Oil Daily | Sinopec's Major Shale Gas Discovery and EU-U.S. Energy Trade Pact Highlight Industry Shift

【Global Oil Supply and Demand】

China’s Sinopec has discovered over 100 billion cubic meters of shale gas in central-southwestern China, highlighting significant resource potential that could boost national energy security. Despite challenging geology, Sinopec's test wells have shown promising results, underscoring China's efforts to reduce reliance on foreign hydrocarbons.

The United States and the European Union have established a trade framework, committing Europe to purchase up to $750 billion in U.S. energy by 2028 while capping most tariffs at 15%. This agreement aims to diversify Europe’s supply mix following the Nord Stream disruptions.

【Oil-Producing Countries Dynamics】

Angola's oil production fell below 1 million bpd in July, marking a challenge in boosting output despite leaving OPEC to evade production caps. Output struggles continue amidst underinvestment and mature oilfields, with the country now focusing on natural gas developments.

Norwegian firm DNO ASA resumed production at its Kurdistan oilfields after drone attacks temporarily halted operations. Resuming gross production, DNO plans to return to pre-pipeline shutdown levels while local sales secure revenues despite ongoing regional export disputes.

【Latest Oil Policies】

The U.S. sanctioned a Greek shipping entrepreneur and Chinese storage operators to disrupt Iranian oil exports. Sanctions target nearly a dozen vessels and operators aiding Iranian oil sales, impacting revenue linked to Iran’s weapons programs. China remains the primary customer for Iranian oil.

Poland's President Karol Nawrocki vetoed a green energy bill easing wind farm construction, bundled with an energy price freeze, suggesting a new proposal separating these issues. This veto reflects internal political conflicts and could impact Poland's renewable energy expansion goals.

【Industry News】

The U.S. Commerce Department initiated a Section 232 probe into imported wind turbines and parts, indicating potential new tariffs. This investigation could raise project costs and impact the U.S. wind industry's heavily import-dependent supply chains, potentially altering project financing and pricing structures.

【Company News】

Sinopec, China's largest refiner, reported a 36% drop in first-half profit due to lower oil prices and weak margins. The company attributes the decline to falling domestic fuel demand, driven by alternative energy. Sinopec aims to diversify crude sources and optimize procurement to counter these challenges.