Oil Daily | Russia Boosts Crude Exports Amid Refinery Maintenance; US Oil Inventories Rise

【Global Oil Supply and Demand】

Crude oil inventories in the U.S. rose by 1.643 million barrels for the week ending October 18, surpassing expectations. Gasoline and distillate inventories fell, with gasoline stocks 4% below the five-year average. Cushing inventories also decreased, indicating fluctuations in U.S. oil supply levels.

Russia is increasing its crude oil exports due to domestic refinery maintenance, reaching 3.47 million bpd by October 20, the highest since June. Shipments to Asia surged, accounting for 95% of Russia's crude, while refining rates hit a two-year low. The export rise boosted Russia's crude shipment value.

China plans to increase its crude oil import quota for private importers by 6% to 5.14 million bpd in 2025. The move comes as Shandong Yulong Petrochemical starts operations, reflecting China’s growing crude demand. The quota adjustment aims to support new refining capacity.

【Oil-Producing Countries Dynamics】

Saudi Arabia and the UAE are poised for economic growth as OPEC plans to unwind oil production cuts, boosting Gulf economies. Saudi’s GDP has contracted due to output reductions, but the reversal of cuts is expected to benefit the region, with the UAE leading GCC growth.

Russian LNG accounted for 20% of the EU’s LNG imports in early 2024, despite overall lower EU LNG imports. The increased Russian share raises concerns about EU reliance on Russian LNG, with some member states advocating a ban on these imports.

【Latest Oil Policies】

Germany approved a €19 billion plan to develop a hydrogen network, converting natural gas pipelines for hydrogen transport to decarbonize industrial consumers. However, some green hydrogen projects face cancellations due to unfavorable market conditions. Germany aims for climate neutrality by 2045.

The U.S. is intensifying efforts to curb Russia's LNG exports to limit Moscow's war funds. Sanctions on Russia's Arctic LNG 2 plant have stalled foreign participation, but other Russian LNG projects continue operations. The U.S. monitors potential impacts on global LNG supply.

【Industry News】

Baker Hughes reported strong Q3 profits, driven by international operations and LNG business growth. The company saw a 23% increase in EBITDA and a 30% rise in operating profits. Europe and sub-Saharan Africa showed notable growth, while other regions faced declines.

【Company News】

China imported a record number of electric vehicles from the EU ahead of potential import tariffs. The EU is considering tariffs due to China's subsidies, causing concerns over a trade war. German carmakers oppose the tariffs, fearing retaliatory trade measures.

【Others】

Russia's crude export increase is driven by domestic refinery maintenance, with shipments predominantly heading to Asia. The rise in export volumes boosts Russia's weekly crude shipment value, despite lower refining rates and higher offline capacity due to maintenance.