Oil Daily | Egypt's LNG Demand Surge Amid Global Market Tightening and Pemex's Debt Challenges

【Company News】

Glencore aims to achieve $1 billion in cost savings across its industrial business by 2026. They increased their long-term earnings guidance for the first time since 2017, reflecting growth in metals and energy sectors. The half-year Marketing Adjusted EBIT is expected at $1.35 billion amid a challenging energy market backdrop.

Glencore's copper production decreased by 26% in the first half of 2025, attributed to lower grades at major mines. However, cobalt production rose 19% due to better grades at the Mutanda site in the Democratic Republic of the Congo. The company had abandoned plans to spin off its coal business last year.

Tesla signed a $4.3 billion deal with LG Energy for energy storage batteries to reduce reliance on Chinese batteries amid trade tariffs. LG Energy plans to convert some EV battery plants to energy storage production facilities, with Michigan plant capacity expanding to over 30 GWh next year.

【Global Oil Supply and Demand】

Germany's energy use rose by 2.3% in the first half of 2025, driven by a colder winter. The increase offset a 1.1% drop in full-year 2024, with higher coal and natural gas volumes compensating for reduced wind energy output. Gas and coal power increased amid low wind speeds.

Egypt seeks more LNG purchases due to rising gas demand, having become a net LNG importer in 2024. They plan to secure 290 LNG cargoes and launched a new oil and gas bid round to boost domestic production, potentially tightening the global LNG market.

【Oil-Producing Countries Dynamics】

Mexico issued $12 billion in new debt to support Pemex, the world's most indebted oil company, which showed a profit in the second quarter due to favorable exchange rates. Despite a federal cash infusion, Pemex's working capital remains negative with high debt and stagnant refining output.

Turkey wants Iraq to utilize the oil pipeline to Ceyhan at capacity. They propose expanding the pipeline agreement and including energy cooperation, amid suspended flows due to disputes over Kurdish exports. Negotiations aim to revitalize the pipeline's operation.

【Industry News】

LNG Canada, backed by Shell and other firms, faced technical issues, reducing production capacity. The $40 billion project aims to redirect Canadian gas exports globally, boasting cost advantages over competitors. Its proximity to Asian markets enhances appeal despite current setbacks.

Floating LNG is gaining momentum as global capacity is projected to triple by 2030. Improved utilization rates and project economics make FLNG competitive with traditional terminals. Speed, reduced costs, and flexible deployment drive demand from Egypt, Europe, and Asia.

GAIL India seeks to swap U.S. LNG cargoes with deliveries to India, aiming to buy from Alaska LNG to reduce trade surplus with the U.S. The Alaska project aligns with President Trump’s energy strategy, involving a planned pipeline to support exports and meet in-state demand.

【Latest Oil Policies】

President Trump criticized high UK taxes on North Sea oil, urging lower taxes to incentivize production. The UK recently increased the windfall tax to 38%, driving away operators. Trump advocates removing wind farms to focus on oil and gas production for economic benefits.

【Others】

The Dallas Fed energy survey shows uncertainty among U.S. drillers, with breakeven prices deterring expansion. Active oil rigs fell to 415, indicating Wall Street preference for dividends over growth. The U.S. oil patch may struggle to fill supply gaps without external changes.

U.S. crude oil inventories rose unexpectedly, contrasting with anticipated draws. Strategic Petroleum Reserve levels rebounded slowly but remain below pre-withdrawal levels. Gasoline inventories fell, while distillate and Cushing inventories increased, indicating mixed supply dynamics.