Oil
Drone Attack Boosts Oil Prices but Upside Remains Limited
Ukraine’s drone strikes on Russian pipeline infrastructure, somewhat ironically carrying Kazakh crude oil to the Black Sea, have set a bullish tone for this week as the Monday settlement of ICE Brent climbed back above $75 per barrel. However, there seems to be no upside beyond that as US-Russia negotiations on a potential end to the Ukraine conflict could de-risk Russian supply over the upcoming months.
A Ukrainian drone attack damaged a pumping station on the CPC pipeline that carries Kazakh crude oil through the territory of Russia, with the operator suggesting some 400,000 b/d of production would need to be cut for the next 1-2 months.
According to the Financial Times, Ukraine has rejected a bid by the Trump administration for the US to own 50% of the country’s rare earth minerals, with Kyiv saying any US and European guarantees need to be tied directly to mineral resource deals.
Global equity fund KKR (NYSE:KKR) signed an agreement with Italian oil major ENI (BIT:ENI) to buy an additional 5% stake in the company’s biofuel business Enilive for $615 million, bringing its total stake to 30% in the new venture that’s valued at $13 billion.
Amidst a deepening rift between South Africa and the United States, the South African government announced its plans to add 2.5 GW of nuclear capacity to tackle the country’s electricity outages, leaving the door open for Russian bids.
For the first time since the Houthis’ maritime offensive started in October 2023, a non-Russian LNG carrier braved a Red Sea transit with the unloaded Liberian-flagged Trader III ship moving to Asia after discharging a cargo in Turkey.
Iraq’s Oil Ministry stated that oil exports from Iraqi Kurdistan could resume as soon as next week, but Baghdad’s ongoing $1.5 billion arbitrage with Turkey and Baghdad’s shaky OPEC+ compliance could derail the return of that 300,000 b/d of oil.
Australia’s energy firm Woodside Energy (ASX:WDS) has reportedly held talks with Tokyo Gas, JERA, and Saudi-backed MidOcean Energy to sell 50% of the first phase of its 27.6 mtpa Louisiana LNG project, expected to cost around $16 billion to build.
President Trump’s constructive attitude vis-a-vis Caracas has allowed Venezuelan output to rally, led by Chevron’s (NYSE:CVX) projects as Petropiar is set to reach 143,000 b/d in output this month whilst Petroboscan climbed to 101,000 b/d.
Europe’s ICE gasoil diesel futures hit the steepest backwardation since March 2024, with the M1-M2 spread rising to $14 per metric tonne as the March contract trades around $720/mt, prompted by tight US diesel stocks and cargo divertions there.
The government of Iraq plans to build its first LNG import terminal in Basrah, with a 40km pipeline set to connect it to the country’s power grid, a move prompted by a recent halt in Tehran’s gas deliveries to Iraq amidst higher Iranian domestic demand.
Global trading firm Glencore (LON:GLEN) disclosed that it had rejected an unsolicited approach for its mining operations in the Democratic Republic of Congo at the end of 2024, with rumors suggesting Middle Eastern buyers would be keen to expand there.
Algeria’s hydrocarbon regulator Alnaft has extended the deadline for its 2025 licensing round by three months to 17 June, allegedly to allow companies that expressed interest late to submit their bids with 5 out of 6 offered blocks containing gas discoveries.
Nigeria’s upstream regulator said that oil production losses from theft have plunged to less than 5,000 b/d, a mere fraction of the 150,000 b/d that was siphoned off from producers back in 2018, claiming some 1,861 illegal pipeline connections were removed last year.
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