibitors, officials and visitors alike during his visit. 

The Crown Prince also stressed on the vital importance of leveraging advanced technologies in urban planning to ensure the long-term sustainability of infrastructure that meets the aspirations of current and future generations and enhances societal wellbeing, by investing in integrated, future-ready infrastructure, including facilities powered by artificial intelligence and other smart solutions. 

Of course, the pursuit of urban excellence is a moving target with diverse global contexts. Abu Dhabi’s ambition to redefine urban living through world-class infrastructure and quality of life enhancements finds resonance in the transformative strategies of pioneering global cities.

That was the subject matter of the second panel at the summit moderated by The Oilholic at ADIS. The panelists included Daniel Liu, Executive Director of MORROW Intelligence, Emre Arolat, Founding Partner and Principal at Emre Arolat Architecture, Greg Bargull, Executive Director of Development at Modon and Asma Aljassmi, Executive Director of Projects Control and Operations at Aldar Projects. 

We discussed how successful urban centers worldwide are redefining city planning through context-specific innovations that balance economic growth with human-centric design. 

From Singapore’s holistic balance of economic growth, environmental sustainability, and social inclusivity to Chongqing’s technology and sustainability integration, Copenhagen’s Nordhavn district’s 5-Minute City model, and Abu Dhabi’s Masdar City balancing sustainability, heritage and innovation - the world’s most innovative cities promote a strong sense of place and identity for their residents and community said the panelists.

They also offered pragmatic insights on the challenges and opportunities along the route toward urban excellence, and learning as much from the mistakes of others as their successes, whilst keeping sustainability and energy efficiency almost always in sharp focus. 

And on that note, it's a wrap from the inaugural ADIS folks! More musings to follow soon. Keep reading, keep it here, keep it 'crude'! 

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© Gaurav Sharma 2025. Photo I: Crown Prince of Abu Dhabi and Chairman of the Abu Dhabi Executive Council Sheikh Khaled bin Mohamed bin Zayed Al Nahyan (right) visits the exhibition at the Abu Dhabi Infrastructure Summit © Abu Dhabi Media Office, June 2025. Photo II: Energy analyst Gaurav Sharma (left) moderates a panel at the Abu Dhabi Infrastructure Summit. © ADIS, June 2025.

Discussing collaboration on infrastructural resilience

Formal proceedings got underway at the Abu Dhabi Infrastructure Summit on Tuesday. The inaugural edition of the event combined a conference programme and exhibition featuring keynotes, panels and roundtables spread over two days.

Maysarah Mahmoud Salim Eid, Director General of Abu Dhabi Projects and Infrastructure Centre (ADPIC) - the mandated agency that manages government capital projects in the Emirate, alongside overseeing infrastructure project implementation and delivery - kicked things off with a keynote emphasising the need for strategic investment in infrastructure, and flagging the drive Abu Dhabi itself has embarked upon with the Emirate’s AED 200 billion (£41 billion, $54 billion) infrastructure pipeline, and 600-plus projects. 

What that level of investment and ambition has done is put Abu Dhabi prominently on the map for global infrastructure collaboration. It also reflects a strategic alignment of regional priorities and international best practices. 

As the Emirate accelerates the adoption of its Economic Vision 2030, cross-sector partnerships will be critical for fostering inclusive growth and address complex urban challenges including sustainable housing and smart mobility. 

Much of this came into sharp focus as the day progressed with plenty of chatter on how the world's major urban centres were approaching the challenge of infrastructural resilience, including via deploying public private partnerships (PPPs) to mixed degrees of success. 

Here's the Oilholic's report for Forbes from the event on the subject. 

For its part, Abu Dhabi’s infrastructure strategy centers on securing supply chains, enhancing climate resilience, establishing conformity standards and quality control, and fortifying digital connectivity, which it appears to be doing perhaps way better than most. 

Yours truly also partook in the first day's proceedings and moderated a session on global collaboration to bring about transformative infrastructural development. 

The panelists included Carlos Wakim, CEO of Bloom Holding, Mounir Haidar, Managing Partner of LEAD Development, Fuat Kasimcan, Secretary General of Turkish Contractors Association, and Abdulaziz Alobaidli, Chief Operating Officer of Masdar. Over the course of an insightful discussion, we discussed how Abu Dhabi was offering several case studies for the world's major cities to take their cue from, and the role, advantages and pitfalls of PPPs in the region, and beyond. 

We also discussed what role technology, especially AI, can play in solutions for smart cities, alongside the criticality of foreign direct investment in infrastructure in multiple geographies to foster collaboration, as well as the need for grid resilience to ensure the power demands of burgeoning urban centres are serviced without outages. All-in-all, a great discussion. 

Once the first day's proceedings had concluded, invited delegates headed over the event's Gala Dinner in the evening, attended by distinguished guests from around the world who were welcomed to the summit, the dinner and indeed to Abu Dhabi once again by ADPIC Director General Maysarah Mahmoud Salim Eid.

The ADPIC DG also commended the strength of the dialogues at the event and the global mix of the attendees on the first day before the evening's entertainment and festivities commenced. 

Well that's all for the moment folks ahead of a content packed second day at ADIS! More musings to follow soon. Keep reading, keep it here, keep it 'crude'! 

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© Gaurav Sharma 2025. Photo I: Abu Dhabi Infrastructure Summit signage © Gaurav Sharma, June 2025. Photo II & III: Energy analyst Gaurav Sharma moderates a panel at the Abu Dhabi Infrastructure Summit. © ADIS, June 2025. Photo IV: Maysarah Mahmoud Salim Eid, Director General of Abu Dhabi Projects and Infrastructure Centre address ADIS gala dinner attendees © Gaurav Sharma, June 2025.