ULSD Market – Post‑OPEC+ | 7–11 July 2025
From our company archive. Market commentary reflects its original publication date.
ULSD Market – Post‑OPEC+ | 7–11 July 2025
What was evident this past week is when OPEC+ speaks, diesel markets listen. After the July 5 OPEC+ meeting, which confirmed a hefty 548,000 bpd production increase for August—the largest monthly rise yet—the diesel markets paused to absorb the implications. While the decision signals an aggressive strategy to reclaim market share, it’s the backdrop against which global demand, refining activity, and geopolitical uncertainties that are now playing out.
On July 5, eight key OPEC+ members, including Saudi Arabia and Russia, convened and agreed to implement the largest monthly supply boost since the policy shift in April. The official statement reaffirmed a gradual unwind of the 2.2 million bpd cuts; August’s increase alone covers roughly 80% of that total (Reuters).
Spot ULSD showed mild resilience—rising, but far from spiking. July futures stayed elevated.
Thanks to seasonal demand and downstream refinery operations, refiners still enjoy strong margins—even as diesel inventories tighten
Middle East shipping tensions and Red Sea risks are still simmering—keeping risk premia in play .
NB: Abundant crude ≠ loose diesel market — unless refining output outpaces demand. The real test comes with actual barrels hitting markets in August.
Northern Hemisphere summer travel may absorb much of this extra supply, at least short-term so we are not out of the woods as yet.
What next:
August 3: Next OPEC+ meeting to decide September quotas—likely another 550 kbd increase (Reuters).
Mid‑July: EIA inventory update—crucial for gauging whether diesel physical tightness persists.
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