Oil markets are bracing for the next big external shock as Trump’s trade war with China continues to escalate and talks of a potential nuclear deal with Iran threaten to bring fresh supply to markets.
– The start of trade negotiations between the United States and Asia Pacific countries has been marked by evident interest in US LNG projects, whilst the likes of South Korea and Japan kept relatively mum about crude.
– Taiwan’s President Lai Ching-te announced that Taipei would seek to increase the share of US LNG imports from the current 10% to 33%, potentially discontinuing some term supplies from Australia and Qatar.
– South Korea, too, is considering a 20-25% increase in US LNG imports, currently accounting for 12% of its liquefied gas needs, seeking to wind down Qatari contractual commitments that are linked to Brent rather than traded against JKM or Henry Hub.
– China is moving in the opposite direction, completely halting its imports of US LNG in March and signing three long-term deals with the UAE for the supply of liquefied gas over the next 10 years, seeking further term options in the region.
Market Movers
– US investor James Cameron has offered $5 billion to buy Kazakhstan’s mining giant Eurasian Resources Group, 40% part-owned by the Kazakh government, as the miner intends to expand into rare earths.
– UK energy firm BP (NYSE:BP) has become the only foreign oil company to bid in India’s OALP-IX bidding round, landing the most coveted GS-OSHP block alongside Indian partners Reliance and ONGC.
– US oil major Chevron (NYSE:CVX) is reportedly looking to divest some of its upstream interests in Angola, potentially exiting Block 14K that currently produces some 42,000 b/day across Angola and Congo.
– Argentina’s second-largest oil company, Vista Energy (NYSE:VIST), bought Petronas’ 50% stake in the La Amarga Chica shale play in the country’s Vaca Muerta basin for a total of $1.5 billion.
Tuesday, April 22, 2025
Oil producers are preparing for another external shock to oil markets as Brent futures took some collateral damage from Monday’s equity sell-off and remain pressured by the prospect of a potential US-Iran nuclear deal. For the time being, the $66-67 per barrel price for ICE Brent seems to be a temporary resting place for crude before the next big thing happens.
Rome Hosts High-Level Nuclear Talks. Negotiators from the United States and Iran met in Italy’s capital, Rome, over the weekend to continue negotiations started a week ago in Oman over Tehran’s nuclear programme, with both sides lauding the progress the talks had made over the past week.
US Wants to Make the Gulf Great Again. As the US Bureau of Ocean Energy Management recently upped the Gulf of America’s untapped reserves to 5.77 billion barrels, the Trump administration has launched a new 5-year offshore oil and gas leasing plan, which might include blocks in the Arctic.
Gold Continues to Edge Higher. Amidst widespread speculation of Donald Trump wanting to fire US Fed chair Jerome Powell, gold prices touched $3,500 per ounce for the first time on record in Tuesday’s intraday trading, up 32% since the beginning of the year.
China Loads Up On Middle Eastern LNG. China’s state-controlled oil majors CNOOC and Zhenhua Oil, as well as privately owned ENN Natural Gas, have all signed term deals with the UAE’s state oil company ADNOC, ranging from 5 to 15 years and coming into effect as early as 2026.
Egypt’s Hyped Exploration Boom Fails. An array of international energy firms have exited their respective concessions in Egypt’s offshore zone in the Red Sea after US oil firm Chevron relinquished its stake in Block 1, with rumours also suggesting Shell is set to give up on the adjacent Block 3.
P66 Fights Back Against Activist Investor. Leading US refiner Phillips 66 (NYSE:PSX) has issued a letter demanding that activist investor Elliott Investment Management back down from its push to break up the company due to a conflict of interest, as it is separately seeking to buy distressed Citgo.
India Slaps Tariffs on Chinese Steel. The government of India announced a 12% tariff on some steel imports from China that would be valid for the next 200 days, arguing that a flood of cheaper Chinese steel products put domestic mills under immense pressure and forced job cuts.
South Korea Dreams Big to Impress Trump. South Korea’s leading steel manufacturer, Posco Holdings (NYSE:PKX), is reportedly planning to join its peer, Hyundai Motor Group (KRX:005380), to build a $5.8 billion steel mill in the US, expected to start operations in 2029 in Louisiana.
Using Oil, Russia Seeks to Stay in Syria. The ouster of former Syrian President Bashar al-Assad has led to a complete halt in Iranian oil deliveries to the Levantine nation. In its stead, Damascus has opted for Russian crude and diesel deliveries as Moscow wants to keep its Tartus naval base.
China’s Copper Grows Despite Low Profits. Chinese production of refined copper surged to 1.25 million tonnes in March, up 8.6% from a year ago and hitting a new all-time monthly high, with minimal profitability somewhat cushioned by higher gold prices, a co-product of copper smelting.
Saudi Aramco Eyes Automotive Roles. Saudi Aramco, the national oil firm of Saudi Arabia, inked a deal with China’s leading EV producer BYD (SHE:002594) to develop new energy vehicle technologies, seeking to benefit from the proliferation of battery-powered cars across Asia.
Heavy Rains Resuscitate Rhine Shipping. Easter precipitation has finally allowed German shippers to transport full cargoes along the River Rhine, the country’s main energy transportation artery, with water levels in Kaub rising by 40% to 125cm.
Morocco to Build an LNG Import Terminal. The North African country of Morocco is preparing to begin tendering procedures for its first-ever liquefaction terminal, to be located in the port of Nador, as its gas requirements are expected to soar from 1 Bcm currently to 8 Bcm by 2027.
By Michael Kern for Oilprice.com
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