Oil Market News, OPEC+, sanctions and price shocks

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US Issues New Sanctions Over Russian Oil Price Cap Violation​

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has imposed sanctions on four entities and identified one tanker as blocked property for violating the price cap on Russian oil. This marks the second price cap enforcement action taken by the OFAC in 2024 as the U.S. is continuing its crack down on price cap violations.

The entities involved in the scheme, along with tanker NS Leader, are alleged to have participated in violating the price cap on Russian oil. The price cap was introduced in December 2022, in a joint agreement between the United States, the G7, the European Union, and Australia. The cap, set at $60 per barrel, was designed to maintain a consistent global oil supply while reducing Russia’s oil revenues which are suspected to be used in funding its war in Ukraine.



Russia's Gazprom - Corrupt politicians and the greed of the west | DW Documentary​

Feb 10, 2024
For decades, European countries have been dependent on Russian gas imports. And they did it to themselves. The biggest culprit? Germany. Only after Russia declared war on Ukraine did the German government realize that Russia has been using gas as a weapon for a long time.

How did this come about? What is Russian President Vladimir Putin's plan? The films take a look behind the scenes of the Russian gas monopoly Gazprom. They show the genesis of an empire: from the collapse of the Soviet Union to the Russian goldrush, the restrictions imposed by newly-elected President Vladimir Putin and his regime’s subsequent arrests and expropriations. The filmmakers shot the film before the start of Russia's attack on Ukraine; a project that would no longer be possible today. The material allows viewers a glimpse into the inner workings of the energy giant Gazprom.


Russia’s Gazprom Awarded Iraq’s Huge Nasiriyah Oil Development​

  • Russian gas giant Gazprom has been awarded the development contract for the supergiant Nasiriyah oil field.
  • The supergiant Nasiriyah oilfield has an estimated 4.36 billion barrels of reserves in place.
  • Beijing has long seen the development of the entire DhiQar province as a key to its strategy to turn Iraq into a client state.
Russian gas giant Gazprom has been awarded the development contract for the supergiant Nasiriyah oil field in Iraq’s strategic southern eastern region close to the main export terminal of Al Fao in Basra. At around the same time, it was announced that China Petroleum Engineering and Construction Corp (CPECC) and PetroChina will complete the critically important Halfaya gas project by the end of Q1 this year. The Halfaya field lies 175 kilometres to the northeast of the Nasiriyah oil field and, together with Basra to the south, form a triangle of influence incorporating several major Russian and Chinese oil and gas developments. These two developments in turn follow the very recent announcement that China is over the halfway mark in completing the construction of Iraq’s biggest crude oil storage facility, also in Nasiriyah. This will also act as a logistical command centre for all of China’s and Russia’s oil and gas projects in southern Iraq and for the build-out of multiple non-oil projects connected to the all-encompassing ‘Iraq-China Framework Agreement’, as analysed in depth in my new book on the new global oil market order.

Full article:

Diamondback and Endeavor Discuss $50 Billion Merger​

Per Reuters, which cited unnamed sources, the value of the deal is $25 billion in cash and stock. The source also said Diamondback shareholders will receive a collective stake of over 50% in the new company. The value of the resulting company could top $50 billion.

The Financial Times noted that if the deal was finalized, it would be a win for Diamondback over Conoco, which has also been a candidate for Endeavor, which the news outlet described as one of the most sought-after shale oil independents.

Also, the FT said Diamondback was “putting the finishing touches” to the deal, suggesting a public announcement of the tie-up is a matter of time. If closed, it would be a big win for Diamondback after its failed attempt to acquire CrownRock last year. Instead, the independent was acquired by Occidental.

Reuters wrote that the company resulting from that tie-up would be the third-largest oil producer in the Permian, behind only Exxon and Chevron. It would also be the largest oil producer operating exclusively in the Permian.

"Their (drilling) inventory is extremely high quality that will make the combined companies a very attractive investment on Wall Street. I imagine it will be well received by the market on Monday," Andrew Dittmar, senior vice president at Enverus, told Reuters.



No Shipments from Russia's Arctic LNG 2 Until March as Sanctions Block Delivery of LNG Carriers​

Despite beginning production of liquefied natural gas (LNG) at the Arctic LNG plant more than 6 weeks ago, Novatek has thus far been unable to ship any product to customers. Initially the company and Russian officials suggested loading of the first cargo would occur in January or February.

However, a lack of required ice-capable gas carriers has further pushed back the first delivery into March.

The company’s new project faces a host of challenges arising from US sanctions announced in November 2023. The blocking measures affect the sale, transport, and transshipment of LNG from the project.

The project’s international partners, including France’s TotalEnergies, China’s state-owned oil major CNOOC and National Petroleum Corp (CNPC), and Japan’s consortium JOGMEC have de facto exited the project leaving Novatek to find new buyers for the LNG.



How Guyana Can Avoid the ‘Oil Curse’​

Feb 16, 2024

Guyana’s economy is the fastest growing in the world, driven by a booming oil sector. The South American nation’s reserves are so vast that Venezuela is escalating claims to its neighbor’s oil-rich Essequibo region. Guyana’s fossil fuel supply poses other challenges, too. While natural resource windfalls can create phenomenal wealth, they can lead to hyperinflation, social and political upheaval and severe income inequality. 8 mins long.


Platts says adding Midland to Brent has gone well, no need for more​

LONDON, Feb 26 (Reuters) - Commodities pricing agency Platts said on Monday its addition of U.S. WTI Midland crude into the global Brent oil benchmark has gone well, and it won't be necessary to add any further crudes for the time being.

Platts, part of S&P Global Commodity Insights, added Midland to its dated Brent price assessment in May 2023, bolstering volumes underpinning the benchmark amid diminishing output of the five North Sea grades, Brent, Forties, Oseberg, Ekofisk and Troll.



Oil heavyweights take aim at Biden’s LNG permitting freeze​

Top oil industry lobbying groups set the stage for a potential lawsuit challenging the Biden administration’s pause in approving new liquefied natural gas exports.

In a petition filed Monday with the Energy Department, the American Petroleum Institute and six other groups say the indefinite delay runs afoul of a legal mandate for the agency to issue permits to broadly export LNG unless there’s been a clear finding the shipments aren’t in the public interest. The petition calls the move “arbitrary and capricious” and says it violates administrative requirements in federal law — a prelude to potential litigation that could raise the same claims.



US funding bill blocks China from buying oil from Strategic Petroleum Reserve​

WASHINGTON, March 3 (Reuters) - A measure in the U.S. funding legislation unveiled by congressional leaders on Sunday would block China from buying oil from the Strategic Petroleum Reserve.

The desire for a hard line on China is one of the few truly bipartisan sentiments in the deeply divided U.S. Congress, and lawmakers have introduced dozens of bills seeking to address competition with China's government.

The issue of SPR sales to China heated up after President Joe Biden, a Democrat, announced in 2022 a sale of 180 million barrels of SPR oil to tame gasoline prices that spiked after Russia's invasion of Ukraine.



Why Gas Is So Expensive In California​

Mar 7, 2024
Drivers in California are no strangers to pain at the pump. The state is home to some of the highest gas prices in the United States. There are several factors that go into what drivers pay at the pump, including refining costs, distribution and marketing, taxes and crude oil prices. High taxes are partly to blame for the high price of gas in California. But, there’s more to the story. Here’s what’s driving gas prices higher and what drivers can do about it.


0:00 Introduction
1:14 Gas prices3:23 What’s next
5:34 Saving at the pump
I guess if it's for sale somebody's gonna buy it

China Buys Up Russian Crude Shunned by India​

Stranded cargoes of Russia’s Sokol crude, previously headed to India but idled off South Korea and Singapore since the U.S. stepped up sanctions enforcement, have started to make their way to China, beginning to clear a backlog of more than 10 million barrels of the grade sitting on tankers at sea.

China has increased purchases of Sokol in recent weeks and its independent refiners are expected to take several such shipments this month, traders have told Bloomberg, which also notes that tankers loaded with Sokol and idling offshore Singapore since December have started moving towards China’s shores.



US pump prices set to jump as refinery outages nip supply, analysts say​

March 14 (Reuters) - U.S. motorists are likely to see gasoline prices turn sharply higher in the coming weeks as major refinery outages have cut supplies ahead of a seasonal jump in demand, analysts said.

The national average price for a gallon of gasoline has increased more than 9% from the start of the year to hover around $3.40 since March 8, the highest since early November, according to data from the motorist group AAA.

Higher gasoline bills lifted consumer prices solidly last month, adding to stickiness in U.S. inflation. That is set to be a key talking point for both the Democrats and Republicans ahead of this year's presidential elections in November.

U.S. gasoline stockpiles fell by 5.7 million barrels to 234.1 million barrels in the week to March 8, the U.S. Energy Information Administration said this week. They are now trailing their five-year seasonal average by more than 2%, the data showed.



Fitch Ratings Cuts Short-Term Gas Price Assumptions, Oil Prices Unchanged​

Fitch Ratings-London/New York/Hong Kong-13 March 2024: Fitch Ratings has cut its 2024 gas price assumptions due to weaker demand and ample supply expectations in the short term. The 2026 Henry Hub assumption has been raised on the grounds that US producers’ reduced capex will lead to lower production in the medium term. Our base-case oil price assumptions are unchanged. Price assumptions for 2027 have been added to the set.




Texas pulls $8.5B from BlackRock in stunning blow to ESG movement​

FIRST ON FOX: The State of Texas is terminating a massive $8.5 billion investment with trillion-dollar asset manager BlackRock over the state's determination that the firm is engaged in a boycott of energy companies.

In an announcement first shared with FOX Business, Texas State Board of Education Chairman Aaron Kinsey said the so-called Texas Permanent School Fund (PSF) had delivered a notice to BlackRock on Tuesday, informing the New York City-based firm of the action. According to Kinsey, the move was made in accordance with a 2021 state law that seeks to distance the state and its large public purse from financial institutions boycotting the oil and gas sector.

"The Texas Permanent School Fund has a fiduciary duty to protect Texas schools by safeguarding and growing the approximately $1 billion in annual oil and gas royalties managed by the Texas General Land Office," Kinsey said in a statement Tuesday. "Terminating BlackRock’s contract ensures PSF’s full compliance with Texas law."

"BlackRock’s dominant and persistent leadership in the ESG movement immeasurably damages our state’s oil & gas economy and the very companies that generate revenues for our PSF. Texas and the PSF have worked hard to grow this fund to build Texas’ schools," he continued. "BlackRock’s destructive approach toward the energy companies that this state and our world depend on is incompatible with our fiduciary duty to Texans."



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