Oil
Brent surges past $110 on Iran rejection, Nigeria strives to produce more
The closure of the Hormuz Strait against Donald Trump’s hopes for constructive negotiations, such is the main price-defining relationship this week for oil markets.
In a somewhat peculiar fashion, prices reacted immediately to Trump’s first 5-day deadline extension, however today’s 10-day postponement triggered a spike that sent ICE Brent above $110 per barrel again as Nigeria strived to produce more.
With Iran formally rejecting Trump’s 15-point plan for peace and submitting its own list of demands, the immediate outlook for oil is ‘higher for longer’, OilPrice.com reports.
US President Donald Trump extended his deadline for Iran to reopen the Strait of Hormuz for another 10 days until April 6, claiming that negotiations with Tehran were going ‘very well’ even though Iran rejected his 15-point proposal to end the ongoing US-Iran war.
Russian oil producers could declare force majeure on deliveries from Baltic Sea ports after an array of Ukrainian drone strikes damaged the Ust-Luga and Primorsk export terminals, temporarily halting some 40% of Russia’s seaborne crude outflows.
Iraqi oil production has slumped almost 80% since the beginning of the US-Iran conflict with storage capacity reaching tank-tops, with output from the country’s southern oilfields plunging to just 800,000 b/d, taking the country’s total offline capacity to 3.5 million b/d.
According to media reports, the Indian and Russian governments are in advanced talks to restart Russian LNG exports to India amidst a worsening gas crisis in the South Asian nation, with the last Russian delivery to India’s Dahej taking place in April 2024.
India’s largest private refiner Reliance Industries denied purchasing any Iranian crude, publicly refuting a Reuters report earlier this week that had claimed that India’s top buyer resumed purchases of Iranian oil after it bought its last cargo in April 2019.
London-based energy major Shell (LON:SHEL) has confirmed that its 140,000 b/d Pearl gas-to-liquids facility in Qatar, attacked on March 19 by Iranian drones, suffered extensive damage and the 70,000 b/d capacity Train 2 would take a year to repair.
A marine drone struck a Turkish-owned tanker Altura, some 18 nautical miles away from the Bosphorus Strait, marking the third incident when Ukraine struck a Russian cargo in Turkish territorial waters, pushing insurance rates in the region even higher.
Chinese sulphur prices have soared above $600 per metric tonne, almost tripling year-over-year, boosting the country’s refinery margins by an additional 10% as importers in China double down on sour grades (such as Canada’s TMX) to maximize sulphur output.
US refining giant Valero Energy (NYSE:VLO) restarted the 380,000 b/d Port Arthur refinery in Texas, keeping the 47,000 b/d hydrotreater unit that was extensively damaged in this week’s explosion offline and only running the lower-capacity distillation column.
Japan will allow more use of coal in its power generation in an effort to boost security of supply as LNG prices, normally accounting for 30% of the country’s electricity output, doubled over the past months and push feedstock costs higher.
China’s imports of liquefied natural gas are set to post the lowest monthly reading since 2018 this month, marking a 25% plunge year-over-year with inflows coming in below 3.7 million tonnes, as the loss of Qatari LNG supplies and high prices dampen buying interest.
Nigeria’s upstream regulator NUPRC has slashed the time it takes to approve applications for the revival of idled oil wells, reportedly rubberstamping requests in hours to ensure maximum production domestically as oil prices remain above $100 per barrel.
The Indonesian government is considering easing production quotas for nickel and coal, being the world’s largest exporter in both, provided that prices remain high, following an unprecedented 20% cut to 2026 output quotas amidst fears of oversupply.
South Korea introduced export controls on naphtha exports from March 27, designating the light distillate as a supply-crisis supply item, seeking to shield the country’s petrochemical industry from feedstock shocks as it was 70% reliant on the Middle East for its imports.
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