Bharat Petroleum may join Reliance, IOCL to secure oil from Venezuela
India’s state-owned oil refiner Bharat Petroleum Corp may be the latest to join the list of local companies buying Venezuela oil after the US lifted sanctions in October. BPCL is looking at buying Venezuela oil, its head of refineries Sanjay Khanna said at an event on Wednesday. “Our refineries are capable of processing Venezuelan oil and we have given our international trade (department) okay to buy it,” Khanna said in an industry event. However, the imports from Venezuela will not be a threat to BPCL’s Russian oil imports, he added. Until now, Reliance Industries, Indian Oil Corp, and HPCL-Mittal Energy from India have booked cargoes of Venezuelan oil since the sanctions were lifted. India, world’s third-largest oil buyer, used to buy a lot of oil from Venezuela before the US imposed sanctions. These sanctions made Indian oil companies lose business to Chinese competitors in 2021. Since the US eased sanctions temporarily in October on Venezuela’s oil industry, people in the oil trade have been waiting to see if India will start buying oil from Venezuela again. Before the sanctions, India used to buy about 10 million barrels of oil from Venezuela every month. A company called Reliance bought an average of five very big tankers of oil from Venezuela every month during 2018-2019, according to an analyst named Viktor Katona from Kpler, a company that studies this information. Bloomberg reported earlier this month that private refiner Reliance Industries had arranged for the booking of two supertankers, namely C. Earnest and C. Genuine. These tankers are set to load crude oil shipments from Venezuela from December to early January. Another arrangement involves the Very Large Crude Carrier Eucal, hired by Reliance to transport Venezuelan crude to India in early December. Altogether, these three vessels have the capacity to carry up to 6 million barrels of crude oil.
Oil Prices Continue to Fall Ahead of the EIA Report and Fed Meeting
Crude oil prices began the day with a loss in Asian trading today as concerns about oversupply and weak demand continued to weigh on prices. Traders are also waiting for the outcome of a Fed meeting today and the Energy Information Administration’s latest weekly oil inventory report. Reuters noted in a report that recent economic data had reinforced expectations that the Fed was not going to start cutting rates in early 2024, which was translated as a bearish factor for oil since higher interest rates discourage increased consumption. Meanwhile, in more bearish news, Russian oil exports hit the highest since July, according to ANZ analysts cited by Reuters, which deepened doubts about how much of the recently agreed additional OPEC+ output cuts would actually be implemented come January. News that U.S. oil production is rising did not help matters, either, adding fuel to oversupply concerns that have flipped the futures market into a contango until the middle of 2024, according to Bloomberg. “A US-led bump in non-OPEC supply and doubts over OPEC compliance colliding with some prospects of demand softening,” is how Mizuho Bank’s Asia head of economics and strategy, Vishnu Varathan described the situation to Bloomberg. Oil prices have shed about 25% since September despite OPEC+ efforts to put a floor under benchmarks. WTI is currently trading below $70 per barrel while Brent crude has slipped below $75 per barrel. Normally, falling crude oil prices would encourage more consumption but right now it seems there is serious doubt this will be happening anytime soon. At the same time, supply perceptions have swung from deficit to oversupply in a matter of months, mostly on the back of production updates outside OPEC and especially in the U.S., where the EIA said oil supply was seen growing by 300,000 bpd in 2024.
India Aims for 20 Percent Ethanol Blending in Petrol by 2025-26
The Indian government has successfully met the target of achieving a 10 percent average blending of ethanol in petrol under the Ethanol Blended Petrol (EBP) Programme in June 2022, surpassing the scheduled target of November 2022 by five months. The next ambitious goal is set at achieving 20 percent blending of ethanol in petrol by the Ethanol Supply Year (ESY) 2025-26. This information was provided by Rameswar Teli, the Minister of State in the Ministry of Petroleum and Natural Gas, in a written reply in Rajya Sabha. According to the ‘Roadmap for Ethanol Blending in India 2020-25,’ meeting this target is estimated to replace approximately 10.16 billion litres of petrol with ethanol, resulting in significant annual savings of about USD 4 billion. Additionally, the establishment of the Global Biofuels Alliance (GBA) is expected to further propel the global biofuel market by addressing challenges, promoting sustainability, and facilitating knowledge-sharing .
Qatar’s LNG expansion to boost 2024 credit outlook – Standard Chartered
Qatar has a strong credit outlook for next year due to its liquefied natural gas (LNG) expansion and improving public finances, according to Standard Chartered. In its latest MENA Credit Outlook 2024, the bank noted that the Gulf state’s economic growth will continue next year, supported by positive indicators. During the first nine months of the year, Qatar recorded a fiscal surplus for $11.5 billion, approximately 4.9% of the GDP. Contributing to the country’s positive outlook are the country’s efforts to increase LNG production. This is in addition to a decline in government-funded capex following a period of elevated spending in the run-up to the 2022 FIFA World Cup. The bank estimates that Qatar’s debt-to-GDP should drop further, as the government continues to use sizable fiscal surpluses towards debt repayment. LNG expansion Last October, state-owned QatarEnergy started work on the North Field expansion project, which will raise Qatar’s LNG output capacity from 77 million tonnes per annum (mtpa) to 126 mtpa by 2026. “Qatar’s strategic investments in LNG production and strong fiscal indicators reinforce our positive outlook for the nation’s continued economic growth in 2024,” said Muhannad Mukahall, CEO and Head of Corporate, Commercial and Institutional Banking, Qatar, Standard Chartered. The report also noted that banks in Qatar are seeing a decline in foreign liabilities following regulatory directives by the central bank and slowing credit growth. Qatar posted strong economic growth in 2022, driven by the World Cup boom. Last November, the International Monetary Fund (IMF) said the country’s economic growth has normalised this year and that the trend will continue in the near term. Medium-term outlook will be favourable, supported by the LNG production expansion and “intensifying reform efforts”, the IMF said.
India May Ramp Up its Oil Purchase from UAE
The expectations have risen to overcome the dependence on Russia because of high Russian shipments of crude oil since Indian refiners started depending more on Russian crude in 2022. Yet Russian oil shares overall two-thirds imports of India’s oil demands. India is expected to surge its oil purchase from the United Arab Emirates in the upcoming months following discussions between the two countries on the sidelines of the ongoing COP 28 summit in Dubai. Historically, the UAE has been considered India’s third largest source of crude. In 2021, UAE, exported almost 58.5B dollar in crude petroleum. The main destinations of exports were Japan, India, China, Singapore, and Thailand. The UAE economy is heavily reliant on revenues from petroleum, and natural gas, especially in Abu Dhabi.
Gas firms seek price deregulation as city distribution targets fall behind
Irked by the slow rollout of city gas distribution (CGD) networks in India, the Petroleum and Natural Gas Board (PNGRB) has told companies to get going or risk having their bank guarantees seized. In turn, the companies have told the regulator they are wary of committing investments without the government saying the time period in which natural gas will be offered a free play in the economy, sources said. Oil and gas companies have made bank guarantees worth Rs 350 billion, and PNGRB has not said whose money could be seized but slow pace is rife.