Oil Daily | China and Russia Boost Petroleum Exports; ONGC Enhances Production Amid Global Supply Shifts

【Global Oil Supply and Demand】

India's Oil and Natural Gas Corporation is enhancing oil and gas production via well optimization and accelerating new discoveries, aiming to counteract declining domestic output and reduce dependence on imports, which currently fulfill 85% of demand. New discoveries by ONGC and exploration rights in 15 blocks are set to bolster supply.

China's July refined petroleum exports surged to 5.34 million tons, with gasoline and diesel shipments rising by double digits compared to a year earlier. Increased refining throughput, driven by improved fuel margins, elevated crude processing to 14.85 million barrels per day, sustaining high export levels amidst strong domestic refining activity.

Russia's Arctic LNG 2 project, facing U.S. sanctions, resumed exports with four tankers heading to Asia, testing the resolve of sanctions. Despite previous challenges in finding buyers, Russia aims to revive sales, leveraging the Northern Route to reach Asian markets, as geopolitical tensions and sanctions persist.

【Oil-Producing Countries Dynamics】

Indonesia plans to build modular refineries to process U.S. crude; however, analysts caution these may restrict refining mix and profitability. The plan follows an $8-billion contract with KBR Inc amid tariff reductions on Indonesian products entering the U.S., sparking shifts in trade and refining strategy.

Brazil's ANP extended the exploration timeline for the Aram block in the Santos Basin pre-salt to June 2029, granting Petrobras and CNOOC more time for drilling and development. This extension is crucial for maintaining self-sufficiency as legacy fields age, ensuring continued investment and exploration in key areas.

Oil exports from Iraq's Kurdistan region have been stalled since March 2023 due to unresolved authorization disputes. Despite plans to resume in July, drone attacks have delayed pipeline restart. U.S.-Iraq discussions aim to resolve issues with oil companies and facilitate the resumption of exports from Kurdistan.

【Latest Oil Policies】

The U.S. Department of Agriculture banned the use of farmland for solar installations, citing concerns over food security and the impact on prime farmland. This decision halts federal funding for solar and wind projects on productive lands, addressing growing concerns about the balance between food and energy production.

【Industry News】

U.S. solar equities soared following Treasury guidance on renewable energy tax credits, alleviating uncertainty for developers. The updated policy favors residential solar projects while imposing stricter thresholds for large utility projects, boosting investor confidence and reversing previous declines in clean energy stocks.

【Company News】

India's ONGC is pursuing increased oil and gas production through well optimization and accelerated production from new discoveries, crucial as domestic output declines amid high import dependence. Efforts include nine new discoveries and exploration rights in 15 blocks, aiming to boost self-sufficiency in hydrocarbons.

【Others】

Oil flows via the Druzhba pipeline to Hungary were halted after a Ukrainian attack on a transformer station, impacting Hungary's energy security. Hungary continues to rely heavily on this Soviet-era infrastructure despite EU sanctions on Russia, with Russian engineers working to restore flows amidst geopolitical tensions.