Oil Daily | Asian Jet Fuel Imports to Europe Surge; India's Russian Crude Buys Rise Amid U.S. Tariffs

【Global Oil Supply and Demand】

Jet fuel imports from Asia to Europe reached a record this summer as prices subsided from 2022 highs. Most imports came from China and South Korea. Europe imported 11.5 million barrels of jet fuel from Asia since August. European countries face growing dependence on imported fuels as local refineries shut down.

Exxon projects global natural gas demand will rise more than 20% by 2050, driven by coal displacement and growing electricity use. Oil demand is expected to plateau after 2030 but remain above 100 million barrels per day through 2050. Emerging Asia drives most incremental gas use.

【Oil-Producing Countries Dynamics】

Competitive U.S. crude prices prompted Indian refiners to accelerate purchases from the U.S. in August. Falling freight costs and open arbitrage windows are key factors. Indian Oil Corporation, Bharat Petroleum, and Reliance Industries increased their purchases. Despite this, Indian refiners are still buying Russian crude due to discounts.

India's refiners are expected to import more Russian crude oil in September as discounts deepen amid Russia's constrained refining capacity. Despite increased U.S. tariffs on India over Russian oil imports, Indian refiners plan to boost Russian crude imports by 150,000 to 300,000 barrels per day.

【Latest Oil Policies】

Russia's sanctioned Arctic LNG 2 export plant is testing U.S. sanctions enforcement as a cargo from the facility docked at a Chinese import terminal. Recent signs indicate Arctic LNG 2 is reviving activity and seeking buyers in Asia, potentially challenging U.S. sanctions against Russian energy projects.

【Industry News】

The U.S. Energy Information Administration announced delays to key reports due to staffing reductions. The Annual Uranium Marketing Report and International Energy Outlook face significant publication delays, raising concerns about the agency's ability to provide timely market information. The delays are linked to a staffing crisis from federal budget cuts.

The German port of Wilhelmshaven launched its second LNG terminal, which will commence commercial operations on August 29. This development follows Germany's shift from Russian gas supplies to LNG imports, ensuring energy security amid geopolitical tensions. The new terminal contributes to filling gas storage before the heating season.

The fuel loading and gas processing complex at Russia's Ust-Luga port was damaged in a Ukrainian drone attack. Repairs may take several months, impacting naphtha exports. Ust-Luga is a key export hub for Russian crude oil and fuels, and the attack disrupted operations, potentially affecting fuel shipments.

【Company News】

Phillips 66 will begin shutting down its Los Angeles-area refinery next week. The facility will be offline by year-end 2025, affecting 600 employees and 300 contractors. The closure, part of a trend of refinery shutdowns, raises concerns about California's fuel supply and economic impact.

ExxonMobil's Global Outlook critiques EU climate policies, highlighting regulatory burdens and energy price impacts. The report suggests cautious decarbonization strategies and criticizes Europe's approach as costly and ineffective. Exxon warns U.S. policymakers against adopting similar strategies without considering economic implications.

The court-ordered auction for Citgo's parent company sees a new bidder, Amber Energy, challenging the former preferred bidder. Amber Energy's bid is valued at $5.86 billion, prompting a response from the consortium led by Gold Reserve to improve its offer. The outcome remains uncertain.