Oil
Trump’s Iran rhetoric impacts on global oil markets as brent sells for $103 per barrel
Following the crude markets is gradually becoming an extreme sport rather than a financial hobby, with US President Trump unleashing a flurry of contradictory messages this week. Is the US holding talks with Iran? Trump says the talks are constructive, Iran says there were none. Can the US reopen the Strait of Hormuz? One day, Trump states he would obliterate Iran if it doesn’t, the next day, the President claims he and the ayatollah will share control over it. In an atmosphere of absolute madness, ICE Brent remains in triple digits, climbing to $103 per barrel today after the military side of the Iran-Israel conflict keeps on escalating, OilPrice.com reports.
Having halted its Ras Laffan LNG liquefaction plant in the first days of the war on March 2, QatarEnergy has now officially declared force majeure on its term contracts with South Korea, China, Italy and Belgium, citing significant damage to the plant.
According to top Iranian officials, Tehran is now charging vessel operators $2 million to transit the Strait of Hormuz, citing the ‘cost of war’, saying that for vessels from non-enemy combatant countries the waterway is open if they make the right arrangements.
Loadings at Russia’s main Baltic Sea export terminal of Primorsk, supplying some 930,000 b/d of crude last year to global markets, were halted for a day after a Ukrainian drone attack, with media reporting on a fuel tank catching fire on Monday.
The International Energy Agency is consulting with member nations on further releases of strategic petroleum reserves, over and above the 400 million barrels agreed on March 11, citing a longer-than-assumed recovery for damaged upstream assets.
The speaker of the Iranian parliament, Mohammad-Bagher Ghalibaf, said that Iran’s oil stored on water, believed to be around 30 million barrels before the US lifted sanctions on them, were now completely sold out and NIOC had no more oil to offer.
Simultaneously to Tehran’s claims of having no more oil left, India’s largest private refiner, Reliance Industries, reportedly bought 5 million barrels of Iranian crude within days of the US Treasury Department’s sanctions waiver, at a $7 per barrel premium to Brent.
Libya’s National Oil Corporation was forced to completely halt its 90,000 b/d El Feel field that is normally sent into its Sharara export stream, after a fire caused by a leak on the two fields’ connecting pipeline made transportation impossible for at least a week.
The United Arab Emirates resumed operations at the Habshan facility, the country’s largest gas processing plant with a total capacity of 6.1 bcf/day, following an Iranian drone attack last week, whilst minimizing LNG production in the country.
According to Bloomberg, Germany’s Ministry of Economy is pushing the country’s gas companies to secure more LNG contracts to deal with the ramifications of the US-Iran war, eyeing new regions as the US accounts for 94% of Berlin’s LNG imports.
Europe’s EV sales have recovered from a prolonged winter slump in February, spearheaded by a 27% year-over-year jump in Germany after Berlin announced a new €3 billion subsidy scheme, also available for customers that seek to buy cheaper Chinese EVs.
The Israeli strike on gas facilities of the South Pars field in Iran that damaged key energy infrastructure in the Middle Eastern country has led to a halt in natural gas exports to Turkey, with Iranian flows accounting for 13% (or 7 bcm) of Turkey’s gas imports.
US downstream giant Valero Energy (NYSE:VLO) has shut its 380,000 b/d refinery in Port Arthur, Texas, following an explosion and massive fire at the plant’s diesel hydrotreater unit, suggesting diesel production in PADD 3 could take a sizeable hit.
Philippine President Ferdinand Marcos Jr declared a national energy emergency in the Philippines as the country had only 45 days of refined product supply based on current consumption levels, aggravated by China’s ban on exports of fuels abroad.
The European Commission postponed a vote on a previously submitted proposal to permanently ban Russian oil imports on April 15, citing ‘current geopolitical developments’, as Brussels wants to legislate a phase-out of Russian crude by end-2027.
According to ship trackers, Saudi national oil company Saudi Aramco (TADAWUL:2222) ramped up crude exports from its Red Sea port of Yanbu to almost 4 million b/d last week, up 50% compared to the pace of loadings in the first half of March.
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