Oil Daily | Saudi Oil Exports to China Hit Low Amid Weak Demand; India Becomes Top EU Refined Oil Supplier

【Oil-Producing Countries Dynamics】

Rosneft has denied reports about consolidating Russian oil companies into a single entity, dismissing it as lacking business logic and potentially serving as a competitive market diversion. Both Rosneft and Lukoil deny merger negotiations, emphasizing that the rumors are baseless and not in their interests.

Weak demand in China has led to reduced Saudi oil exports for December, marking the lowest monthly volume since July. This reduction follows Saudi Arabia's price cuts for Asian crude, amid continued weak demand from Chinese refiners. OPEC's production cut easing is delayed due to underwhelming Chinese demand.

India has become the largest exporter of refined oil products to the EU, exploiting a loophole in EU sanctions against Russia. Indian refiners are processing cheap Russian crude and exporting to the EU, bypassing direct import bans. India continues to buy cheap Russian crude to ensure low-cost energy supplies.

【Latest Oil Policies】

Exxon CEO warns President-elect Trump against leaving the Paris Agreement, citing potential business uncertainty. Exxon has invested heavily in carbon capture, which aligns with the Agreement's goals. Despite potential U.S. withdrawal, Exxon and others can continue reducing emissions independently, but the lack of policy consistency can disrupt business plans.

Indonesia rejects China's claims in the South China Sea, emphasizing commitment to its maritime sovereignty. Despite signing cooperation agreements with China, Indonesia clarifies these will adhere to international law. Indonesia's stance challenges China's expansive territorial claims, asserting it undermines international legal norms.

Senegal may announce a $2.7-billion commitment to reduce emissions and reliance on fossil fuels if its ruling party wins upcoming elections. Under the Just Energy Transition Partnership, Senegal aims to boost renewable energy access. Internal politics have delayed commitments, but post-election developments could lead to significant progress.

【Industry News】

U.S. LNG stocks rose post-Trump's election, anticipating favorable trade deals with the EU. The EU considers increasing U.S. LNG imports to balance trade deficits and reduce dependence on Russian supplies. Industry executives express optimism about future U.S.-EU trade relations and regulatory support for LNG expansion.

U.S. natural gas futures surged due to Gulf of Mexico production disruptions caused by Hurricane Rafael. The hurricane caused significant oil and gas output losses, leading to market volatility. The EIA forecasts varying gas prices in future quarters, while European gas prices rise amid colder weather and depleted reserves.

QatarEnergy acquires a 23% interest in an Egyptian offshore concession from Chevron, marking another expansion for Qatar in international exploration. The deal reflects QatarEnergy's strategic growth in exploration hotspots like Namibia and Suriname, aligning with its global expansion ambitions.

【Company News】

Petroleos de Venezuela (PdVSA) faced a pipeline explosion in Eastern Monagas state, injuring three and highlighting infrastructure vulnerabilities. Despite recent production increases, U.S. sanctions continue to impact PdVSA. The Biden administration's policy shifts have allowed some transactions, but sanctions largely remain, affecting operations.