China was making the oil market news again over the course of the week, as analysts debated the effect on the country’s oil demand of the government’s decision – after years of pressure – to revalue its currency, dropping the dollar peg in favour of a basket of currencies. ‘Traders are worried that China’s appetite for commodities may increase due to a stronger Chinese currency,’ said one analyst. Others suggest that the change could in fact weaken the competitiveness of the Chinese economy and thus tame its appetite for crude.

On the supplier side, it was Tehran that was making the news. Oil Minister Bijan Namdar Zanganeh, speaking in late July, announced that production capacity would be raised to 4.2 million barrels a day (b/d) by early August as production from three new oil fields was brought on stream. On the other hand, he said that field depletion was cutting national output by 300,000-400,000 b/d each year. Commenting on the global market situation, hawkish traditions continued, as Zanganeh maintained that the market was adequately supplied and that there was no need for OPEC to raise production by the proposed 500,000 b/d ahead of its next meeting in September. As Iran increasingly looks to gas rather than oil for hydrocarbons income, the government on 24 July was offered two proposed routes – both bypassing Russia – for a gas pipeline to Ukraine.