Oil Daily | U.S. Crude Stocks Surge, OPEC Adds Supply Amid Russia-Iran Tariff Threats

【Global Oil Supply and Demand】

The American Petroleum Institute reported a significant rise in U.S. crude oil inventories, with an increase of 6.037 million barrels for the week ending March 28. Gasoline inventories fell by 1.628 million barrels, while distillate inventories dropped by 11,000 barrels. Cushing inventories rose by 2.244 million barrels.

Oil prices slightly decreased as OPEC begins adding supply and U.S. threats of tariffs on Russian and Iranian oil persist. President Trump threatened sanctions on Russia and Iran, impacting oil prices. OPEC is adding 138,000 barrels per day to supply, with a key meeting on Saturday to decide future production levels.

【Oil-Producing Countries Dynamics】

OPEC reduced crude oil production in March by 110,000 barrels per day to 27.43 million barrels per day, pushing for tighter compliance with quotas. Nigeria and Iraq saw declines in production, while the UAE increased output. Analysts expect OPEC to increase production quotas for May by 138,000 barrels per day.

Kazakhstan reached a record high of 2.17 million barrels per day of crude oil and condensate production in March, exceeding its OPEC quota. Chevron's expansion at the Tengiz oilfield increased crude output. Kazakhstan's crude exports via CPC remained high, facing potential disruptions due to Russia's terminal shutdown.

Russia shut two moorings at the CPC's Black Sea oil export terminal, affecting Kazakhstan’s crude shipments. Safety inspections led to this action after a December oil spill. The suspension may halve Kazakhstan's exports, impacting international oil firms like Chevron and ExxonMobil operating in Kazakhstan.

【Latest Oil Policies】

India’s NTPC plans to build 15 GW of new nuclear capacity, seeking foreign partners due to legislative amendments. This aims to boost emission-free and reliable electricity generation, aligning with energy transition goals. India targets 500 GW non-hydrocarbon capacity by 2030, reducing dependence on imported oil and gas.

Thailand and Vietnam committed to buying more U.S. energy commodities to avoid tariffs. Vietnam reduced import tariffs on LNG, cars, and ethanol. Thailand estimated an 11% U.S. import tariff could cost $8 billion, prompting increased energy imports as a trade strategy.

The U.S. imposed renewed sanctions on Venezuela, cutting oil exports by 11.5% in March. President Trump revoked Chevron's waiver to operate in Venezuela and threatened tariffs on countries buying Venezuelan crude. This move aims to strip Venezuela of oil profits amid electoral and migration concerns.

OPEC sources expect a production increase in May, with eight members lifting production by 135,000 barrels per day. The planned increase might improve compliance rather than actual production. Kazakhstan, Iraq, and Russia have historically exceeded quotas, despite pledges to align with OPEC limits.

【Industry News】

Russia's Arctic LNG 2 project resumed gas processing after sanctions disruptions. The facility faced sales challenges due to U.S. and EU sanctions. Novatek, the majority owner, seeks to improve relations with the U.S. to overcome hurdles and boost Russia’s global LNG market share.

【Company News】

Chevron's expansion at Kazakhstan's Tengiz oilfield increased crude output, contributing to the country's record production despite exceeding OPEC limits. Chevron’s investment in Kazakhstan faces challenges in limiting production after significant investments in oilfield expansions.

【Others】

The latest U.S. sanctions on Venezuela impacted its oil exports, with Chevron and other firms affected by revoking operational licenses. The Biden administration previously issued licenses for foreign firms to import Venezuelan oil, now revoked by the U.S. Treasury to cut Venezuela’s oil profits.