Oil Daily | Kazakhstan's Oil Output Surpasses OPEC Quota Amid U.S. Inventory Rise and Sanction Waivers

【Company News】

Centrica plans to sell a significant stake in the Cygnus gas field to Ithaca Energy for £215m. This aligns with its strategy to maximize value from Spirit Energy's reserves and focus on delivering a major carbon storage project. Cygnus is a major UK gas field supplying about 6% of national demand.

【Oil-Producing Countries Dynamics】

Pertamina is importing Russian crude oil in compliance with Western sanctions, allowing imports below a $60 price cap. Ukraine is urging the G7 to lower the cap further to $30 to pressure Russia financially. This request follows EU and UK sanctions targeting Russian oil-related entities.

Brazil's Petrobras plans to begin drilling in the Foz de Amazonas Basin, pending environmental approvals. The basin is believed to contain significant oil and gas reserves. Petrobras' approval may encourage more bids for exploration blocks in upcoming tenders.

Kazakhstan's oil production rose, surpassing its OPEC quota, with an average of 1.86 million bpd in May. The increase challenges OPEC obligations but promises compensatory production cuts by 2026. Kazakhstan's revenues are down due to lower oil prices despite high output.

【Latest Oil Policies】

The U.S. government extended Chevron's sanction waiver for Venezuelan operations by 60 days, allowing continued oil production and exports. This move follows earlier sanctions and negotiations with Venezuela. Chevron aims to increase exports if agreements progress.

Saudi Arabia aims for long-term oil market stability, ready for multiple scenarios with fiscal buffers. Recent OPEC policies indicate a willingness to endure lower prices to manage overproduction and address global economic uncertainties affecting oil demand.

【Industry News】

OPEC remains optimistic about global oil demand, expecting growth despite economic risks. Forecasts predict a demand increase of 1.3 million bpd in 2025 and 2026. Lower upstream spending could slow non-OPEC supply growth. U.S. production expansion is expected to decline.

The American Petroleum Institute reported a rise in U.S. crude oil inventories, with a 2.499 million barrel increase against expectations. Gasoline and distillate inventories fell, contributing to supply challenges amid existing inventory deficits. Strategic Petroleum Reserve levels are rising.

【Others】

Woodside Energy projects a 50% jump in global natural gas demand by 2030. It expects long-term LNG supply contracts due to affordable, reliable energy needs. Woodside is expanding projects in the U.S. and Australia, progressing towards future LNG production.

Chinese imports of Russian crude fell 13% in April, while imports from Malaysia, linked to Iranian oil trans-shipments, surged. This reflects Chinese refiners stockpiling cheaper crude amid potential supply disruptions. Uncertainty drives aggressive import strategies by Chinese refineries.