Oil Daily | Saudi Output Exceeds Quota; Russia Faces Revenue Drop; Shell Begins South Africa Drilling

【Oil-Producing Countries Dynamics】

Saudi Arabia exceeded its June production quota by 700,000 barrels per day, producing 9.8 million bpd. The International Energy Agency views this increase as a sign of real production gains, although Saudi Arabia attributes it to regional tensions and rising domestic demand. The credibility of OPEC's compliance figures is under scrutiny.

Russia's export revenue from crude oil and petroleum products fell by 14% in June compared to the previous year, despite stable production levels. The decline is attributed to weaker commodity prices and a stronger ruble, impacting Russia's budget heavily reliant on oil and gas revenue, posing challenges for its war economy.

【Industry News】

India is urged to expand its petrochemicals production to counter China's dominance in the sector. Reliance Industries highlights the need to boost India's petrochemicals presence to meet rising local demand amid China's surplus-driven market conditions. Indian refiners are investing in capacities to leverage cost advantages using naphtha and natural gas as feedstock.

Shell received environmental authorization to drill up to five deepwater wells off South Africa's west coast, targeting the Orange Basin. The region is shared with Namibia, where significant offshore discoveries have been made. However, Shell faces court challenges from environmental campaigners, potentially hindering exploration efforts.

【Company News】

BP anticipates lower second-quarter earnings due to reduced oil and gas prices, despite higher output and refining margins. BP's oil production segment is expected to see a decline of $600 million to $800 million compared to the previous quarter. The company is under pressure from activist investor Elliott to cut costs and improve performance.

Shell and ExxonMobil have warned of lower profits in the second quarter due to weaker oil and gas prices. Shell expects reduced trading results, while ExxonMobil anticipates significant financial impacts from decreased prices. These developments highlight ongoing challenges for supermajors amid fluctuating market conditions.