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IRAN LAUNCHES STRIKES ON ISRAEL - TRUMP URGES RESTRAINT
U.S./IRAN - PROGRESS REMAINS ELUSIVE
ISRAEL/LEBANON ESCALATES FURTHER
ANOTHER SYMBOLIC OPEC+ QUOTA RAISE
KHARG LOADINGS TENTATIVELY RETURN — BUT PRODUCTION DIPS
OTHER NOTABLE DEVELOPMENTS - Russia/Ukraine, UK/France mine mission, frozen assets, Dangote saving Europe
/summary
IRAN LAUNCHES STRIKES ON ISRAEL - TRUMP URGES RESTRAINT
After Israeli strikes hit the southern suburbs of Beirut on Sunday, Iran launched a wave of rockets at Israel on Sunday night, citing crossed "red lines" and previous warnings that exactly this kind of escalation would trigger a response. This is the first major breakdown of the ceasefire after numerous more limited infractions. The Israeli army says all missiles were intercepted.
Trump tells Barak Ravid of Axios he is phoning Netanyahu to tell him not to attack Iran in response.
Early response from Trump suggests he is going to let the attack slide. He told Fox - "We're very close. I would say an agreement would be signed on Monday, Tuesday or Wednesday of this coming week. And now this takes place," Trump added before suggesting to Iran, "You've shot your missiles, that's enough. Get back to the table and make a deal."
“Tonight’s operation was a warning,” the IRGC said in its statement, adding that, “if aggressions are repeated, the responses will be broader”
An IDF spokesperson said after the Iranian attack that it will continue to operate in Lebanon.
Context: The fragile ceasefire that Washington has spent weeks trying to convert into a permanent deal risks falling apart but Trump looks intent on keeping it alive. The ceasefire has survived intermittent skirmishes, but an Iranian missile barrage on Israel is a different category of event. Now we see what sort of control Trump has over the situation. Previously, he has reigned in Netanyahu from escalations in such events following “Operation Midnight Hammer” last year. So far, Israel says it will continue operations in Lebanon but nothing on Iran retaliations at 9.30pm London time.
🛢 Oil Sentiment: Big risk on for oil as it potentially derails the so far largely successful ceasefire. As it stands, it would seem Iran has stopped from further attacks and Trump will press Israel to avoid a retaliation. The front in Lebanon is now under serious pressure to unwind while the IDF says it will continue - risking more Iran confrontations.
🇺🇸 🇮🇷 U.S./IRAN - PROGRESS REMAINS ELUSIVE
The fragile ceasefire between the U.S. and Iran continued to fray this weekend (Kuwait/Bahrain), with both sides exchanging fresh strikes in what has been the most volatile week since hostilities nominally paused.
The diplomatic picture remains similarly murky. In his NBC Meet the Press interview, Trump insisted a deal is close (backed up in the latest Fox comments) while hardening his nuclear language - demanding Iran be barred not just from developing but from buying or acquiring nuclear weapons. He also ruled out any immediate unfreezing of Iranian assets, saying relief only comes "after" Iran demonstrates good behaviour. Iran's Foreign Ministry spokesman pushed back sharply, telling CNN the core problem is the U.S.'s "contradictory remarks" and shifting goalposts, and reiterating that Iran's right to peaceful enrichment and access to its frozen assets are non-negotiable.
Context: Both sides remain distant as far as peace talk progress is concerned (despite the latest Trump claims its days away). The ceasefire between the two remains intact but Hormuz is no closer to opening and now Israel and Iran are in direct confrontation. Trump’s latest NBC interview reiterates similar talking points to recent weeks - essentially claiming a deal is close while threatening military action that he is clearly reluctant to back up.
🛢 Oil Sentiment: Bullish picture remains firmly in play as MoU optimism continues to fade and Hormuz remains a key sticking point Iran is unwilling to yield upon. Trump attempting to say a deal will happen in days. Iran remains intent on weathering the U.S. blockade while the U.S. is unwilling to militarily escalate - stalemate remains - prompting further draws on global stocks towards even more critical levels. The Iran strikes on Israel now cloud the ceasefire.
Why oil is not higher (also future risk areas): Record US exports, sharp/unexpected drop in Chinese demand, pre-war surplus (along with eased sanctions allowing them to land from floating) + SPR releases, Gulf producers rerouting some supply. Traders going long also risk peace related headlines stopping out positions - countering the physical reality that remains.
🇮🇱 🇮🇷 ISRAEL/LEBANON ESCALATES FURTHER
Israel struck Beirut on Sunday in a significant escalation, hitting the Lebanese capital despite reporting that Trump had privately urged Netanyahu to avoid major raids as part of broader U.S. efforts towards Middle East peace. This has then developed into a retaliatory strike by Iran on Sunday evening.
The escalation carries direct implications for the Iran negotiations. Iran's top nuclear negotiator and Parliament Speaker Ghalibaf claimed the Beirut strikes as justification for hardening Tehran's posture, posting on X that U.S. bases and Israeli assets in the region are now "legitimate targets" given Washington's naval blockade and what he called its green light for Israeli action in Lebanon. He posted this prior to Sunday’s strikes by Iran on Israel.
Context: Tehran has insisted that Israel must withdraw from Lebanon and cease its assaults on Hezbollah and Beirut as a condition to bringing the wider regional war to an end. Beirut marks another significant infraction outside of the ‘yellow line’ that continues to expand. Gaza also remains a redline for Iran where military action is also expanding. Iran’s response on Sunday shows its clearly unwilling to cast a blind eye to these events anymore. The IDF says Lebanon operations will continue.
This also further highlights the lack of cohesion between Trump and Netanyahu. It’s not clear whether the U.S. gave the greenlight for attacks in Beirut that could further strain U.S./Isreal relations and result in a ceasefire breakdown. He claims he was not happy about them.
When Trump was pressed by NBC if he disagrees with Israel’s continued bombing of Lebanon, he would like to see a more “surgical attack on Hezbollah.” This was prior to the Iran escalations.
🛢 Oil sentiment: The situation remains a key bullish risk for oil. It risks any chance of an already distant U.S./Iran peace deal and further highlights a lack of cohesion between Trump and Netanyahu. Israel/Lebanon escalation headlines did prove supportive for oil last week and the situation is only getting worse following Iran strikes on Israel. Remains at serious risk if Isreal maintains Lebanon operations - which it says it will.
📊 ANOTHER SYMBOLIC OPEC+ QUOTA RAISE
Seven OPEC+ members - Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria and Oman - agreed Sunday to raise collective output targets by 188,000 barrels per day for July, marking the fourth consecutive monthly increase. The move follows the same pattern as prior months: a modest paper adjustment that does little to address the actual supply gap created by the Hormuz crisis.
Context: Little impact while Hormuz remains closed for Middle East nations (this negates any quota increase for Iraq, Kuwait and Saudi). For Russia, ongoing Ukrainian drone strikes on ports, pipelines, and refineries have left it producing over 700 kb/d below its current OPEC+ quota (~9.76 mmbpd in June 2026). Until infrastructure damage is resolved and exports stabilized, proving full wellhead capacity for it will be difficult. Overall, more a signal of OPEC+ unity than a dramatic change.
🛢 Oil sentiment: Little to no near term impact due to reasons in the context section.
