Oil Daily | Middle East Oil Unaffected by Tensions; Houthi Attacks Raise Shipping Route Concerns

【Global Oil Supply and Demand】

Uncertainty and cost pressures hinder global adoption of low-carbon hydrogen despite increased investment, reports the IEA. Hydrogen demand rose by 2.5% to 97 million tons in 2023, mainly in refining and chemicals. Low-emissions hydrogen remains minimal, with production delays threatening project pipelines. Clearer demand signals and regulatory support are needed.

India plans a natural gas hub to boost the commodity's market, increasing its energy mix share from 6% to 15% by 2030. This aims to support emission reduction goals. Achieving targets requires increased domestic production, LNG imports, and infrastructure enhancements, according to the Institute for Energy Economics and Financial Analysis.

Oil supply from the Middle East is unlikely to be impacted by regional conflict, says Gunvor's chairman. Despite geopolitical tensions, international crude prices show muted reactions due to concerns over demand and existing spare production capacity at OPEC. Analysts believe geopolitical risks are already factored into oil prices.

【Oil-Producing Countries Dynamics】

Malaysia continues oil and gas exploration in the contested South China Sea despite pressure from China. China's Coast Guard frequently patrols Malaysian-claimed waters, but Malaysia expands its exploratory activities. Potential reduction in China-Philippine tensions might increase pressure on Malaysian hydrocarbon production.

【Latest Oil Policies】

Germany remains undecided on supporting EU tariffs on Chinese EVs due to potential trade war fears. The EU imposed provisional tariffs on imported EVs, but Germany and Spain may abstain from the vote. German automakers, integrated in global supply chains, prefer negotiated solutions to tariffs.

【Industry News】

The Iran-aligned Houthis attacked two vessels in the Red Sea as Middle Eastern tensions rise. The Cordelia Moon and Minoan Courage sustained damage but reported crews are safe. The attacks follow Israeli strikes in Yemen, escalating regional conflict and potentially impacting shipping routes.

【Company News】

Big traders of U.S. WTI Midland crude, now part of the dated Brent benchmark, rerouted Europe-bound cargoes using a 'bookout' option. This move could influence dated Brent prices, although no conclusive link has been established. Platts plans no changes to its assessments despite the rerouting.