Oil Daily | OPEC Supply Hike Talks Stir Tensions; Saudi Pushes, Russia Cautious Amid Market Fluctuations

【Global Oil Supply and Demand】

OPEC's potential supply hike in November is causing market fluctuations. Saudi Arabia advocates for a substantial increase, while Russia urges caution. Despite announced hikes, actual production often falls short due to capacity constraints among many members, leaving Saudi Arabia and UAE as the only ones with significant spare capacity.

Kazakhstan supports OPEC's decision to gradually increase oil production, emphasizing national interests. Despite overproducing in the past, Kazakhstan is committed to the OPEC agreement. Production levels for November will be decided on October 5, with potential further reversal of cuts in November.

Amid rising global energy demand, Russian President Putin warned that oil prices could soar above $100 if Russian oil is excluded from the market. The U.S. is pressuring countries like India to cease Russian oil imports, although India continues to buy discounted Russian crude amid challenging trade negotiations with the U.S.

【Oil-Producing Countries Dynamics】

Russia and Saudi Arabia differ in their approach to OPEC's supply increase, causing internal friction. While Saudi Arabia pushes for a larger hike, Russia prefers a more modest increase. The difference between announced quota hikes and actual production continues to create market uncertainty.

Kazakhstan, a non-OPEC member but part of the OPEC agreement, has been overproducing above its quota. Despite efforts to comply with OPEC's production levels, Kazakhstan's output has increased due to projects with international majors like Chevron.

【Industry News】

India's state-owned oil companies seek long-term LPG supply from the United States for the first time, amid disrupted global flows and rising U.S. tariffs on Indian goods. The move aims to appease the U.S. and prompt a review of the tariffs, while India's crude imports from Russia have slightly decreased.

【Company News】

USA Rare Earth saw a significant surge in shares following communication with the White House, as the U.S. seeks direct equity involvement in developing a domestic rare earth magnet supply chain. The company aims to reduce reliance on China and plans to commercialize its manufacturing facility by 2026.

【Others】

India is under U.S. pressure to halt imports of Russian crude but continues to buy due to discounted prices. Despite a slight decrease in imports from Russia, they still account for a significant portion of India's crude arrivals. India negotiates trade deals with the U.S. amidst these pressures.