Geopolitics stayed squarely in the spotlight across energy commodities last month. The sudden flare-up between Iran and Israel raised alarms over damage to Iranian oil and gas infrastructure and the potential for shipping bottlenecks out of the Middle East. Offsetting those fears, however, is the likelihood that OPEC+ will unwind voluntary production cuts faster than previously signaled—adding barrels just as the market recalibrates.
Below is an abridged version of our oil, refined-products and natural-gas analysis from StoneX’s 32nd Quarterly Commodities Outlook (July–September 2025). Click the button below to download the full report, which also covers agriculture, energy, metals and FX.
Read the full analysisBrent futures slid 10.7 % in Q2 2025, from USD 74.70 to USD 66.70 /bbl. Tariff headlines out of Washington in April and a strategic shift by OPEC+ kept the market skittish. Prices clawed back ground in May–June on a temporary US-China tariff détente and fresh risk premia tied to Eastern European and Middle-East tensions.
The sharpest rally came in early June as Israel–Iran hostilities intensified—threatening a region that pumps nearly one-quarter of the world’s oil. When the cease-fire landed, risk premia deflated just as quickly. “This quarter’s price action shows how sensitive crude is to geopolitical shocks and to the evolving supply map,” notes Bruno Cordeiro, Market Intelligence Analyst at StoneX.
On supply, OPEC+ has brought forward the rollback of voluntary cuts, pledging a net 70 kbpd increase between May and July. In the US, cheaper crude is chilling drilling—especially in cost-sensitive shale basins—where the active rig count is down 7.4 % since April.
Demand tells a mixed story: flat in the US and China, yet growing solidly in India. We expect a tighter global balance in Q3 as Northern-Hemisphere driving season peaks, but for 2025 overall the market likely swings to surplus on softer consumption growth and rising supply.
ULSD futures at NY Harbor gained 1.1 % in 2025 to USD 2.3458 /gal, buoyed not just by crude fundamentals but by elevated risk premia in the Middle East/Eastern Europe and a thaw in US-China trade relations. The ULSD–WTI crack spread surged 29.8 % YTD on scarce global stocks and a brighter economic outlook. “Lean inventories and trade-policy jitters mean diesel volatility stays high,” Cordeiro adds.
“Robusta harvesting surpassed 88 % by mid-July, offering the physical market a temporary cushion,” notes Fernando Maximiliano, Coffee Market Intelligence Manager at StoneX.
US diesel stocks sit 13.1 % below 2024 levels, squeezed by a domestic demand rebound and brisk exports despite higher refinery runs. Europe faces a similar squeeze—reserves are 7.4 % lower year-on-year amid reduced output. Asia is more balanced (+6.5 % y/y), yet China’s refinery slow-down and India’s expansion are reshuffling regional flows. Looking ahead, India should lead diesel demand growth while China softens as GDP slows and LNG-powered fleets gain ground.
Gasoline is on a parallel track: lofty crack spreads and sub-seasonal stocks (notably in the US) kept prices elevated from March to May, though resurgent US output is now easing inventory stress. We see Northern-Hemisphere driving season pulling stocks tighter in Q3, but macro- and tech-driven efficiencies should cap demand growth.
Natural-gas prices extended their early-year slide through Q2 2025 on muted Northern-Hemisphere demand and aggressive storage refills. Spot disruptions and geopolitical flare-ups gave only fleeting support, especially in LNG. “Even with US oversupply, global LNG remains fiercely contested, adding price volatility,” says Isabela Garcia, Market Intelligence Analyst at StoneX.
US gas output rose almost 3 % between January and May, pushing inventories above 2.7 Tcf by June (EIA). That overhang is capping Henry Hub, though hotter summer weather could lift power burn. Europe, despite a 53 % inventory build since March, is still roughly 25 % below 2024 levels—prompting near-term buying that pits it directly against Asia.
Asian LNG demand is climbing on vigorous economies and high temps, intensifying the cross-basin contest for cargoes. The US remains the world’s swing supplier, averaging 14.2 Bcf/d of exports in H1 and targeting 14.6 Bcf/d for the year—leveraging production growth that handily tops domestic consumption.
Brazilian gas use rose in Q2 as hydro reservoirs dipped and thermal plants ramped to 430 GWh (April–June, ONS). With sub-average rains forecast for winter and power demand edging higher, LNG imports may climb, leaving Brazil more exposed to the global market.
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Oil markets have rapidly repriced away from conflict-driven extremes, but that stability remains dependent on uninterrupted global crude supply. As geopolitical tensions evolve, traders are increasingly weighing whether political developments rather than physical shortages could become the next catalyst for price volatility.
July 2 – All eyes are on the labor market to start the day, with the Friday holiday pushing June’s Non-Farm Payrolls report up to the same day, and release time, as weekly Jobless Claims. It was a very ugly headline print for Non-Farm Payrolls with only 57k jobs added in June, effectively only half of the expected 110k. To make matters worse, both April and May were revised lower by 31k and 43k, respectively, to now show a combined 277k jobs added instead of 351k. Despite this negativity, the unemployment rate dropped to 4.2% from the 4.3% seen from March through May, representing the lowest headline unemployment reading since June of last year. However, the drop was largely a function of a collapsing labor force participation rate, falling 0.3% month-over-month to sit at only 61.5% in June, a low not seen since March 2021 during the pandemic recovery. Average hourly earnings came in as expected, up 0.3% month-on-month and 3.5% year-on-year, as did the average workweek at 34.3 hours.
El Niño remains moderate, but signs of intensification are increasing. The possibility of a very strong El Niño by the end of the year remains in place.
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