Oil Daily | Saudi Aramco Discovers New Reserves, Partners with Sinopec Amid Challenging Market Conditions

【Global Oil Supply and Demand】

The International Energy Agency warns of slower AI-driven data center growth due to trade wars and macroeconomic uncertainties. Bottlenecks and a tight supply chain could delay capacity expansion compared to ambitious industry projections, impacting electricity demand forecasts by 2030. Headwinds such as tariffs and economic challenges threaten AI deployment advances.

The European Union plans to increase LNG purchases from the U.S. to avoid tariffs, aligning with its green transition. President Trump demands the EU to buy $350 billion worth of U.S. energy to reduce the trade surplus. The EU is scheduled to install record wind and solar capacity to lower energy costs.

Chinese and EU officials seek stronger trade ties amid U.S. tariffs, despite tensions over Chinese goods. The EU discusses restricting Chinese imports in energy and EV sectors to foster domestic production. With China's dominance in supply chains, closer cooperation poses challenges and benefits for EU's energy transition.

U.S. refiners are not investing in domestic crude expansion due to Trump’s tariff war, fearing a global recession. Refinery margins weaken, and top refiners lose market value since tariff announcements. Optimism remains for potential Federal Reserve rate cuts, offering some relief amid industry challenges.

Equinor forecasts weak Q1 results for liquid and LNG trading, influenced by MMP division costs and Hammerfest LNG maintenance. Norwegian operations see stable realized liquids prices, while U.S. natural gas prices rise. Shell predicts lower Q1 LNG production due to cyclones, while ExxonMobil expects higher earnings.

【Oil-Producing Countries Dynamics】

Saudi Aramco announces new oil and gas discoveries, signaling expansion efforts despite challenging price environments. Aramco collaborates with Sinopec to expand petrochemical production, aiming to convert up to four million barrels of crude oil into petrochemicals by 2030. This aligns with Saudi Arabia's strategy to enhance its global energy market role.

Venezuela's military is on high alert amid accusations of foreign-plotted attacks on ExxonMobil in the contested Essequibo region. The territorial dispute with Guyana intensifies, involving significant oil reserves. The situation raises energy security concerns, complicating geopolitical stability and investor risks.

Chevron increases triple fracs in the Permian basin to cut fracking costs and times, despite reduced capital expenditures. Simultaneous fracking boosts efficiency, crucial amid WTI price declines. Chevron targets more efficient production, reflecting industry-wide need for cost-effective drilling practices amid market pressures.

【Latest Oil Policies】

The EU considers buying more U.S. LNG to avoid tariffs, balancing energy imports with its green transition goals. Trump demands significant LNG purchases to address trade surplus, pressuring the EU's energy strategy and market dynamics.

President Trump pauses tariffs for 90 days, excluding China, sparking temporary oil price increases. Despite tariff relief, industry fears persist due to China's growing demand and U.S. oil patch concerns about breakeven levels. The global tariff war impacts oil markets and industry strategies.

【Industry News】

Equinor anticipates weak trading results for liquids and LNG in Q1, attributing costs to CCS appraisal wells and maintenance. The company shares preliminary updates, reflecting broader industry challenges amid fluctuating oil and gas prices.

【Company News】

Saudi Aramco expands petrochemical production with Sinopec at Yasref, integrating new units into the complex. The partnership aims to diversify crude oil usage, supporting Aramco's downstream strategy and boosting petrochemical demand while transportation fuel demand plateaus.

Venezuela accuses foreign actors of plotting against ExxonMobil in the disputed Essequibo region, escalating tensions. The dispute involves large offshore oil reserves and regional security concerns, impacting energy stability and foreign investor confidence.

Chevron intensifies triple fracs in Permian basin wells, enhancing fracking efficiency and reducing costs. The approach aids in maintaining production amidst declining oil prices, reflecting industry's focus on cost-effective drilling amid market challenges.

【Others】

The IEA warns of AI adoption slowdowns affecting electricity demand forecasts, citing economic uncertainties and supply chain bottlenecks. This poses challenges for data center growth and energy sector efficiency improvements, with trade wars influencing projections.