Oil Prices Rise as U.S.-Iran Tensions Simmer
Oil prices rose by 1% early on Wednesday as the U.S.-Iran tensions continue to rise and Israeli Prime Minister Benjamin Netanyahu is set to meet U.S. President Donald Trump. In morning trade in Europe on Wednesday, the U.S. benchmark, WTI Crude, was up by 1.39% to $64.85 per barrel. The front-month futures traded at $64.85. The international benchmark, Brent Crude, traded very close to the $70 per barrel mark, as it was up 1.29% on the day to $69.69. This week, the U.S.-Iran tensions and negotiations have been in the spotlight, with the oil market assessing the chances of a deal. Israel’s Netanyahu said before departing for Washington, D.C., “I will present to the president our outlook regarding the principles of these negotiations.” Israel is expected to ask President Trump to seek a deal that would put an end to Iranian uranium enrichment, and limit its support for Hamas and Hezbollah. “The Prime Minister believes that any negotiations must include limiting ballistic missiles and ending support for the Iranian axis,” Netanyahu’s office said ahead of his trip to the U.S. President Trump has warned the U.S. could send a second aircraft carrier to the region if the talks fail. The ongoing tensions have supported oil prices this week, although they wobbled in Tuesday trade after the American Petroleum Institute (API) estimated that crude oil inventories in the United States increased by a whopping 13.4 million barrels in the week ending February 6. The estimated increased more than offset the prior week’s draw of 11.1 million barrels. Reports that the U.S. was considering seizing sanctioned tankers carrying Iranian oil have also pushed prices higher. But such an action with Iran “would be escalatory and would likely see the market needing to price in an even larger risk premium than it already is, given the potential for Iranian retaliation,” ING’s commodities strategists Warren Patterson and Ewa Manthey said in a Wednesday note.
China’s Clean Energy Boom Still Rests on Coal, Oil, and Gas
Over the past decade, China’s renewable energy and related clean technologies have emerged as the fastest-growing sectors of the economy, significantly outpacing the overall economy. Last year, China’s clean energy investments hit a record 7.2 trillion yuan ($1 trillion), with the sector accounting for over 11% of GDP and growing three times faster than the overall economy. Indeed, China’s “new three” namely solar, batteries, and electric vehicles contributed over 90% of the rise in the country’s overall investments. China continues to be particularly dominant in solar and wind energy technologies, with the nation installing 315 GW of solar and 119 GW of wind, exceeding the rest of the world combined. Still, fossil fuels remain critical to China’s energy security and industrial base, providing over 80% of primary energy and over 60% of electricity production. Coal is the ornerstone of China’s energy sector, providing over 50% of electricity generation and roughly 60-70% of total primary energy consumption. China consumes over 4 billion tons of coal annually, accounting for more than 50% of the entire world’s coal consumption. In 2023, data indicated that China’s coal consumption continued to rise, with imports reaching a record 474 million tons. This makes China the world’s largest coal consumer and importer. Despite massive investments in renewables, coal continues to play an outsized role in fueling the economy, ensuring energy security and powers industrial sectors like steel, with new coal-fired power projects continuing to be built at a rapid clip. Construction of new coal-powered plants hit a 10-year high in 2024, with the country initiating development of 94.5 gigawatts (GW) of new coal-power capacity and also resumed building of 3.3 GW that was previously suspended. The heavy reliance on coal has led to significant air pollution and carbon emissions, despite China’s President Xi Jinping pledging to “strictly control” coal expansion and “phase down” consumption. And oil, too, remains critical to China’s energy security and industrial growth, representing roughly one-fifth of its energy mix and powering transport and petrochemical sectors. China consumes approximately 16.3 to 16.4 million barrels per day (b/d) of oil, making it the world’s second-largest consumer. As of 2024, the country imported roughly 11.1 million b/d of crude oil to meet this demand, representing about 74% of its consumption. Projections for 2025 suggest total oil demand averaged around 16.74 million b/d. Russia, Saudi Arabia, and Iraq are China’s key suppliers of crude, with imports from Russia exceeding 2 million barrels per day (bpd), representing roughly 20% or more of China’s total imports. Around 900,000 bpd of Russian oil is delivered via pipeline, with the rest coming by sea, often using a “shadow fleet” to bypass Western sanctions. Not surprisingly, China is also aggressively expanding domestic oil production, with output reaching a record high of 4.3 million b/d in 2025 from 3.8 million b/d in 2020, thanks to intensified exploration, particularly in offshore and unconventional reserves. Offshore oil production is a major driver of China’s domestic oil production, accounting for over 60% of new output for five consecutive years in large part due to increased investment by state-owned companies, including CNOOC, CNPC, Sinopec. The push is part of the 2019-2025 “Seven-Year Action Plan” which focused on increasing upstream, domestic production to ensure energy security, even with the parallel push for green energy and electric vehicles. However, the high cost of extracting from mature fields means domestic output cannot keep pace with demand, leaving a large gap that must be filled by imports. Meanwhile, natural gas acts as a critical “bridge fuel” in China’s energy transition, helping to reduce reliance on coal, improve air quality and balance intermittent renewable energy. As the world’s third-largest consumer of natural gas, China is growing its natural gas usage for industrial, residential, and power generation, with projections indicating that gas will play a major role in achieving carbon neutrality. China’s natural gas consumption hit ~428 billion cubic meters (bcm) in 2024, marking a steady increase from 330 bcm in 2020. China relies on a mix of domestic production and imports, with demand driven largely by the industrial and city-gas sector. China’s imports of Liquefied Natural Gas (LNG) imports are projected to rebound in the current year, with projections of up to a 10% Y/Y increase to nearly 76 million metric tons, following a ~10% decline in 2025 due to high domestic production and weaker demand. China is the world’s largest importer of LNG, with Australia, Qatar, and Russia supplying the bulk of imports. China also imports large amounts of gas via pipeline, primarily from Russia and Turkmenistan via the Power of Siberia (Russia) and the Central Asia-China Gas Pipeline. That said, China is poised to maintain its dominance in the global clean energy sector not only due to heavy investments and technological leadership but also due to its rare earths hegemony. China maintains a commanding, near-monopolistic hold on the global rare earth elements (REEs) supply chain, controlling approximately 60-70% of mining and over 90% of processing and refining. Neodymium and dysprosium are essential for high-strength permanent magnets in electric motors, significantly increasing power density and efficiency. Permanent magnets (using neodymium, dysprosium, and praseodymium) are used in wind turbines to improve performance, particularly for offshore, direct-drive turbines that require no gearbox. While not used directly in PV modules, REEs like yttrium, lanthanum, and cerium are used in specialized solar inverters, sensors and converter components.
India’s petroleum reserves can last 74 days in case of global turbulence: Oil Minister Puri
India’s strategic petroleum reserve can last 74 days to meet the demand arising out of any global turbulence, Oil Minister Hardeep Singh Puri informed the Rajya Sabha on Monday. Replying to supplementaries during Question Hour, the minister said for any country like India, which is growing at a phenomenal pace, there must be a very viable and secure reserve, so that it is not in a vulnerable situation in the case of global turbulence. He said India has several refineries both in the West coast as well as the East. According to the International Energy Agency (IEA), today we are the world’s third largest consumer of crude oil. We have the world’s fourth largest refining capacity – currently around 260 million metric tonne per annum going on to 320 million metric tonne per annum. And, we are also the world’s fifth largest exporter of petroleum products.
US forcing India to buy LNG at exorbitant prices, says Putin aide on Trump’s moves against Russian energy
Russian Foreign Minister Sergei Lavrov on Monday accused the United States of trying to block India and other countries from buying Russian oil, Sputnik reported. Speaking in an interview with TV BRICS, Lavrov said Washington is using “coercive” measures such as tariffs, sanctions, and direct prohibitions to achieve economic dominance. Lavrov referred to the peace talks in Alaska last year and said the US had presented a proposal on Ukraine, which Russia accepted. “They (US) tell us that the Ukraine problem should be resolved. In Anchorage, we accepted the US Proposal. The US position was important to us. By accepting their proposal, we seem to have completed the task of resolving the Ukrainian issue and moving on to a dull-scale, broad-based and mutually beneficial cooperation. So far, the reality is quite the opposite. New sanctions are imposed, a ‘war’ against tankers in the open sea is being waged in violation of the UN Convention on the Law of the Sea,” Putin’s aide said.
India seeks to buy LNG from Azerbaijan
India is seeking to purchase liquefied natural gas (LNG) from Azerbaijan, said head of the LNG division of India’s Bharat Petroleum during an interview with The Hindu newspaper on the sidelines of India Energy Week held in Goa. The Bharat Petroleum executive noted that India’s state-owned oil refining company is holding talks with the State Oil Company of Azerbaijan Republic (SOCAR) on the purchase of liquefied natural gas, News.Az reports. At the same time, the company plans to buy liquefied petroleum gas (LPG) from the United States at lower prices in order to diversify supplies and has announced a tender to that effect.
India’s Russian oil buy to dwindle
India is likely to begin scaling back its crude oil purchases from Russia under an agreement reached with the United States in exchange for lower trade tariffs, sources said, adding that these imports will continue for now, as refiners like Nayara Energy have limited alternatives. President Donald Trump on Friday signed an executive order rescinding a punitive 25 per cent duty on all imports from India, saying the move followed New Delhi’s commitment to stop imports of Russian oil. While Indian refiners, which process crude oil into fuels such as petrol and diesel, have not received any formal directive to halt Russian purchases, they have been informally advised to begin scaling back buys from Moscow, three sources with knowledge of the matter said. Most refiners will continue to honour purchase commitments made before the announcement – orders typically placed six to eight weeks in advance – but will not place new orders thereafter, they said. Hindustan Petroleum Corporation Ltd (HPCL), Mangalore Refinery and Petrochemicals Ltd (MRPL) and HPCL-Mittal Energy Ltd (HMEL) had stopped buying oil from Russia soon after the US last year slapped sanctions on Moscow’s key exporters, while others like Indian Oil Corporation (IOC) and Bharat Petroleum Corporation Ltd (BPCL) will wind down their purchases, sources said. Reliance Industries Ltd, India’s biggest buyer, which late last year paused purchases after US sanctions on Rosneft and Lukoil, is also likely to cease purchases after its resumption cargo of 1,50,000 barrels is delivered in the next couple of weeks. The only exception to this rule is likely to be Nayara Energy. Nayara was first sanctioned by the European Union and then by the UK for its Russian links (Rosneft holds 49.13 per cent in Nayara). Because of these sanctions, no other major supplier is willing to do any commercial transaction with the company, resulting in it being forced to buy Russian oil from non-sanctioned entities. While the Oil Ministry has refused to comment on the issue, the Commerce Ministry and the Ministry of External Affairs have not directly commented on commitments made by India with regard to Russian oil purchases.
EU Escalates Oil Sanctions With Broad Ban on Shipping Services
The European Union is preparing to take a much bigger swing at Russia’s oil trade, and this time Brussels is aiming less at optics and more at the plumbing that actually keeps barrels moving. The European Commission has proposed what would be its broadest sanctions package yet against Russian crude exports, targeting not just ships or buyers but the services that make seaborne oil trade possible in the first place. The plan would ban European firms from providing shipping, insurance, financing, and other maritime services for Russian crude at any price, effectively sidelining the G7’s much-criticized oil price cap. If adopted, the move would cut directly into a system that still relies heavily on Western infrastructure. Russia exports more than a third of its crude using tankers and services linked to Greece, Cyprus, and Malta, supplying mainly India and China. The new proposal would shut that door, forcing Russian oil even deeper into the shadow fleet ecosystem. The package, the EU’s 20th since Russia’s invasion of Ukraine, would also expand sanctions on Moscow’s maritime workarounds. Brussels wants to add 43 more vessels to its shadow fleet blacklist, bringing the total to around 640, while also hitting regional Russian banks and crypto firms accused of helping evade sanctions. New import bans on Russian metals, chemicals, and critical minerals are also included. European Commission President Ursula von der Leyen framed the measures as necessary ones that will push Moscow toward serious peace talks. Pressure, she contends, is the only language the Kremlin understands. The intent is to make Russian oil harder, riskier, and more expensive to sell. It is part of a broader hardening by Western governments. Earlier in the day, the United States announced fresh sanctions targeting Iranian oil traders and shadow fleet vessels—a renewed focus on enforcement. The original price cap experiment was supposed to let oil flow while starving Russia of revenue. But as some predicted, the pressures proved easy to dodge and difficult to police. A services ban is blunter and harder to game. It is unilkely to stop Russian oil from flowing altogether, but it should push more barrels into discounted, high-friction channels where margins shrink as logistics get even more complicated. Unanimity among EU members is still required, and that is never guaranteed.
The U.S. LNG Boom Is Lowering Europe’s Energy Costs and Raising America’s
The United States has cemented its position as the world’s leading exporter of Liquefied Natural Gas (LNG) over the past couple of years, thanks to surging natural gas demand in Europe and Asia. U.S. LNG exports hit a record 111 million tons in 2025, surpassing 100 million metric tons for the first time, driven by high utilization and new capacity additions from projects like Plaquemines LNG. But this could be just the beginning of the U.S. LNG boom: the EIA has predicted that U.S. LNG export capacity will more than double by 2029, with an estimated 13.9 Bcf/d of new capacity added between 2025 and 2029 as projects like Plaquemines LNG Phase 1 and Corpus Christi Stage 3 reach full operations. Meanwhile, additional projects such as Delta LNG, CP2 LNG, and others are expected to further bolster capacity toward 2030. However, the energy experts are now warning that all this growth will come at cost, as does everything. According to Wood Mackenzie, European demand for industrial natural gas has declined by 21% since 2021 while industrial power demand has decreased by 4%, driven by soaring gas prices after Russia’s invasion of Ukraine. However, WoodMac has projected that the ongoing massive wave of new global LNG supply, primarily from the U.S. and Qatar, is expected to nearly halve European traded gas prices by 2030 compared to 2025 levels, saving European industry roughly $46 billion annually by 2032. Conversely, surging LNG exports and soaring demand from AI data centers are projected to push domestic U.S. gas prices to an average of $4.90/MMBtu between 2030 and 2035, a nearly 50% increase from 2025 levels. This constitutes a narrowing competitive gap, with the large cost advantage that U.S. manufacturers have enjoyed for over a decade poised to shrink despite U.S. energy remaining cheaper than European energy in absolute terms. That doesn’t mean that European manufacturers will be complaining, though. The EU has become heavily reliant on the U.S., which supplied more than 57% of EU LNG imports by early 2026, up from 45% in 2024. Consequently, falling energy prices will benefit energy-intensive industries sectors such as petrochemicals, metals, and chemicals, which have been under severe cost pressure since the global energy crisis hit four years ago, with WoodMac reporting they are going through a “price reversal window” that will allow them to stabilize or recover. Lower European energy costs are expected to open up growth opportunities, with WoodMac predicting that the continent’s pharmaceuticals, food processing, and data center sectors are likely to capture a larger share of the international market. This could, however, prove to be a double-edged sword for the U.S. economy. Indeed, the U.S. LNG boom is poised to create a complex, often contradictory impact on the U.S. economy, acting as a major driver for GDP growth, job creation, and infrastructure investments while simultaneously raising domestic energy costs and complicating the energy transition. The LNG boom is expected to contribute up to $1.3 trillion to the U.S. GDP by 2040 and generate $166 billion in federal and state tax revenues, according to an S&P Global study. The industry is expected to create nearly 500,000 jobs, encompassing direct, indirect, and induced employment. Over $50 billion is projected to flow into new, massive infrastructure projects (e.g., Plaquemines, Golden Pass, Port Arthur). In contrast, experts warn that even relatively modest increases in gas and energy prices can lead to large increases in operating costs, potentially taking a toll on margins. An analysis by the Industrial Energy Consumers of America (IECA) found that every $1 increase in the Henry Hub price costs U.S. consumers and manufacturers ~$54 billion annually in combined gas and electricity expenses, including $20 billion more in electricity expenses as well as $34 billion increase in direct natural gas costs for consumers and manufacturers. For manufacturers, who often cannot pass on energy costs as easily as regulated utilities, a $1 increase in the Henry Hub price poses a direct threat to competitive advantage. Industries that rely heavily on natural gas, such as manufacturing, chemicals, and fertilizers, face increased operational costs, with estimates of up to $125 billion in added costs by 2050. But it’s not just large industries that could suffer the negative consequences of the ongoing AI and LNG boom. Increased exports connect the U.S. domestic natural gas market to higher global prices, driving higher electricity and heating bills for U.S. households. Meanwhile, analysts have warned that the U.S. could face a domestic energy crunch that could trigger spikes in energy prices if natural gas production growth fails to meet export demand growth. This could negatively impact the clean energy transition, with higher natural gas prices making coal power more competitive in the domestic electricity market.
Oil prices fall as US, Iran agree to talks, easing conflict concerns
Oil prices fell on Thursday after the U.S. and Iran agreed to hold talks in Oman on Friday, easing concerns of a potential military conflict between them that could disrupt supply from the key Middle East-producing region. Brent crude futures fell $1, or 1.4%, to $68.47 per barrel at 0152 GMT. U.S. West Texas Intermediate crude prices fell 91 cents, or also 1.4%, to trade at $64.23. Oil prices surged about 3% on Wednesday after a media report suggested the planned talks between the United States and Iran on Friday could collapse. However, later in the day officials from both sides said talks would go ahead on Friday though the topics up for discussion have not been settled. Tony Sycamore, market analyst with IG, pointed to the uncertainty around the talks as the reason for the swings, noting the price surge on fears of their collapse but they were easing as “these fears have since moderated on reports that the nuclear talks are back on.” Iran is open to discussing its nuclear programme, including uranium enrichment, with Western countries, while the U.S. also wants to include Iran’s ballistic missiles, its support for armed proxy groups around the Middle East and its treatment of its own people. Despite the talks, there are concerns U.S. President Donald Trump will still carry out his threats to strike Iran, the fourth-largest producer among the Organization of the Petroleum Exporting Countries, potentially risking a wider confrontation in the oil-rich region. In addition to the possible disruption of Iranian production in the event of a conflict, there are concerns exports from other Gulf producers could be affected. About a fifth of the world’s total oil consumption passes through the Strait of Hormuz which lies between Oman and Iran. Other OPEC members, Saudi Arabia, the United Arab Emirates, Kuwait and Iraq, export most of their crude via the strait, as well as Iran itself. While the planned talks are reducing the recent risk premium in prices, the market was supported on Wednesday by data showing declines in oil inventories in the U.S., the world’s biggest crude producer and consumer. U.S. crude stocks and distillate inventories fell while gasoline inventories rose in the week ended January 30 as a winter storm gripped large swathes of the country, the Energy Information Administration said on Wednesday.
India open to Venezuela oil imports subject to commercial viability: MEA spokesperson Randhir Jaiswal
India remains open to exploring crude oil supplies from Venezuela and other sources, depending on commercial viability, the Ministry of External Affairs (MEA) said on Thursday, outlining New Delhi’s position on energy security amid global supply uncertainties. “There is a history of engagement with Venezuela. We have a long-standing energy partnership with them, and we remain open to exploring options of availability of crude oil from Venezuela and other places, depending on its commercial viability,” Randhir Jaiswal said at a press conference.Responding to a query on India’s oil imports from Venezuela, MEA spokesperson Randhir Jaiswal said Venezuela has been a long-standing energy partner for India, both in trade and investment. U.S. President Donald Trump last week agreed to reduce tariffs on Indian goods to 18% from 50% as part of a broader trade deal and claimed Prime Minister Narendra Modi has assured him that the South Asian nation will stop buying Russian oil. Trump also said India will buy more oil from the U.S. and ‘potentially Venezuela’. Modi, however, did not comment on India’s plan to halt Russian oil imports in his message welcoming the trade deal. Jaiswal said ensuring the energy security of 1.4 billion Indians is the “supreme priority” of the government. “As far as Venezuela is concerned, it has been a long-standing partner for us in the area of energy, both on the trade side and also on the investment side,” Jaiswal said during a media briefing. He noted that India had been importing crude oil from Venezuela until 2019–20, after which purchases were halted. “We were importing energy or crude oil from Venezuela till 2019–20 and thereafter, we had to stop,” he said. According to the MEA, India resumed buying oil from Venezuela in 2023–24, but those imports were again halted following the reimposition of sanctions. Jaiswal also highlighted the presence of Indian public sector undertakings (PSUs) in the South American nation. “Indian PSUs have established partnerships with the National Oil Company of Venezuela, PDVSA, and our PSUs have maintained a presence in the country since 2008,” he said. Emphasising India’s broader approach to securing energy supplies, the MEA spokesperson said the country remains pragmatic in its sourcing strategy. “Consistent with our approach to energy security, India remains open to exploring the commercial merits of any crude supply options,” Jaiswal said. India, the world’s third-biggest oil importer and consumer, had twice in the past halted imports from Venezuela under pressure from sanctions in 2019-20 and 2023-24.