Oil Daily | Middle East Tensions and U.S. Inventory Drop Impact Global Oil Market Dynamics

【Oil-Producing Countries Dynamics】

Battery makers in the U.S. are grappling with a shortage of antimony due to China's export ban, a response to U.S. chip technology restrictions. The mineral, crucial for national security and used in various applications, is in short supply, affecting prices and industry operations significantly. China's dominance in antimony production and processing heightens vulnerability to its policy changes, impacting global pricing and supply chains.

Tokyo Gas, Japan's largest city gas supplier, remains unaffected by the Israel-Iran conflict as it doesn’t import LNG from the Middle East. However, Japan is monitoring the situation closely due to potential global price spikes. The Strait of Hormuz, crucial for LNG exports, remains a focal point of concern for supply disruptions.

Mozambique LNG is set to resume operations after a suspension due to regional violence. The project, Africa's largest LNG venture, has faced delays due to insurgency and environmental opposition. TotalEnergies leads this $20 billion initiative, crucial for Europe's shift from Russian energy. Improved security and international support are aiding project progress.

PetroChina is enhancing its LNG supply flexibility with North American sources, allowing better reselling opportunities amid market shifts. The move comes after the U.S.-China trade war affected LNG supplies. The strategy aligns with global trends of rising LNG demand, especially in Asia, driven by economic growth and environmental goals.

【Latest Oil Policies】

Egypt has enacted an emergency energy plan to cope with fuel shortages following the Israel-Iran conflict. The plan includes halting gas deliveries to industries and using low-quality fuels for electricity. The crisis arose after Israel ceased operations at major gas fields, pushing Egypt to secure alternative energy sources swiftly.

EU's proposed ban on Russian gas imports amid the Ukraine conflict could be revisited if peace is achieved. While aiming to end reliance on Russian energy, Austria suggests flexibility in future reassessments. The EU seeks to bypass expected vetoes through trade law, allowing phased transitions for Hungary and Slovakia.

【Industry News】

China's subsidy program for electric vehicles has been halted in several provinces due to depleted funds. Initially set to last the year, car dealers exploited the system, straining resources. This program, pivotal for China's leading EV market status, faces scrutiny amid global subsidy phase-outs.

The American Petroleum Institute reported a significant drop in U.S. crude oil inventories, impacting market dynamics. The DOE noted an increase in the Strategic Petroleum Reserve, though levels remain below pre-withdrawal figures. Shifts in gasoline and distillate inventories reflect ongoing market adjustments.

【Company News】

TotalEnergies expresses optimism about resuming Mozambique LNG operations. The project, crucial for reducing European reliance on Russian gas, has been delayed due to regional instability. Improved security conditions with international support are facilitating the project's progress.

Shell reports challenges in EV adoption outside China, citing high costs despite government incentives. The economic pressures and market conditions impede consumer decisions, emphasizing the need for price competitiveness.

【Others】

The depreciation risk of Asian currencies is rising amid escalating crude oil prices due to geopolitical tensions. Barclays warns of potential impacts on currencies like Thailand's baht and Korea's won. The ongoing Middle East crisis and its influence on energy markets could significantly affect central bank policies and global economic conditions.