Oil Daily | Indian Refiners Resume Russian Oil Purchases Amid Discounts; Pipeline Flows to Slovakia Restored

【Oil-Producing Countries Dynamics】

Indian state refiners have resumed purchasing Russian oil due to deepened discounts, despite U.S. pressure over Russian crude supply. Indian Oil Corporation and Bharat Petroleum have procured Russian Urals crude for delivery in September and October. The U.S. imposed additional tariffs on India, affecting its Russian oil imports, leading to complex trade negotiations.

Crude oil flows from Russia to Slovakia and Hungary have been restored after being suspended due to a Ukrainian attack. Slovakia's and Hungary's officials confirmed the resumption and expressed concerns about future attacks on the Druzhba pipeline, a vital oil supply route for Central Europe.

Japan's trade deal with the U.S. includes a major expansion of American energy exports, but Japan's refineries face challenges processing U.S. crude due to logistics and refinery specifications. Middle Eastern crude remains a significant part of Japan's oil supply despite increased U.S. imports.

【Latest Oil Policies】

The U.S. Environmental Protection Agency may issue waivers for biofuel blending mandates for small refiners, countering a federal proposal to increase biofuel blending. This follows President Trump's attempt to balance oil and biofuel interests. The EPA's decision could impact biofuel demand and compliance credit prices.

The Interior Department has announced a decades-long offshore leasing calendar, scheduling regular auctions in the Gulf of Mexico and Alaska's Cook Inlet. This move signals the Trump administration's commitment to offshore drilling, providing predictability for deepwater projects. The policy contrasts with previous administration stances.

【Industry News】

China plans to reduce its number of oil refiners and petrochemical producers to address overcapacity. The government intends to shut down smaller refineries and upgrade outdated facilities. This shift aims to focus production on specialty chemicals with healthier demand, such as AI applications and biomedical devices.

【Company News】

BP's Whiting refinery in Indiana experienced flaring after severe storms caused flooding. The refinery is crucial for regional fuel supply, and any disruption could impact markets. BP's European operations also face challenges, raising concerns about reliability amidst climate-related disruptions.

Freeport LNG is set to restart one of its liquefaction units after an outage. Freeport LNG frequently encounters operational issues, affecting gas flows and exports. Past disruptions include a fire in 2022, emphasizing the facility's vulnerability to adversity.

U.S. utilities are engaging in significant mergers and acquisitions to prepare for a surge in power demand. Notable deals include Constellation Energy's acquisition of Calpine and TXNM Energy's purchase by Blackstone. Utilities aim to enhance their offerings amidst growing data center demand driving load growth.

【Others】

A Lukoil refinery in Volgograd, Russia, was set on fire following a Ukrainian drone attack. This is part of a series of strikes affecting Russian refineries since August. The refinery is significant for fuel supply in southern Russia, and the attacks coincide with international diplomatic talks.