Oil Daily | India's Oil Demand Surges Past China; Kuwait Invests $50B to Boost Production Capacity
Market BriefFriday, May 16, 2025 8:00 am ET
2min read【Oil-Producing Countries Dynamics】
Kuwait plans to invest $50 billion to increase its oil production capacity to over 3 million bpd within five years. Kuwait Petroleum Corporation aims to further boost production to 4 million bpd by 2040, including in the Partitioned Neutral Zone. This investment is part of Kuwait’s strategy to enhance sustainable crude and gas production. Kuwait's vulnerability to oil price slumps stems from borrowing constraints since 2017.
In Guyana, the Guyana Defence Force reported attacks by armed individuals from Venezuela along the Cuyuni River amid tensions over the oil-rich Essequibo region. The incidents coincide with Venezuela's plans to hold elections in the disputed area, defying international condemnation. Washington has warned of severe consequences for Venezuela if Guyana or ExxonMobil are attacked.
India is surpassing China as the world's fastest-growing oil demand center, with a projected increase to 5.99 million bpd by 2026, driven by economic growth and infrastructure expansion. India accounted for 25% of global oil demand growth this year, with Russia and Iraq as top crude suppliers. The country is cementing its status as the leading engine of oil demand growth.
【Latest Oil Policies】
Kuwait approved a new financing and liquidity law allowing it to return to the debt market after eight years. The borrowing will fund projects to diversify its economy away from oil. Kuwait has lagged behind other Gulf countries, like Saudi Arabia and UAE, which have been investing in infrastructure and technology despite borrowing constraints.
Japan's biggest oil refiners, including Eneos and Idemitsu Kosan, are reducing investments in low-carbon fuels due to slower uptake and higher costs. Eneos removed its hydrogen supply target, while Idemitsu decreased its investment in synthetic fuels and hydrogen. The trend toward decarbonization is slowing, prompting a strategic pivot to fossil fuels.
【Industry News】
The Federal Energy Regulatory Commission warns of potential grid breakdowns in the U.S. due to high temperatures, AI-driven electricity demand, and retiring baseload generation. FERC highlights Texas and New England as vulnerable areas, suggesting operational mitigations. Rising demand and supply constraints may lead to reliability issues and higher electricity bills.
Liberty Energy anticipates a slowdown in shale drilling despite efforts to boost U.S. production. CEO Ron Gusek projects fewer frack crews due to insufficient oil prices. Financial discipline remains crucial as drillers avoid chasing volume without price support, impacting U.S. production growth, particularly in the Permian Basin.
【Company News】
Vistra Energy agreed to acquire 2.6 GW of gas-powered generation capacity from Lotus Infrastructure Partners across several U.S. states. This acquisition aligns with projected surges in electricity demand driven by data centers. NRG Energy also acquired gas-powered facilities, betting on growing demand amid concerns of grid reliability.
Strathcona offered to acquire MEG Energy for $4.25 billion, aiming to unify two heavy oil "pure plays" focused on SAGD oil sands development. The merger would create the fourth-largest oil producer using team-assisted gravity drainage recovery technology and result in savings from operating synergies and interest payments.
Engie has slowed approvals for new U.S. renewable projects due to tariff uncertainties and the potential repeal of President Biden's Inflation Reduction Act. Existing projects remain protected from tariff increases, but Engie seeks clarity on IRA provisions to drive future investment decisions. The suspension of Equinor's Empire Wind project highlights challenges for energy groups.
Kuwait plans to invest $50 billion to increase its oil production capacity to over 3 million bpd within five years. Kuwait Petroleum Corporation aims to further boost production to 4 million bpd by 2040, including in the Partitioned Neutral Zone. This investment is part of Kuwait’s strategy to enhance sustainable crude and gas production. Kuwait's vulnerability to oil price slumps stems from borrowing constraints since 2017.
In Guyana, the Guyana Defence Force reported attacks by armed individuals from Venezuela along the Cuyuni River amid tensions over the oil-rich Essequibo region. The incidents coincide with Venezuela's plans to hold elections in the disputed area, defying international condemnation. Washington has warned of severe consequences for Venezuela if Guyana or ExxonMobil are attacked.
India is surpassing China as the world's fastest-growing oil demand center, with a projected increase to 5.99 million bpd by 2026, driven by economic growth and infrastructure expansion. India accounted for 25% of global oil demand growth this year, with Russia and Iraq as top crude suppliers. The country is cementing its status as the leading engine of oil demand growth.
【Latest Oil Policies】
Kuwait approved a new financing and liquidity law allowing it to return to the debt market after eight years. The borrowing will fund projects to diversify its economy away from oil. Kuwait has lagged behind other Gulf countries, like Saudi Arabia and UAE, which have been investing in infrastructure and technology despite borrowing constraints.
Japan's biggest oil refiners, including Eneos and Idemitsu Kosan, are reducing investments in low-carbon fuels due to slower uptake and higher costs. Eneos removed its hydrogen supply target, while Idemitsu decreased its investment in synthetic fuels and hydrogen. The trend toward decarbonization is slowing, prompting a strategic pivot to fossil fuels.
【Industry News】
The Federal Energy Regulatory Commission warns of potential grid breakdowns in the U.S. due to high temperatures, AI-driven electricity demand, and retiring baseload generation. FERC highlights Texas and New England as vulnerable areas, suggesting operational mitigations. Rising demand and supply constraints may lead to reliability issues and higher electricity bills.
Liberty Energy anticipates a slowdown in shale drilling despite efforts to boost U.S. production. CEO Ron Gusek projects fewer frack crews due to insufficient oil prices. Financial discipline remains crucial as drillers avoid chasing volume without price support, impacting U.S. production growth, particularly in the Permian Basin.
【Company News】
Vistra Energy agreed to acquire 2.6 GW of gas-powered generation capacity from Lotus Infrastructure Partners across several U.S. states. This acquisition aligns with projected surges in electricity demand driven by data centers. NRG Energy also acquired gas-powered facilities, betting on growing demand amid concerns of grid reliability.
Strathcona offered to acquire MEG Energy for $4.25 billion, aiming to unify two heavy oil "pure plays" focused on SAGD oil sands development. The merger would create the fourth-largest oil producer using team-assisted gravity drainage recovery technology and result in savings from operating synergies and interest payments.
Engie has slowed approvals for new U.S. renewable projects due to tariff uncertainties and the potential repeal of President Biden's Inflation Reduction Act. Existing projects remain protected from tariff increases, but Engie seeks clarity on IRA provisions to drive future investment decisions. The suspension of Equinor's Empire Wind project highlights challenges for energy groups.
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