Oil Daily | US Expands Sanctions on Chinese Oil Terminals Amid Iranian Crude Trade Concerns

【Global Oil Supply and Demand】

The U.S. sanctioned a fourth Chinese oil terminal for receiving Iranian crude, expanding sanctions on 20 entities involved in Iranian oil trade. Despite previous U.S. sanctions, China remains Iran's largest oil customer. Crude imports from Iran to China are unofficially conducted through intermediary transfers, although Chinese customs data shows no imports since 2022.

Chevron received a U.S. sanction exemption for Venezuelan operations under the condition that no funds reach the Venezuelan government. This move is expected to gradually boost Venezuelan crude supply and affect heavy crude market prices. The U.S. previously imported around 300,000 barrels daily from Venezuela, matching Chevron's past output.

The U.S. and Pakistan reached a trade deal to jointly develop Pakistan's oil reserves, potentially reducing reciprocal tariffs. Pakistan holds substantial shale oil and gas reserves. The agreement marks a new phase in economic collaboration across several sectors, with potential for future oil trade with India.

India's refiners are concerned after President Trump announced a 25% tariff on Indian exports to the U.S., linked to India's Russian oil purchases. The tariff threat disrupts procurement strategies and raises concerns over broader exposure to U.S. and EU enforcement actions.

Kazakhstan and Turkey discussed increasing Kazakh oil exports via the BTC pipeline to Turkey, aiming to diversify energy sources and bypass Russian routes. Kazakhstan raised its BTC exports by 12% in the first half of the year, while Turkey seeks to expand international partnerships in energy exploration.

【Oil-Producing Countries Dynamics】

Crude oil exports from Brazil to the U.S. are set to resume after tariff exemptions were granted. Brazil's total oil exports averaged 1.78 million barrels daily in 2024, with the U.S. previously being a key buyer. The exemptions avoided a potential 50% tariff that could have redirected Brazilian crude to other markets.

【Latest Oil Policies】

President Trump announced a tariff deal with South Korea, avoiding a steeper 25% levy. South Korea agreed to purchase $100 billion worth of U.S. energy exports. The deal aims to boost U.S. economic growth and secure South Korean export competitiveness amid Trump's aggressive tariff policies.

President Trump issued a shortened deadline for Russia to reach peace with Ukraine, threatening sanctions. Barclays notes potential limited impact on oil due to the administration's focus on low energy prices and Russia's past sanction resilience. Oil prices rose briefly on the deadline announcement.

【Industry News】

U.S. GDP growth of 3% in Q2 led to modest oil price increases, with geopolitical factors adding potential volatility. Trade tensions, sanctions, and a rollback of clean energy incentives signal potential market disruptions. AI-driven power demand is rising, but oil activity remains cautious.

【Company News】

Microsoft restored services to India's Nayara Energy, previously suspended due to EU sanctions targeting Rosneft-linked firms. The sanctions disrupted Nayara's operations, affecting fuel exports and requiring changes in payment terms. Microsoft continues discussions with the EU for service continuity.

【Others】

A major earthquake near Russia's Kamchatka Peninsula triggered tsunami alerts, prompting monitoring of energy infrastructure. Sakhalin-2 LNG facility and nearby oil export terminals reported no damage, maintaining operations. Seismic activity raised concerns over pipeline stability and energy infrastructure exposure.