The combination of limited new supply options, increasing risks to traditional supply, and growing demand round the world, is about to send oil prices even higher this summer.
Oil prices are edging higher in the week as improving demand signals highlight the shortage of supply options in oil markets if there's a drastic contraction in Russian production, a probable outcome if the ecu Union bans Russian oil. With both US crude and gasoline inventories continuing their decline, whilst recent altercations between the us and Iran have rendered any JCPOA breakthrough largely impossible, analysts are anticipating another surge towards the $130-140 per barrel range this summer.
EU Pins Hopes for Next Week Summit on Russian Sanctions. the EU hopes to achieve a deal on Russian oil sanctions at next week’s leader summit on May 30-31, with media reports suggesting Brussels will split the embargo into pipeline and seaborne deliveries, allowing more phasing-out time for the previous.
US Seizes Two Allegedly Iranian Cargoes within the Mediterranean. The US-Iran antagonism is about to extend further after US authorities seized two laden oil tankers within the Mediterranean, anchored in Croatia’s and Greece’s body of water, for allegedly smuggling oil for Iran’s Revolutionary Guard Corps.
G7 Vows to Quit Coal, Fails to mend Deadline. Ministers from the Group of Seven (G7) agreed to figure to end coal-powered energy, though the commitment was tangibly watered down from the initial draft of the communique because the 2030 deadline of ending “unabated” coal power failed to make it in.
UK Slaps Windfall Tax on North Sea Producers. the united kingdom government will impose a 25% windfall tax on profits of oil and gas companies until the top of 2025 at the most recent, stating that the surcharge could be removed when prices return to “historically more normal levels”, without specifying what they're.
Kurdish Minister Departure Bad Omen for Erbil. The natural resources minister of geographic area Kamal al-Atroshi stepped down because of poor health, a nasty sign for Erbil because the federal authorities in Baghdad have intensified pressure on the breakaway region to bring its operations in restraint.
US Refinery Capacity Lags Behind Production Rise. US refinery intake surpassed the 16 million b/d mark for the primary time since August 2021 and products cracks remain at record levels. US refinery expansions will only total 350,000 b/d by end-2023, leaving most of the 1 million b/d capacity that close up after the pandemic unsubstituted.
Nigeria Might Soon air the Brink. Whilst Davos talks usually concentrate on grand strategy, Nigeria’s minister Zainab Ahmed stated that the country’s production is so low (at 1.5 million b/d in Q1) that it's barely ready to cover the value of imported petrol, blaming the shortfalls on theft and infrastructure attacks.
Amidst Record Prices, The Taliban Becomes a Coal Exporter. The Afghan Taliban has been stepping up coal exports to Pakistan, presumably up to 500,000 tons per month Reuters reports, as runaway coal prices in Asia are forcing buyers to seek out creative ways of sourcing cheap feedstock for power generation.
India is keen to Mop Up Russian Assets. in line with media reports, a consortium of Indian energy companies including ONGC Videsh and Gail is in talks to shop for the 27.5% stake of UK energy major Shell (LON:SHEL) within the Sakhalin-2 LNG project in Russia’s Far East, most likely at a fraction of its pre-war price.
US Senate Discontent Lowers Odds of Swift Iranian Deal. The likelihood of seeing the JCPOA resurrected continues to ebb as this week’s senate Foreign Relations Committee pressed Iran negotiators to run faraway from the stalled Vienna talks, a possible point for the Biden Administration sooner than the mid-term elections.
Russia and Iran Discuss Commodity Barter Deals. Russian and Iranian top officials have discussed swapping deliveries of oil and gas, with Russia going to supply energy to northern Iran whilst Teheran would offer Russian companies with oil and gas cargoes within the Persian Gulf.
Italy Doubles Down on Algeria. the most important foreign player in Algeria ever since its 1981 arrival, Italy’s ENI (NYSE:E), signed another set of deals that may increase its gas portfolio within the country, starting from a green hydrogen plant within the Sahara all the thanks to becoming a part of gas projects' evaluation team alongside Sonatrach.
US Natgas Drops Back After Low Stocks Trigger Spike. Whilst front-month US Henry Hub futures rose to a 13-year high earlier in the week on low inventories, with intraday trading going as high as $9.399 per mmBtu, that strength has eased by now with the expiry of the June contract and forecasts for lower demand.
India Feels the warmth of Coal Crunch. With India’s power ministry lowering the quantity of coal that domestic power plants can expect to receive in June by 11% to 56 million tons, importing more coal despite Newcastle spot prices trading above $400 per metric weight unit seems the sole solution of the continuing crunch.
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