Oil
Trump Calms Oil Markets as Hormuz Crisis Persists
Oil markets have shown their optimistic side this week, hoping that US President Trump would call of his war soon as the Strait of Hormuz remains blocked and panic-buying is taking over many commodity markets that depend on the Middle East. For the time being, Trump’s market placation has succeeded in lowering oil prices, with ICE Brent falling back to $92 per barrel after a Monday rally that almost reached $120 per barrel, OilPrice.com reports.
Seeking to calm down soaring oil prices, G7 finance ministers discussed a possible joint release of strategic petroleum reserves, up to potentially 400 million barrels. The IEA-coordinated event ended with its members deciding against it.
Saudi national oil firm Saudi Aramco (TADAWUL:2222) has reportedly started cutting crude oil production at two of its giant oilfields, even though it is trying to maximize the re-routing of its flows from the Gulf to the Red Sea via the East-West pipeline.
Greece’s Dynacom shipping company is gradually becoming the daredevil of the shipping industry, with its Shenlong tanker becoming the first non-Iranian crude oil carrier to pass through the Strait of Hormuz since Iran initiated its blockade on March 1.
India, a country with notoriously low strategic oil inventories as its three SPR sites currently hold only 30 million barrels of crude, will not join the IEA’s initiative to release strategic stocks and will seek to maximize short-haul Russian imports instead.
Russia’s main Black Sea port of Novorossiysk has resumed loadings this week, following a week-long halt caused by Ukraine’s drone attacks and stormy weather that slashed oil exports to just 250,000 b/d, bringing some relief to tight oil markets.
Bahrain’s national oil company Bapco Energies declared force majeure on all of its group operations after Iranian drones targeted its 405,000 b/d Sitra refinery again, marking the second Middle Eastern refinery to be shut after critical drone damage.
US oil major ExxonMobil (NYSE:XOM) is seeking to relinquish its corporate registration in New Jersey and reincorporate in Texas, where the firm’s headquarters are located, in a move that is poised to mitigate risks from activist investors and climate advocates.
The government of South Korea implemented a price cap on domestic gasoline and diesel prices, following a sharp jump to $1.30/litre in the price of both last week, with Seoul stepping up inspections and audits to detect potential price collusion.
A cargo of Venezuelan crude, loaded on the Poliegos tanker and presumably shipped by global trading house Vitol, left Israel’s 197,000 b/d Haifa refinery without unloading and sailed to Greece instead, presumably due to damage to the plant.
According to China’s General Administration of Customs, the country’s crude oil imports jumped a hefty 16% year-over-year to average 11.99 million b/d in January-February, suggesting Chinese refiners continued to build stocks they can now benefit from.
India’s oil companies are hiking LPG cylinder prices after a year of keeping prices unchanged, with 14 kg cylinders now going for $10 per unit as the country is facing a severe shortage of cooking gas as 90% of its supply routinely comes from the Middle East.
Mongolia is trying to renegotiate the commercial terms of Rio Tinto’s (NYSE:RIO) $18 billion Oyu Tolgoi copper mine, calling them ‘unfair’ as the floating interest rate on the multibillion-dollar loan that Rio offered to Mongolia is now over 11%.
The largest oil refinery in the Middle East, ADNOC’s 922,000 b/d Ruwais plant, halted operations after a drone strike caused a fire, making it the heretofore largest victim of downstream warfare after Saudi Arabia’s Ras Tanura and Bahrain’s Sitra.
Mining giant Glencore (LON:GLEN) is reportedly considering a secondary listing in Australia if it proves to be beneficial to the company, reacting to the recent collapse of its $200 billion merger talks with Rio Tinto as an ASX listing could attract more investors.
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