Oil Daily | China's Oil Imports Decline Amid U.S. Sanctions and Rising EV Adoption Trends

【Oil-Producing Countries Dynamics】

Problems with the salt content in Pemex oil have been resolved, according to Mexico's President Claudia Sheinbaum. Earlier reports indicated that Gulf Coast refiners rejected Mexican crude due to high salt and water content, leading to seeking alternative buyers. Mexico continues to look for clients in Asia and Europe.

China's crude oil imports fell by 5% in the first two months of the year, influenced by U.S. sanctions on Russian energy affecting global flows. This marks a trend of declining imports due to lower industrial activity and high EV adoption. Peak oil demand growth is foreseen by state giants CNPC and Sinopec.

U.S. tariffs on Canada and Mexico, along with supply level signals, led to substantial oil price losses. Despite a temporary suspension of tariffs by President Trump, Canadian oil exports remain unaffected. Oil market sentiment is nervous, as minor OPEC production changes impact prices significantly.

European leaders are urging the EU and Ukraine to discuss resuming Russian gas transit through Ukraine, with Slovakia's PM advocating for it due to regional energy costs. The EU faces potential transit disruptions, impacting Ukraine's revenue and Gazprom's sales. Gas storage levels are low after a cold winter.

Tanzania plans to launch a new oil and gas licensing round in May, offering 26 exploration blocks. This move is aimed at exploiting the country's vast natural gas resources, with a stalled $42-billion LNG export project awaiting tax incentive negotiations. The country hopes to revitalize exploration efforts.

Indonesia is investing $12.5 billion in a massive refinery project to boost energy security and reduce imports. This facility will cut imports by 182.5 million barrels annually. The initiative is expected to create significant employment, aligning with the government's strategy to enhance domestic refining capacity.

【Latest Oil Policies】

The European Union's new emissions trading system (ETS2), set to begin in 2027, aims to reduce emissions from buildings, transport, and small industries by introducing a carbon price. This system is expected to drive investments in low-emission solutions but may increase costs for consumers.

【Company News】

Canadian Natural Resources reported a 50% drop in Q4 net earnings compared to the previous year, despite record production levels, due to declining oil prices. The company recently acquired assets from Chevron, enhancing its production portfolio. It warns of potential impacts from evolving political developments and tariffs.

【Others】

The Trump Administration is considering inspections of Iranian oil tankers under an international treaty to prevent the spread of weapons of mass destruction. This is part of the "maximum pressure" campaign on Iran, aimed at reducing its oil exports, mainly to China, and curbing its proliferation activities.