Oil Daily | EU-Russia Energy Spending, China's Demand Peak, Pemex Job Cuts Impact Oil Market

【Latest Oil Policies】

The U.S. is urging the EU to cut tariffs on American goods and drop its proposed digital tax to advance trade talks. Despite backtracking from a proposed 20% tariff, the U.S. maintains a 25% tariff on EU steel, aluminum, and car parts, while threatening additional tariffs. The EU's proposal for mutual zero tariffs was dismissed by President Trump. Failure in U.S.-EU trade talks could dampen oil demand growth.

The EU paid approximately €7 billion more on Russian energy imports than it provided Ukraine in military and financial aid in 2024, despite sanctions. The EU spent an estimated €46 billion on Russian energy imports, primarily LNG and pipeline gas. This report highlights the complex trade-off in European energy policy amid geopolitical tensions.

The EU is pushing to lower the G7's price cap on Russian crude, but the U.S. remains unconvinced. The cap, introduced to restrict Russia's oil revenue, faces challenges with Russia's tactics to circumvent it. The EU recently announced a 17th sanctions package targeting Russia's shadow fleet. The cap aims to reduce Kremlin revenues amid the ongoing geopolitical dynamics.

【Company News】

Mexico's Pemex plans to cut 3,000 jobs, saving $540 million by redirecting funds to exploration and production amid declining production and rising operating costs. Production fell by 10% in 2024, with exports hitting the lowest rate since 1990. Pemex aims to reverse this decline by reopening idle wells and increasing daily production.

Venture Global aims to surpass Cheniere Energy as the top U.S. LNG company if regulators approve its CP2 project. The CP2 LNG would add 28 mtpa, raising Venture Global's total capacity to 66.5 mtpa. Despite a dispute with major oil firms over delivery delays, Venture Global remains supported by the current U.S. administration.

France's TotalEnergies is launching its largest solar project in Europe with five solar projects totaling 263 MW in Spain, aiming to generate 515 GWh annually. This project aligns with Spain's goal of 80% renewables by 2030. TotalEnergies continues to focus on renewable energy despite a trend among European oil majors to reduce green investments.

【Others】

China's crude oil demand is expected to peak within 3-5 years, while India's demand will continue to grow. Moody's attributes China's plateau to slowing economic growth and a shift toward EVs, while India's growth is driven by rising consumption and infrastructure expansion. This shift impacts global oil pricing and refining strategies.

Nigeria is urging oil companies to boost production, as it consistently fails to meet its OPEC quota due to oil theft and vandalism. Nigeria's production averaged 1.4 million bpd in the first quarter, below its OPEC quota of 1.8 million bpd. ExxonMobil plans to invest in Nigeria's offshore oil and gas exploration and development.

India's Petronet LNG has delayed the expansion of Dahej facility due to logistics and security concerns amid India-Pakistan tensions. The expansion aims to increase capacity to 22.5 mtpa. India's LNG demand is expected to surge, with gas consumption projected to reach 103 bcm annually by 2030, driven by infrastructure development and policy support.