Oil Daily | OPEC Production Drops Amid Strategic Uncertainties; Venezuela Faces Economic Challenges

【Latest Oil Policies】

The U.S. Justice Department is suing New York, Vermont, Michigan, and Hawaii over state climate laws, arguing they are unconstitutional and preempted by federal law. These lawsuits follow President Trump's directive to curb state actions that burden domestic energy development, citing national security concerns.

California's planned 2035 gas car ban faces disruption after the U.S. House voted to revoke the EPA waiver, impacting other states with similar ambitions. This clash highlights tensions between state and federal regulations on climate policies and the evolving dynamics of the EV market.

President Trump's executive order on accessing deep-seabed minerals raises concerns internationally. The order aims to boost U.S. resource exploration in international waters, conflicting with the United Nations Convention on the Law of the Sea, which governs ocean resource rights.

【Oil-Producing Countries Dynamics】

Venezuela's oil industry faces challenges due to geopolitical tensions and U.S. sanctions. With diminishing exports and dependency on China, Venezuela's economic stability is at risk, compounded by "zombie ships" evading sanctions and production declines at key joint ventures.

OPEC's oil production dropped by 200,000 bpd in April, surprising the market. Despite having the option to increase output, major producers like the UAE and Saudi Arabia made minimal adjustments, reflecting strategic uncertainties ahead of the upcoming OPEC meeting.

Russia revises its revenue expectations from oil and gas, anticipating a 24% decline due to falling prices and economic pressures. With reduced income from energy exports, Russia's budget deficit is expected to triple, affecting its fiscal stability amidst ongoing geopolitical tensions.

【Global Oil Supply and Demand】

The International Monetary Fund has lowered its growth forecast for Middle Eastern oil exporters due to declining oil prices. The IMF highlights trade tensions and policy uncertainties as contributors to weakened growth prospects, urging diversification and fiscal prudence in the region.

U.S. LNG exports surged by 20% year-on-year from January to April due to strong demand in Europe amid a cold winter. The U.S. remains a leading LNG exporter, with ongoing expansions anticipated to boost capacity significantly in the coming years.

【Industry News】

QatarEnergy is negotiating a long-term LNG supply deal with Japanese firms, potentially securing over 3 million tons annually. As Japan relies heavily on LNG imports, this deal would reinforce Qatar's dominance in the Japanese market and align with its expansion goals to increase LNG production significantly by 2030.