Oil Daily | China's Stockpiling Boosts Oil Prices Amid OPEC Hikes; Kurdistan Oil Export Dispute Persists

【Global Oil Supply and Demand】

Global petrochemicals trade could decline by 15% due to U.S. tariffs disrupting destination flows, industry executives told Reuters. Overcapacity has led to trading declines, with Chinese exporters expanding supply to other Asian countries as they shift global trade flows. China is taking steps to eliminate excess petrochemical capacity.

China will continue increasing crude oil imports for strategic reserves into 2026, driven by stockpiling rather than demand rebound. Elevated imports since March-April have supported oil prices despite OPEC hikes and global demand concerns. Analysts estimate China's stockpiling rate at close to one million barrels per day.

China’s Power of Siberia 2 pipeline with Russia could replace one-third of its LNG imports, impacting the global gas trade. The 50 bcm conduit would reduce China’s LNG needs as exporters expand capacity. Analysts warn U.S. LNG exporters may lose market share in Asia if China secures more Russian volumes.

【Oil-Producing Countries Dynamics】

Kurdistan has lost $28 billion from an ongoing dispute over oil exports with Iraq and Turkey, affecting security and revenue. Despite negotiation breakthroughs, disagreements persist, causing export halts since March 2023. Previously, Kurdistan exported 400,000 barrels per day, critical for regional revenue.

【Latest Oil Policies】

South Korea urged its petrochemicals sector to reduce excess capacity amid a global glut that has depressed margins. Industry restructuring is aimed at stabilizing the struggling sector, with executives from top companies signing a deal to support restructuring efforts.

【Industry News】

Japan is evaluating the Alaska LNG pipeline and export terminal project, signaling interest in backing the $44 billion venture. The project would involve an 800-mile pipeline from Alaska’s North Slope, but cost and remoteness have delayed progress. Tokyo's involvement could prove decisive.

【Company News】

Chevron plans to balance its refinery portfolio across Asia, focusing on investment-heavy areas like Korea, while avoiding major investments in places like Singapore. The company is restructuring its operations to reduce costs and boost profits, including significant workforce reductions.

Fermi has filed for a U.S. IPO amid increased demand for data centers driven by AI. This growth is prompting developers to secure renewable and nuclear power for reliable energy supply. The IPO will fund land acquisitions and power infrastructure, aligning with energy transition strategies.

【Others】

EU carmakers are expected to sell 2 million fewer EVs than anticipated due to flexible EU emission regulations for 2025, allowing more industry breathing space. Green group T&E calls for firm targets to ensure Europe competes in the global EV market.