Oil
Prospect of Rising Supply Puts Oil Prices Under Pressure
Following extremely rangebound trading throughout most of mid-February, oil prices are set to post their largest weekly loss in three weeks, with the potential resumption of Iraqi exports from Ceyhan and Trump’s diplomatic efforts on the Russia-Ukraine track tilting sentiment towards bearishness. Concurrently, the US president has also signalled tighter supply from Venezuela, but with ICE Brent futures dropping to $73 per barrel, the oil markets seem to be downplaying any potential short-term supply disruptions.
US President Donald Trump announced he would revoke the 2022 Venezuela sanctions waiver from March 1 onwards, giving the US major Chevron (NYSE:CVX) a six-month wind down period to halt operations in the country that made up 10% of its production last year.
China’s Commerce Ministry urged the United States to halt its investigation on new tariffs on US copper imports, with Donald Trump using the Trade Expansion Act of 1962 that he did in his first term, pledging to retaliate if Chinese entities get affected by the levies.
In its much-anticipated investor day, UK oil major BP (NYSE:BP) pledged to increase annual oil and gas spending to 10 billion, cut investment into renewables from $5 billion to $1.5-2 billion per year and carry out divestments worth $20 billion by 2027.
Italian oil major ENI (BIT:ENI) and Malaysia’s state oil company Petronas agreed to create a joint venture that would combine some of their upstream assets in Malaysia and Indonesia, with the new entity set to boast some 3 billion boe of reserves.
Indonesia has arrested four top executives at state oil firm Pertamina over alleged corruption in crude and oil product imports, with the country’s attorney general claiming that the alleged offenses between 2018 and 2023 cost the nation some $12 billion.
Algeria’s state energy firm Sonatrach and China’s state-controlled major Sinopec (SHA:600028) signed an exploration pact worth $850 million to develop the Hassi Berkane play, even before US oil majors Chevron and ExxonMobil got their respective blocks.
The US has suspended sanctions for 30 days on Serbia’s national oil company NIS, majority-owned by Russian companies and providing fuel for the entirety of Serbian territory, as the largest stakeholder Gazprom Neft transferred a 5% stake to Gazprom this week.
ADNOC, the national oil company of the UAE, has signed a 15-year term supply agreement with one of Japan’s largest gas buyers Osaka Gas (TYO:9532) to deliver up to 0.8 million tonnes LNG per year starting from 2028, its fourth sales agreement for the Ruwais LNG project.
Russia and Myanmar have agreed to build a refinery in the South Asian country that currently has zero refining capacity, eyeing the Dawei special economic zone for it with further plans to build a port and a coal-fired thermal power plant there.
Ukraine’s President Zelensky is set to sign a comprehensive critical minerals deal with US President Trump this Friday, committing Kyiv to pay $500 billion from resource extraction as a repayment for past and future aid provisions, without security guarantees.
According to the IAEA, Tehran’s stockpile of enriched uranium surged more than 50% over the past three months to 839,200 kg as Iran prepares for Trump sanctions, driven by an alleged sevenfold increase in enrichment activities since December.
Brazil’s national oil company Petrobras (NYSE:PBR) surprised the oil markets with a bumper $2.9 billion net loss in Q4 2024, citing currency devaluation as the main factor behind the one-off slump as the Brazilian real was the worst-performing major currency last year.
The benchmark May iron ore futures traded on China’s Dalian exchange fell to ¥805 per metric tonne ($110/mt) this week after Asian countries followed Trump’s lead, with Vietnam slapping anti-dumping levies on Chinese steel with South Korea going for a 38% tariff rate.
The Iraqi government is set to announce the resumption of oil exports from the breakaway region of Kurdistan over the upcoming days, initially starting off with some 185,000 b/d to be marketed by state oil firm SOMO and gradually increasing the volumes over time.
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