Oil Daily | European Oil Demand Rises Amid Gas Price Surge; Russia Misses Output Target

【Global Oil Supply and Demand】

Amidst cold winter conditions and rapidly depleting inventories, Europe’s natural gas prices have soared, making oil a more cost-effective alternative for industrial use. The switch from gas to oil could increase oil demand in Europe and Asia, potentially prompting OPEC to introduce more barrels to the market.

India is preparing to launch new oil and gas licensing rounds to enhance domestic hydrocarbon supply. Energy discussions between India and the U.S. are anticipated, reflecting India's intention to boost domestic oil output and reduce import reliance due to soaring energy import bills.

Russia's crude output fell below its OPEC agreement target, with harsh winters and oil field geology complicating output reduction. Russian refineries aim to increase fuel exports, but U.S. sanctions have impacted Russian oil trade, prompting a shift to more processing within Russia.

【Oil-Producing Countries Dynamics】

Refiners on the Gulf Coast are rejecting Mexican crude due to excessive water content, instead opting for Colombian and Canadian sources. Concerns over Mexico's crude arise as financial struggles at Pemex continue, impacting crude quality and causing a drop in exports.

The Dangote refinery in Nigeria, Africa’s largest, may reach full capacity next month. This facility could transform Nigeria from a gasoline importer to exporter, impacting fuel markets, especially in Europe, despite initial crude supply issues.

【Latest Oil Policies】

Australia plans tax breaks for green hydrogen and critical mineral producers to stimulate industry growth. The initiative signals Australia's commitment to developing a critical minerals network and transitioning to a renewable energy superpower.

The U.S. has reinstated a "maximum pressure" campaign on Iran, attempting to halt its oil exports. However, Iran’s Oil Minister Mohsen Paknejad asserts that such sanctions will fail to reduce Iran's oil exports to zero, as Iran seeks innovative ways to bypass them.

【Industry News】

China is set to list its first overseas sovereign green bond in London, highlighting its role in the global energy transition. The listing aims to boost the green finance market, testing investor interest in supporting the world’s leading polluter in climate initiatives.

【Company News】

GAIL India is reviving its plans to procure U.S. LNG supply through potential investments in American export projects. The decision follows the lifting of a U.S. LNG permitting pause, aligning with India's increasing natural gas demand due to economic growth and energy transition goals.

【Others】

Oil prices rose despite global trade war fears after U.S. President Trump announced tariffs on steel and aluminium imports, potentially affecting market risk appetite. Canada's energy exports to the U.S. increased, boosting its trade surplus, as traders preemptively stockpile ahead of tariff implementations.