Europe’s Refineries Increase Russian Crude Purchases
Europe’s refineries took in an increasing amount of crude oil last week, tanker tracking data compiled by Bloomberg has shown. Europe’s refineries took in 1.84 million barrels per day of Russian crude oil last week—the third increase in the amount of Russian crude for the refineries in as many weeks. The oil flows from Russia to Europe, including to Turkey, are now the highest they’ve been in nearly two months. The increases mainly came from Russia’s Litasco SA—the trading arm of Lukoil—and Turkey. Lukoil boasts three refineries in Europe—in Italy, Romania, and Bulgaria—and they continue to step up their purchases of Russian crude oil. While the rest of Europe may not be increasing its imports of Russian crude oil—the decreases have definitely slowed, the Bloomberg analysis revealed. The EU agreed to embargo 90% of all of its oil imports from Russia by the end of the year—but perhaps the most damaging aspect of the European Union’s attempt to hit Russia where it hurts—through its oil revenues—comes in the form of an insurance ban. Under the ban—which the UK also signed onto–EU operators will not be allowed to insure or finance the marine transportation of Russian crude oil to other countries. This would cripple Russia’s ability to export crude oil anywhere in the world, according to analysts. Russia, however, said it would provide state assurance under Russia’s trade agreement with other countries, insulating itself from any ban that the EU and UK could cook up. However, most of the world’s ports do not allow tankers to dock unless they carry full-coverage insurance. Russia continues to ship large amounts of Russian crude to China and India as well, with overall Russian revenues from export duty rising 6% last week.
Adani-TotalEnergies deal: Why Big Oil is betting on green hydrogen
After years of dabbling, major oil companies are finally planning the kind of large-scale investments that would make green hydrogen a serious business. They’re chasing a very particular vision of a low-carbon future — multibillion dollar developments that generate vast concentrations of renewable electricity and convert it into chemicals or clean fuels that can be shipped around the world to power trucks, ships or even airplanes. ‘The oil majors have been building multibillion-dollar projects since forever,’ said Julien Rolland, head of power and renewables at commodities trader Trafigura Group Pte Ltd. ‘This green hydrogen, green ammonia stuff will be the new energy industry.’ The plan is well suited to the companies’ natural strengths in project management and their financial heft, but even with those advantages they’re still making a big bet on an unproven technology that could fall short of its potential. “I don’t think any company out there has developed anything to these kinds of scales,” said Gero Farruggio, head of Australia and global renewables at consultant Rystad A/S. Deep Pockets This month has seen a flurry of big news about hydrogen. BP Plc is taking the lead in the $36 billion Asian Renewable Energy Hub, a project that aims to install 26 gigawatts of solar and wind farms over a vast 6,500-square-kilometer (2,500 square-mile) stretch of Western Australia’s Pilbara region, and use the electricity generated to split water molecules into hydrogen and oxygen. Once fully developed, each year it would produce about 1.6 million tons of green hydrogen or 9 million tons of ammonia, which can be used to make fertilizer. TotalEnergies SE has joined Indian billionaire Gautam Adani’s conglomerate in a venture that has the ambition to invest as much as $50 billion over the next 10 years in green hydrogen. An initial investment of $5 billion will develop 4 gigawatts of wind and solar capacity, about half of which will feed electrolyzers producing hydrogen used to manufacture of ammonia. The venture could expand to 1 million tons of annual green hydrogen production by 2030, driven by 30 gigawatts of clean power. It’s only a matter of time before Shell Plc follows with a megaproject of its own, said Paul Bogers, vice president for hydrogen at the company. Shell is looking for a place where there are sufficient wind and solar resources for a large-scale project that would play to its strengths, he said in an interview on the sidelines of the Financial Times Hydrogen Summit in London. ‘The size of these projects isn’t something done by a small startup,’ Bogers said. ‘It requires deep pockets.’ US giant Chevron Corp. is ready to spend billions on a mixture of green and blue hydrogen, which uses a chemical reaction to split natural gas and capture and store the carbon dioxide. Smaller players in the oil market are also getting involved, with Trafigura looking at a number of mid-size green hydrogen projects, such as a 440-megawatt development near Adelaide, Australia.
Private fuel retailers like Jio-bp, Nayara Energy ask retailers to keep pumps open, sell less
Days after being brought under the universal service obligation (USO), private fuel marketing companies like Nayara Energy and Jio-bp have asked their retailers to keep their pumps open and also increased the fuel prices to discourage sales. Petrol pump operators have shared that Jio-bp and Nayara have increased fuel prices between Rs 2 and Rs 7 per litre. This follows the government mandate to bring all petrol pumps under the USO on Friday. This means that the pumps must maintain fuel supplies at reasonable prices during their specified working hours. Fuel marketers have been witnessing unsustainable losses on each litre of petrol and diesel they are selling as state-run firms have not hiked retail prices for about two months now, even as the crude prices in international markets are on the rise. According to the industry insider quoted by Economic Times, private players slash the supply to dealers so as to minimise their losses while keeping the prices higher. Universal service obligation “Now the authorised entities have been obligated to extend the USO to all the retail consumers at all the retail outlets. This has been done with an objective to ensure higher level of customer services in the market and to ensure that adherence to the USO forms a part of the market discipline,” the statement said. The government did so after there were reports of long queues outside several state-owned companies’ pumps in some states. However, petrol pump operators are of the view that this will only increase their costs while sales will not be much owing to higher prices. “This move by the government helps little. The company has increased diesel price by Rs 5 a litre and petrol price by Rs 7 a litre. Who will come to buy fuel from us at this price?” a Jio-bp retailer said on the condition of anonymity. Another retailer of a private fuel marketer said, “We have been asked not to barricade our outlets and that company officials will be visiting our outlets to keep a check.” Meanwhile, an industry body representing private and public oil refiners and retailers such as Jio-bp, Nayara Energy, Indian Oil, BPCL and HPCL has written to the government about unsustainable losses amid a price freeze announced by the government. The Federation of Indian Petroleum Industry (FIPI) in its letter to the oil ministry said selling petrol at a loss of Rs 14-18 per litre and diesel Rs 20-25 per litre below soaring crude oil market prices is unsustainable. The industry body has sought government intervention to create a viable investment environment, reported PTI.