Oil Daily | India Boosts Russian Oil Imports Amid US Tariffs; Sudan Conflict Threatens Crude Exports

【Global Oil Supply and Demand】

India's savings from discounted Russian crude since 2022 have reached $12.6 billion. The shift in Russian oil exports to India and China helped avoid significant international oil price hikes following the Ukraine conflict. India's adherence to international norms contributed to preventing an oil price surge beyond $200 per barrel.

Guyana is holding elections pivotal for its rapidly growing oil economy, with ExxonMobil, Hess, and CNOOC developing the Stabroek block. The ruling and opposition parties both support oil investment but differ on managing revenues. The outcome could affect billions in future production and state income, impacting Guyana's economic growth.

India continues to increase its Russian crude imports despite U.S. pressure. The U.S. imposed a 50% tariff on Indian goods due to its Russian oil purchases. Russia remains India's top crude supplier, accounting for a third of imports in July, while Iraq and Saudi Arabia follow with 17% and 16% shares, respectively.


【Oil-Producing Countries Dynamics】

The UK government is allowing flexibility for North Sea operators to explore tiebacks to existing hubs, despite a commitment not to issue new oil and gas licenses. Industry argues more exploration could reduce import dependency and aid the transition to clean energy. However, many current hubs need timely investment.

Saudi Aramco and Iraq's SOMO have stopped supplying crude to Nayara Energy’s refinery in India due to EU sanctions citing its Russian ownership. Nayara is processing only Russian oil and has focused on domestic markets amid sanctions, though it continues to face challenges in crude sourcing.

Sudan has shut down its Heglig oil facilities following drone strikes by the RSF, threatening South Sudan's crude exports. The attacks on this vital hub, part of the Greater Nile Oil Pipeline, risk prolonged revenue losses for both countries, as South Sudan lacks an alternative oil export route.

The Houthi rebels in Yemen claimed a missile attack on an Israel-linked oil tanker in the Red Sea, highlighting renewed threats to shipping. Prior Houthi attacks have disrupted global trade routes, prompting tankers to avoid the shortest route from the Middle East to Europe, impacting oil flows.


【Latest Oil Policies】

The EU is considering a 10-year exemption from energy taxes on aviation and shipping fuels, extending tax breaks until 2035. The proposal, part of a stalled revision of the Energy Taxation Directive, faces pushback due to economic concerns, though it could incentivize cleaner fuels if adopted.


【Industry News】

TotalEnergies was awarded the Nzombo exploration permit offshore the Republic of Congo. The permit, shared with QatarEnergy and SNPC, is near existing production facilities. TotalEnergies plans to drill an exploration well by 2025, continuing its strategy to expand its exploration portfolio with high-impact prospects.


【Company News】

Saudi Aramco and Iraq's SOMO stopped crude sales to India's Nayara Energy due to EU sanctions linked to Russian ownership. Nayara has turned to Russian Urals and "dark-fleet" tankers for supply. Despite this, India increased its Russian crude intake in August, highlighting continued demand despite geopolitical pressures.


【Others】

Gold prices surged, reflecting a weakening U.S. dollar and expectations of a Federal Reserve rate cut. Investor concerns over Fed independence, coupled with strong ETF inflows, have buoyed prices. Central bank demand has been rising, with gold becoming the second-largest reserve asset globally.