Oil Prices Fall as Trump Inches Toward Victory
Crude oil prices trended lower in midmorning Asian trade today, pressured by the first results from the U.S. elections and the latest weekly U.S. oil inventory report from the American Petroleum Institute. At the time of writing, Brent crude was trading at $73.68 per barrel, with West Texas Intermediate at $70.26 per barrel. Both were down by over 2.4% from the market’s opening. “The initial signs have been favourable for the Republicans and while it’s still early days, U.S. yields and the U.S. dollar are both trading higher,” IG analyst Tony Sycamore told Reuters. “This in turn is weighing on the crude oil price which has had a good run in recent sessions,” he added. “US foreign policy is shaping up to be a potential factor for oil markets in the near term,” especially with regard to Iran, Commonwealth Bank of Australia analyst Vivek Dhar told Bloomberg. He added that “markets now must consider whether OPEC+ will perennially be forced to push their decision to reverse their voluntary oil production cuts.” “If Trump wins, it is bullish for the oil market in the short-term due to prospects of tighter sanctions on Iranian oil,” ANZ Research analyst Soni Kumari told Reuters. Bloomberg meanwhile reported that oil traders are piling into bullish bets in case of a spike in Middle Eastern tensions that could lead to much higher oil prices. The report cited data showing that on Monday alone, some 10 million barrels worth of call options for December were traded at a price spread of $90/$100 per barrel. The expiry date for the contracts is November 15. The Monday trade volume is an extension of a rather bullish October: interest in call options on higher oil prices reached a record high last month, per Bloomberg, which also noted that even after the price retreat following Israel’s retaliatory strike against Iran, premiums on call options versus put options remain at the highest since Russia’s invasion in the Ukraine in February 2022.
HPCL to Boost Iraqi Oil Imports in 2025
According to a report by Reuters, India’s state-owned Hindustan Petroleum Corp Ltd plans to increase its yearly oil import agreement with Iraq to 100,000 barrels per day (bpd) in 2025, which would represent a 43% increase from this year. According to the report, HPCL has an annual agreement to purchase 70,000 barrels of Iraqi oil per day in 2024. As it activates certain residue upgrade units at its 274,000 bpd Vizag refinery in Southern India, the company’s imports of crude oil are expected to increase in the upcoming year. To reach 300,000 bpd, the refinery is being expanded. In western India, HPCL also runs the Mumbai refinery, which produces 190,000 barrels per day. By the end of December or the beginning of next year, it also plans to begin operations at its 180,000 bpd Barmer refinery in Rajasthan, a desert state in India.
Subsidies to oil & gas sector reduce 85% to $3.5 bn in 10 years: MNRE
Subsidies to the oil & gas sector saw a reduction of 85 per cent from a peak of $ 25 billion in 2013 to $ 3.5 billion by 2023, according to an official note on Monday. Since 2010, India has steadily reformed its fossil fuel subsidies, adopting a “remove, target, and shift” approach, the Ministry of New and Renewable Energy (MNRE) said. The ministry said, as per a report of Asian Development Bank (ADB), structured approach, including adjusting retail prices, tax rates, and subsidies on select petroleum products collectively reduced fiscal subsidies in the oil and gas sector by 85 per cent from a peak of $ 25 billion in 2013 to $ 3.5 billion by 2023. “A significant step in this journey was the gradual phasing out of petrol and diesel subsidies, coupled with incremental tax hikes. These reforms created fiscal space for greater government support in renewable energy initiatives, electric vehicles, and critical electricity infrastructure,” it said. From 2014 to 2017, tax revenues were further boosted by rising excise duties on petrol and diesel, implemented strategically during a period of low global oil prices. The additional revenues were then redirected toward targeted subsidies that expanded access to liquefied petroleum gas (LPG) for rural communities, addressing both environmental goals and social welfare. India’s fossil fuel subsidy reforms mark a decisive shift, channelling resources toward sustainable energy and laying the foundation for cleaner energy alternatives. The petrol and diesel subsidies were phased out gradually from 2010 to 2014, followed by measured tax hikes on these fuels till 2017, the report said. These moves were made to create fiscal year breathing room for renewable projects, allowing the government to channel funds into clean energy initiatives at an unprecedented scale, it added. Subsidies for solar parks, distributed energy solutions, and state-owned enterprises by the government reflects its purpose and commitment to clean power, setting a strong example for others looking to shift toward a more resilient energy future, the report noted. India steadily whittled down its fossil fuel support, opening doors to new investments in solar power, electric vehicles, and a stronger energy grid, it said.