Stricter US sanctions threaten Russia’s oil trade with India and China: Report
New US sanctions on Russian oil producers and ships are expected to disrupt Russia’s oil trade with India and China, two of its largest customers, according to a report by news agency Reuters. This development may lead to higher oil prices and increased freight costs for both countries as they look to source oil from alternative markets. The US Treasury announced tougher sanctions on Friday, targeting major Russian oil producers Gazprom Neft and Surgutneftegas, as well as 183 ships involved in transporting Russian oil. These measures aim to cut into the revenues Russia uses to fund its war in Ukraine.
Europe threatens to trigger a global scramble for natural gas supplies
The world is bracing for a fight for natural gas supplies this year, prolonging the pain of higher bills for consumers and factories in energy-hungry Europe and putting poorer emerging countries from Asia to South America at risk of getting priced out of the market. For the first time since the energy crisis was turbocharged by Russia’s war in Ukraine, Europe risks failing to meet its storage targets for next winter, setting the stage for one last scramble for supplies before new liquefied natural gas capacity starts to ease the situation next year. While Europe has enough gas reserves to get through this winter and prices have eased since the start of the year, inventories are being eroded by cold weather, which swept across the continent this weekend. Supply options have been squeezed since the start of this year, when Russian pipeline deliveries through Ukraine ceased following end of a transport agreement. “There will certainly be an energy gap in Europe this year,” said Francisco Blanch, commodity strategist at Bank of America Corp. “That means that all the incremental LNG that’s coming online this year around the world will go into making up for that shortfall in Russian gas.” To cover its projected demand, Europe will need to import as much as an extra 10 million tons per year of LNG — about 10 per cent more than in 2024, according to Saul Kavonic, an energy analyst at MST Marquee in Sydney. New export projects in North America could help ease market tightness, but that hinges on how quickly the facilities can ramp up production. With fewer options to restock for next winter, Europe will need LNG shipments, pulling some away from Asia, home to the world’s biggest consumers. Depending on how demand shapes up, the competition would drive prices higher than countries like India, Bangladesh and Egypt can afford and weigh on Germany’s economic recovery.
HPCL arm successfully commissioned LNG Regasification terminal in Gujarat
Hindustan Petroleum Corporation (HPCL) has announced the successful commissioning of a 5 MMTPA capacity LNG Regasification terminal at Chhara, Gujarat, established by its wholly owned subsidiary, HPCL LNG. The company stated that the ship, Maran Gas Coronis, carrying LNG cargo, berthed on 6 January 2025, and the discharge of the cargo into the onshore LNG tanks was successfully completed on 12 January 2025. The terminal, located at Chhara Port in Gir-Somnath District, Gujarat, has been developed with an investment of approximately Rs 47.50 billion. It features facilities for LNG receipt through ocean tankers, marine unloading, storage, LNG road tanker loading, regasification and the supply of regasified LNG to the gas grid. HPCL LNG will operate the terminal under a tolling model, offering services to third-party users through long-term capacity booking contracts and/or master regasification agreements for spot cargoes. The company has already brought in its first cargo, and the terminal is set to begin commercial operations soon. HPCL is engaged in the business of refining crude oil and marketing petroleum products. It operates through two segments: downstream and exploration and production of hydrocarbons. The companys standalone net profit tumbled 87.67% to Rs 6.3118 billion in Q2 FY25 as against Rs 51.1816 billion posted in Q2 FY24. Net sales (excluding excise duty) grew by 4.29% year on year (YoY) to Rs 994.1316 billion in the September 2024 quarter.
With no dearth of crude, India can survive the transition to green energy, says Hardeep Singh Puri
Union Minister for Petroleum and Natural Gas Hardeep Singh Puri on Saturday, said the transition from fossil fuel to green energy was possible only when one survives the present scenario. While India is making steady steps towards green energy, fossil fuel, particularly crude oil, was available in the international market for survival now, he said. Mr. Puri was speaking at the ‘Energy for Survival-Security and Climate’ debate at the Mangaluru Lit Fest here. Stating that India’s dependence on fossil fuel was growing with about 85% dependence on imports, the Minister noted the situation would continue till the country explores crude on its own. Dependence on gas was about 50%, he said. At the same time, there was no shortage of crude oil, he argued, and said crude also comes from non-OPEC (the Organisation of Petroleum Exporting Countries). The Western hemisphere has abundant crude with Brazil putting out about 300 million barrels per day and even the U.S. producing about 13 million barrels. There were other countries, including Russia, Guyana, Suriname, etc., producing crude. Speaking on sustainability, Mr. Puri said India would blend biofuel with petrol by 20% from 2025-26 itself instead of the earlier target of 2030. While the country has demonstrated its ability to produce solar energy, it was also confident of achieving the 5 million tonnes of green hydrogen target. Compressed Biogas Plants and Compressed Natural Gas plants would be increased to achieve sustainability, he said. Mr. Puri said with about 67 million people, of 1.4 billion population in the country fill fuel at retail outlets everyday. India’s consumption of crude was set to increase to 7 million barrels per day from the present 5 million. Yet, a quarter of the global growth would come from India in about 20 years. “We have to plan for tomorrow and remain insulated against possible upheavals and disruption,” he said.
US Imposes Sweeping Sanctions on Russia’s Oil and Gas
U.S. President Joe Biden’s administration imposed its broadest package of sanctions so far targeting Russia’s oil and gas revenues on Friday, in an effort to give Kyiv and Donald Trump’s incoming team leverage to reach a deal for peace in Ukraine. The move is meant to cut Russia’s revenues for continuing the war in Ukraine that has killed more than 12,300 civilians and reduced cities to rubble since Moscow invaded in February, 2022. Ukrainian President Volodymyr Zelenskiy said in a post on X that the measures announced on Friday will “deliver a significant blow” to Moscow. “The less revenue Russia earns from oil … the sooner peace will be restored,” Zelenskiy added. Daleep Singh, a top White House economic and national security adviser, said in a statement that the measures were the “most significant sanctions yet on Russia’s energy sector, by far the largest source of revenue for (President Vladimir) Putin’s war”. The U.S. Treasury imposed sanctions on Gazprom Neft and Surgutneftegas, which explore for, produce and sell oil as well as 183 vessels that have shipped Russian oil, many of which are in the so-called shadow fleet of aging tankers operated by non-Western companies. The sanctions also include networks that trade the petroleum. Many of those tankers have been used to ship oil to India and China as a price cap imposed by the Group of Seven countries in 2022 has shifted trade in Russian oil from Europe to Asia. Some tankers have shipped both Russian and Iranian oil. The Treasury also rescinded a provision that had exempted the intermediation of energy payments from sanctions on Russian banks. The sanctions should cost Russia billions of dollars per month if sufficiently enforced, another U.S. official told reporters in a call. “There is not a step in the production and distribution chain that’s untouched and that gives us greater confidence that evasion is going to be even more costly for Russia,” the official said. Gazprom Neft said the sanctions were unjustified and illegitimate and it will continue to operate.
Government partially restores gas supply to IGL, Adani-Total
The government has increased cheaper gas supply to city gas retailers IGL, Adani-Total, and Mahanagar Gas, restoring a major part of the allocation that was cut in 2024, according to regulatory filings by the companies. The government, in October and November last year, had cut supplies of the so-called APM Gas (low-priced natural gas coming from old fields such as Mumbai High and Bassein fields in the Bay of Bengal) to city gas retailers by as much as 40 per cent in view of limited output. This led to city gas retailers hiking CNG prices by Rs 2-3 per kg and planning more increases as they replaced lost volumes with higher-priced input fuel. The price hike made CNG less attractive when compared to alternate fuels like diesel.
Iraq, UAE gain as India’s Russian oil imports slip to 12-month low in Dec amid Moscow’s high domestic demand
India’s crude oil imports from West Asia—specifically Iraq and the United Arab Emirates (UAE)—surged in December with Indian refiners looking to replace the shortfall in supplies from their largest source market Russia, which cut exports to meet heightened oil demand from its domestic refineries, shows an analysis of oil tanker data. Saudi Arabia, however, was unable to capitalise on the opportunity due to its barrels being priced higher than Iraqi and Emirati oil. ding to industry watchers, domestic oil demand in Russia jumps towards the end of the year as the country’s refineries come out of the autumn refinery maintenance season and start clocking high capacity utilisation levels. The seasonally high demand for crude in Russia is expected to continue in January and a couple of subsequent months, which is likely to cap Russian oil exports and push India towards other key suppliers to bridge the supply gap. In December, India’s imports of Russian crude dropped nearly 17 per cent sequentially to 1.48 million barrels per day (bpd), the lowest monthly level in 2024, per vessel tracking data from commodity market analytics form Kpler. Russia’s market share in India’s import basket in December contracted to 31.5 per cent from 38 per cent in November. India’s total oil imports in December were at 4.71 million bpd, up 0.5 per cent month-on-month. “The lack of Russian medium sour (crude) grades has been a boon for Iraq as India needed to find grades that would be similar in quality to Urals (Russia’s flagship crude grade) and could be tapped into relatively quickly. As a consequence, Iraqi imports hit their highest since March,” said Viktor Katona, head of crude analysis at Kpler.
ONGC engages BP to boost production in largest oil field
India’s top explorer Oil And Natural Gas Corp on Wednesday said energy major BP will act as technical service provider to help boost oil and gas output from the country’s largest producing field, off India’s west coast. BP has promised an increase of up to 60% in production of oil and gas output from the Mumbai High field, discovered in 1974, ONGC said in a stock exchange filing. The field reached a peak production level of 471,000 barrels per day of oil in March 1985, and its output had declined to about 134,000 bpd in April 2024, according to the tender document floated last year. India, the world’s third-biggest oil importer and consumer, wants to quickly raise its oil and gas output, which has been stagnant for years. In June, the government said that ONGC was seeking a technical tie-up with a global oil major to boost production and BP’s board had met India’s Oil Minister Hardeep Singh Puri in September 2024.
Norway Doubles Down on Oil and Gas
After hitting record highs this year, Norway’s oil and gas investment is expected to grow even higher in 2025. Greater development activity on new projects and the cost of inflation have contributed heavily to the increase in Norway’s oil and gas investment in 2024. Norway’s oil and gas investment is expected to total around $22.9 billion this year, marking an all-time high, according to the country’s statistics office. The previous record was $20.4 billion in 2014 when oil prices were very high and companies were still spending heavily on new oil and gas projects. The increase in investment supported new exploration activity, pipeline transportation, and shutdown and removal. The Scandinavian oil superpower is expected to continue investing heavily in fossil fuels in the coming years. Oil and gas companies operating in Norway expect to invest an estimated $24.68 billion in 2025, the industry association Offshore Norge announced in December. The group surveyed 14 companies, including Equinor, Aker, Vår Energi, ConocoPhillips, and Shell, representing almost the entirety of the country’s oil and gas output. Companies plan to commence drilling on 45 exploration wells in Norwegian waters in 2025, an increase from 41 this year and the highest level since 2019. The increase in new exploration projects reflects the growth in demand for natural gas from Norway, following the Russian invasion of Ukraine and subsequent sanctions on Russian oil. Norway is Western Europe’s largest oil and gas producer, with an output of more than 4 million bpd, and the government aims to continue increasing production for several decades. In December, Vår Energi and Equinor announced they had made a new oil discovery at their Cerisa exploration well near an operational asset in the Barents Sea. The operators estimate the discovery holds between 1.3 and 4.8 million standard cubic meters of recoverable oil equivalent. This marked the fourth find in a row in the region. Alongside previous discoveries in Gjøa North and Ofelia/Kyrre, Cerisa could be tied into the Gjøa field using existing infrastructure in the area. This would provide combined estimated gross recoverable resources of up to 110 MMboe. In addition to new exploration activities in Norway’s waters, Equinor also announced plans in December for a new 50/50 joint venture with Shell that will see the merging of their U.K. fossil fuel assets to create the largest independent oil and gas producer in the U.K. North Sea. The two companies announced in a joint statement that the new venture will help “sustain domestic oil and gas production and security of energy supply in the U.K.” The statement went on to say, “With the once prolific basin now maturing and production naturally declining, the combination of portfolios and expertise will allow continued economic recovery of this vital U.K. resource.” Norway has justified its oil and gas expansion by investing in ‘low-carbon’ oil projects, which incorporate decarbonization techniques, as well as through its heavy investment in green energy projects. Norway is now the largest and lowest emissions supplier of oil and gas in Europe. This is largely thanks to the electrification of the country’s upstream operations, using Norway’s extensive hydropower. By 2026, Wood Mackenzie forecasts that over 60 percent of Norwegian production will be electrified. New energy market intelligence research from Rystad’s Palzor Shenga and Elliot Busby suggests that the electrification of fossil fuel operations can significantly reduce upstream oil and gas emissions. The research shows that over 80 percent of emissions generated from upstream oil and gas production facilities can be cut by using electricity from renewable resources or natural gas that would otherwise be flared. Shenga, the vice president of upstream research at Rystad, stated, “As the world confronts the pressing issue of climate change, the oil and gas industry is under increasing pressure to minimize its carbon footprint and align its practices with global sustainability objectives. Where it’s possible and economically viable, electrification has great potential to lower the industry’s emissions while maintaining production output.” Norway has invested heavily in renewable energy in recent years. Its grid runs almost entirely on green energy sources, and it has also funded projects in other parts of the world. For example, in June Norway’s Sovereign Wealth Fund purchased a $418 million stake in the 573 MW U.K. wind farm Race Bank. The Norwegian Investment Fund for Developing Countries also announced an investment of $19.9 million in three wind farms with a total capacity of 420 MW in South Africa, to be built by EDF Renewables. Nonetheless, many question whether Norway should be seen as a climate hero or as a carbon villain. The International Energy Agency has repeatedly said that further fossil fuel exploration is not compatible with its scenarios for reaching net zero emissions by 2050, meaning that Norway’s oil and gas investment is at odds with its aims for a green transition, despite its decarbonization and carbon offset efforts. Yet it seems that Norway wants to have its cake and eat it by continuing to invest heavily in oil and gas while also providing significant funding for decarbonization and a green transition.
India’s operational natural gas pipeline expands by 62.6%, development of 10,805 km under execution: Ministry
The length of operational natural gas pipeline in the country has increased from 15,340 kilometres (Kms) in 2014 to 24,945 Kms, a whopping 62.6 per cent as of September 10, 2024, the Ministry of Petroleum & Natural Gas said in its year-end review of the last year. The ministry stated that the development of about 10,805 km of natural gas pipeline is under execution. With the completion of these pipelines authorised by The Petroleum and Natural Gas Regulatory Board (PNGRB), the national gas grid would be completed and would connect all major demand and supply centres in India, the ministry stated. The move will ensure easy availability of natural gas across all regions and also help to achieve uniform economic and social progress. On January 7, the ministry stated that PNGRB has amended PNGRB (Determination of Natural Gas Pipeline Tariff) Regulations to incorporate the regulations pertaining to Unified Tariff for natural gas pipelines with a mission of “One Nation, One Grid and One tariff.” PNGRB has notified a levelized unified tariff of Rs 80.97/MMBTU w.e.f. June 1, 2024 and created three tariff zones for the unified tariff, where the first zone is up to a distance of 300 km from the gas source, the second zone is 300-1200 km, and the third zone is beyond 1200 km. The national gas grid covers all the interconnected pipeline networks owned and operated by entities, viz., Indian Oil Corporation Limited, Oil and Natural Gas Corporation Limited, GAIL (India) Limited, Pipeline Infrastructure Limited, Gujarat State Petronet Limited, Gujarat Gas Limited, Reliance Gas Pipelines Limited, GSPL India Gasnet Limited and GSPL India Transco Limited. The reform will especially benefit the consumers located in the far-flung areas where currently the additive tariff is applicable and facilitate the development of gas markets and the vision of the government to increase the gas utilisation in the country, the ministry stated. PNGRB has authorised 307 geographical areas for the development of City Gas Distribution (CGD) infrastructure with a potential coverage of about 100 per cent of the country’s area and 100 per cent of the population. As of September 30, 2024, the total number of PNG (D) connections and CNG stations in the country was 13.6 million and 7259, respectively. The ministry added that to cater to the growing demand of the CGD sector and to protect the common people from price volatility, the government has released new CGD sector gas allocation guidelines wherein the allocation of the PNG (domestic) segment was increased (i.e., 105 percent of PNGD consumption in the previous quarter) and the balance available volume is to be supplied to the CNG (T) segment on a prorate basis.