Oil Daily | China's Refinery Rebound Supports Prices Amid Trump Tariff Threats on Russian Oil

【Global Oil Supply and Demand】

Strong seasonal demand and a rebound in China's refinery throughput in June are supporting oil prices, counterbalancing concerns related to President Trump's tariff threats affecting the global economy. Near-term fundamentals appear supportive as OPEC is adding fewer barrels, and demand remains robust during the peak summer travel season.

The world requires $18.2 trillion in oil and gas investments by 2050 to ensure energy supply, according to OPEC Secretary General Haitham Al Ghais. Oil demand is projected to rise to 123 million barrels per day by 2050, with oil still accounting for 30% of the global energy mix. OPEC continues advocating for increased investments, emphasizing that there is no peak oil demand on the horizon.

Surging domestic coal production and reduced demand led to China's lowest coal import volumes in June for nearly two and a half years. Imports fell 26% year-on-year and 8% from May, reflecting lower demand amid a property crisis and increased domestic production. Full-year 2025 coal imports are expected to drop significantly compared to 2024.

【Oil-Producing Countries Dynamics】

President Trump's threat to sanction Russian oil supply in 50 days if Putin resists a Ukraine peace deal eased concerns about an immediate impact on Moscow's exports. ING analysts doubt Trump will follow through with the 100% tariff threat, which could create a large global market deficit and conflict with Trump's goal of low oil prices.

【Latest Oil Policies】

U.S. President Trump is set to announce a $70-billion investment package to boost energy and data infrastructure, prioritizing regions with power congestion due to rising AI workloads. The plan may redirect investment toward fossil fuel and nuclear generation, potentially reducing support for renewable energy.

Indonesia has shown willingness to buy U.S. oil and products if tariffs on Indonesian goods are lowered, but could scrap energy imports from the U.S. if no agreement is reached. The U.S. had initially announced a 32% tariff on Indonesian goods, which has been delayed amid ongoing trade talks.

【Industry News】

Venture Global has begun LNG production from Phase 2 of its Plaquemines export terminal in Louisiana, prioritizing spot market profits over long-term deliveries. The strategy has drawn criticism as European majors accuse the company of exploiting commissioning status to delay contractual obligations.

【Company News】

ConocoPhillips has applied to federal regulators for approval to drill new exploratory wells and conduct seismic testing in Alaska's National Petroleum Reserve. This plan aims to extend the company's Arctic exploration, supported by the Trump administration's promotion of domestic energy production. However, environmental reviews and federal agency permits are still required.

Occidental Petroleum anticipates lower-than-expected oil and gas production in the Gulf of Mexico due to third-party constraints and maintenance, with reduced sales volumes for the second quarter. Despite these setbacks, Occidental expects total company production to remain within its guidance range for 2025.

A U.S. judge temporarily delayed Argentina's court-ordered transfer of a controlling stake in YPF, allowing Argentina three extra days to seek relief from a $16.1 billion judgment. The legal case arises from Argentina's 2012 expropriation of YPF shares without a mandatory tender offer, impacting Argentina's economic and energy ambitions.

【Others】

The U.S. Department of Energy authorized the exchange of up to 1 million barrels from the Strategic Petroleum Reserve to ease crude shortages at Exxon's Baton Rouge refinery. This exchange helps maintain regional fuel supplies while addressing logistical challenges due to Mars crude quality issues.