Oil Daily | China's Fuel Exports Surge, Saudi Expansion, U.S. Policy Shift Influence Global Oil Dynamics

【Global Oil Supply and Demand】

China's exports of gasoline and diesel are set to reach a 16-month high in July, driven by higher refining margins and available fuel export quotas. Refiners are focusing on overseas markets due to inadequate domestic demand, boosting refinery throughput. Potential increases in distillate exports are anticipated amid EU sanctions on Russian fuel imports.

U.S. crude oil production from onshore federal lands hit a record 1.7 million bpd in 2024, spurred by activity in New Mexico's Permian Basin. Federal onshore natural gas production rose modestly to 4.2 Tcf, while federal offshore gas production continues to decline.

【Oil-Producing Countries Dynamics】

Australia's Woodside has taken over Exxon in the Bass Strait oil and gas assets. The shift aims to boost domestic gas production amid concerns of a gas shortage. The Bass Strait, the oldest offshore operation, is the largest supplier of gas to eastern Australian states.

Saudi Aramco has awarded contracts for the Zuluf oilfield expansion, aiming to boost production capacity by over 600,000 bpd. This strategic move aligns with its goal of increasing production capacity to 13 million bpd by 2027, despite short-term oil price volatility.

【Latest Oil Policies】

The Trump administration reversed Biden-era limitations on oil and gas development in Alaska's National Petroleum Reserve, facilitating new drilling opportunities. This policy shift aims to boost oil production in the Arctic and potentially increase the throughput of the Trans-Alaska Pipeline.

【Industry News】

Vitol paid a record $10.6 billion in share buybacks last year, highlighting the financial gains commodity traders have made amid energy market disruptions. Despite declining profitability, Vitol forecasts stable oil demand over the next 15 years, challenging predictions of demand peaking before 2030.

【Company News】

Baker Hughes is nearing a $13.6 billion acquisition deal for Chart Industries, strengthening its industrial and energy technology business. The acquisition could enhance Baker Hughes' position in LNG, supported by order momentum despite the absence of large LNG awards.

U.S. LNG exporters saw a rise in stock prices following the EU's announcement of a $750 billion energy purchasing framework focused on LNG. Cheniere Energy and Venture Global gained, benefiting from expectations of increased long-term European contracts.

【Others】

Shares of U.S. LNG producers rose after the EU committed to increasing energy imports from the U.S., including LNG, oil, and nuclear energy. This move aims to replace Russian gas volumes and diversify supply, potentially benefiting LNG developers with uncommitted capacity.