Oil Daily | Russia Reroutes Fuel Oil to Saudi Arabia, India Amid Western Sanctions and Competitive Pricing

【Global Oil Supply and Demand】

China's LNG imports have been declining for ten consecutive months due to high inventories, increased pipeline gas supply, and rising domestic production. Reduced industrial demand and a mild winter contributed to the first decline in LNG imports since 2022, potentially benefiting Europe as they aim to build winter inventories.

Crude oil trade between UAE and Sudan is affected by a maritime trade embargo imposed by the UAE following severed diplomatic ties. The ban forces oil tankers to change destinations, impacting trade flows between Africa, the Middle East, and Asia.

India's gas-fired power plants are being reconsidered for use during peak demand months as an insurance policy despite their high costs, reflecting the ongoing challenges in balancing coal, renewables, and gas in the power mix.

【Oil-Producing Countries Dynamics】

Nigeria seeks to re-establish Petrobras in its oil fields, praising the Brazilian company’s expertise in deepwater exploration. Petrobras previously exited Nigeria but is exploring international expansion, with Nigeria among its potential targets.

Venezuela is deploying vessels and drones to the Gulf of Venezuela in response to the U.S. deployment of warships near its coast, amid ongoing geopolitical tensions involving Chevron's crude exports to the U.S.

Russia has redirected fuel oil exports to Saudi Arabia and India due to Western bans, with Saudi Arabia and India increasing their intake driven by domestic energy needs and competitive pricing.

【Latest Oil Policies】

The UAE banned maritime interactions with Sudan's Port Sudan as part of an embargo, affecting crude oil trade. The directive aims to protect UAE's strategic interests amid Sudan's accusations of aggression in the ongoing civil conflict.

Japan saw fossil fuels' share in power supply drop below 60% for the first time, increasing nuclear and solar energy generation as part of its decarbonization efforts following the Fukushima disaster.

【Industry News】

China’s industrial sector shows mixed performance, with manufacturing delivering profits despite a contraction in the mining sector. The divergence in upstream and downstream activities reflects structural and demand challenges, with oil demand improving month-on-month despite annual declines.

India is assessing the viability of gas plants as backup during peak demand months despite gas's declining role in the power mix. Adjustments in contract terms are being considered to manage costs and supply volatility.

【Company News】

PetroChina agreed to acquire gas storage facilities from CNPC, aiming to enhance its capacity and control over the energy market as gas remains a growth area despite declining oil revenues.

PetroChina reported a 5.4% decline in first-half profit due to lower oil prices and suppressed domestic fuel demand, with a notable impact from the rise in new-energy vehicle sales. The company anticipates stable gas demand and continued competition from alternative energies.

India’s ONGC plans to launch a trading unit for crude and refined petroleum products, aiming to manage 100 million tonnes of oil within the group amid recent price declines and flat production.

【Others】

The American Petroleum Institute reported a reduction in U.S. crude oil inventories, slightly less than anticipated. Gasoline and distillate inventories also saw declines, reflecting underperformance against historical averages.

China’s oil consumption is expected to peak by 2025, driven by petrochemical needs rather than road fuels, according to major analysts and oil companies. PetroChina and Sinopec anticipate a flattening demand growth through 2025.