Oil Daily | China's LNG Imports from Russia Resume Amid Sanctions; Kuwait Boosts Oil Production Capacity

【Global Oil Supply and Demand】

China has been receiving LNG shipments from Russia's Arctic export project, Arctic LNG 2, despite U.S. and EU sanctions. The project, operated by Novatek, faced challenges in finding buyers after sanctions but resumed exports to China in August. This raises questions about potential U.S. sanctions on China's LNG customers.

Thermal coal imports into Asia rose in August after a nine-month decline, driven by China's production curbs and industrial activity in East Asia. The increase suggests sustained demand for coal, supported by heating needs in winter. China remains a major coal importer, with imports set to remain high in the coming months.

China's crude imports from Russia decreased in August year-on-year, as China diversified suppliers, including Brazil and Indonesia. However, seaborne flows from Russia to China rose compared to July. China remains the largest oil importer, adjusting buying patterns based on price dynamics and seasonal demand.

Oil production capacity in Kuwait reached 3.2 million bpd, the highest in over a decade. Despite increased capacity, Kuwait adheres to OPEC agreements, producing 2.559 million bpd from October. The country plans to invest significantly in raising production capacity further, while OPEC considers adjustments based on market conditions.

【Oil-Producing Countries Dynamics】

Hungary remains committed to Russian oil imports despite EU and U.S. pressure, as it relies on Russian supplies for energy security. Hungary, one of the largest EU importers of Russian crude, has been resistant to sanctions that could jeopardize its energy supply.

A potential agreement between Baghdad, Erbil, and oil companies could end an 18-month halt in Kurdish crude exports via Turkey's Ceyhan port. The deal involves placing 230,000 bpd under federal authority while resuming exports. Turkey's approval remains crucial for implementation.

【Latest Oil Policies】

The PJM Interconnection grid operator, which covers 13 U.S. states, is discussing giving states a greater role in decision-making amid high consumer electricity bills. States seek more influence in governance, similar to other regional grids, to address rising electricity costs driven by data centers and AI technologies.

【Industry News】

Ørsted's Revolution Wind project resumes after a court ruling blocked the Trump administration's stop-work order. The decision allows construction to continue on the 704 MW wind farm, a significant victory for Ørsted amidst U.S. offshore wind industry challenges.

BP canceled plans for a biofuels facility at its Rotterdam refinery, focusing instead on co-processing biofuels in existing refineries. The decision reflects high feedstock costs and shareholder demands for higher returns, impacting Europe's advanced biofuels ambitions.

【Company News】

Santos announced first gas from the $4.5-billion Barossa project offshore Australia, marking an important milestone for its LNG venture. The project will supply gas to the Darwin LNG plant, enhancing Santos' oil and gas production output in the coming years.

Commonwealth Fusion Systems signed a $1-billion power purchase agreement with Italy’s Eni, advancing fusion energy development. The agreement underscores the potential of fusion power as a clean energy source, with CFS planning to connect its Virginia power plant to the grid in the 2030s.

【Others】

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