Oil Daily | Kazakhstan Faces Compliance Issues as OPEC Considers Stricter Measures Amid Market Fluctuations

【Latest Oil Policies】

A federal judge has blocked an Environmental Protection Agency order to cancel $20 billion in federal funding for energy transition projects. This ruling prevents beneficiaries from accessing the funds, including the Climate United Fund, Coalition for Green Capital, and Power Forward Communities, which now face project cancellations and layoffs.

President Donald Trump has authorized efforts to increase U.S. coal power generation to counter China's economic advantage from coal plants. The administration is considering emergency authority to keep coal plants open and resurrect closed ones as part of a national energy emergency declaration to ensure reliable energy.

【Global Oil Supply and Demand】

Sales of bunkering fuel at major global hubs have slowed, attributed to geopolitical uncertainty and tariff impacts. This decline reflects broader global trade uncertainty, with shipping companies optimizing operations cautiously. Unlike previous demand patterns, no alternative port has absorbed the reduced demand seen in hubs like Singapore and Fujairah.

The American Petroleum Institute reports a rise in U.S. crude oil inventories by 4.593 million barrels for the week ending March 14, exceeding analyst expectations. Gasoline and distillate inventories fell, while Strategic Petroleum Reserve levels increased slightly. A decrease in Cushing inventories was also noted.

【Oil-Producing Countries Dynamics】

Kazakhstan's overproduction beyond OPEC quotas led to the dismissal of its oil minister. Despite promising production cuts, its compliance remains unclear. OPEC is considering stricter measures for overproducers like Kazakhstan, Iraq, and Nigeria, as members face pressure to adhere to quotas amid fluctuating market conditions.

Russia agreed to a 30-day suspension of attacks on Ukrainian energy infrastructure during talks with the U.S., reciprocated by Ukraine. The agreement marks a step towards peace, potentially affecting oil supply disruptions. Further negotiations on a ceasefire are planned in Saudi Arabia.

Russia's oil production in 2025 is expected to be slightly lower as it compensates for past overproduction per OPEC's schedule. Deputy Prime Minister Alexander Novak anticipates stable oil processing levels and expects global demand to rise in the summer, aligning with OPEC's plans to increase supply.

【Industry News】

Kazakhstan struggles to enforce OPEC production targets, projecting record high levels with the help of Chevron. Despite governmental efforts, oil majors operating in Kazakhstan prioritize shareholder interests over compliance, posing challenges to OPEC's market stability efforts.

Gazprom Neft's CEO stated that the company finds current Urals crude pricing acceptable due to a stronger ruble, which counterbalances lower oil prices. The shift in currency dynamics reduces operational costs, maintaining Gazprom Neft's financial stability amidst price fluctuations.

Nigeria's Trans-Niger Pipeline suffered an explosion suspected to be sabotage. This event disrupts crude supply from the Niger Delta to export terminals, challenging Nigeria's efforts to increase production amid ongoing issues of theft and vandalism in the region.

Despite high LNG demand in Europe, France and Germany's floating LNG import terminals remain underutilized due to high operational costs. Instead, onshore facilities offer more competitive alternatives, leading to financial losses and operational challenges for floating terminals like Le Havre.

【Company News】

Shell's Trans-Niger Pipeline in Nigeria experienced an explosion, potentially due to sabotage, affecting oil exports. Amid threats from militant groups, this setback hinders Nigeria's recent production increase, highlighting ongoing challenges of theft and vandalism in its oil industry.