LNG tender cancelled on high prices
Pakistan LNG, a subsidiary of state-owned Government Holdings, has cancelled a tender seeking six cargoes of liquefied natural gas (LNG) for delivery in July and August, two industry sources said on Wednesday. Pakistan is among major LNG buyers in Asia and the move could weigh on spot Asian LNG prices LNG-AS which have been declining after rising to a 3-1/2-year high in mid-June. Pakistan LNG has decided to cancel the tender due to higher than expected prices offered by sellers, one of the sources said. “(Power) demand is fluctuating,” the source said, adding that there is no urgent need for power plants to seek replacement cargoes. The company is unlikely to re-issue the tender, the source added. Both industry sources declined to be identified as they were not authorised to speak with media. The company still has a separate tender seeking five cargoes of the super-chilled fuel for September to October delivery. Prompt cargoes meant for Pakistan are being offered in the spot market, the second source said, though details were scant. With Indian demand for LNG waning due to its monsoon season and high inventory, and with not all terminals operating in full capacity, the cargoes are unlikely to be diverted to India, the second source said. Jordan Akins Womens Jersey
Formation of China-India oil cartel threatening OPEC
When reports emerged that India and China are in talks about forming an oil buyers’ club, OPEC was probably too busy with its upcoming June 22 meeting to concern itself with that dangerous alliance. Now, it may be time for it to start worrying. “The timing is right. The boom in US oil and gas production gives us greater leverage against OPEC,” the Times of India quoted an Indian official as saying last month after the formal start of said talks. The two countries, after all, account for a combined 17 percent of global oil consumption and they are the ones that would be the hardest hit if prices rise as a result of OPEC’s actions. What’s more, they might not be alone in this attempt to curb OPEC’s clout on the global oil market. According to Bloomberg’s Carl Pope, Europe and Japan, previously reluctant to take part in any anti-OPEC projects, may now join in. The reason they are likely to join in is that unlike in previous oil price cycles, now there are alternatives to fossil fuels. Electrification is where OPEC may have to face off with a future oil buyers’ cartel. India, China, and Europe are all very big on EV adoption. Japan is a leader in battery manufacturing. If they set their minds to it, these four players could upend the oil market and effectively cripple OPEC. Of course, this is a best-case scenario of the kind that rarely unfolds in reality. Let’s take India, for example. A recent survey suggested that as many as 90 percent of Indian drivers were willing to switch to EVs if the government built the necessary charging infrastructure, reduced road taxes, and increased subsidies. Another survey identified price and range as additional roadblocks towards the mass adoption of EVs in India. Because of these challenges, New Delhi recently amended its ambitious goal of having an all-EV fleet on the roads of the country by 2030 to having 30 percent of the fleet electric. China, for its part, is the undisputed leader in global EV adoption: the country accounted for more than 50 percent of global EV sales last year in case you were thinking, “Wait, wasn’t that Norway?” However, this was in large part made possible by generous government subsidies for EV manufacturing. These subsidies are due to be wound down to 0 by 2020, and carmakers are already beginning to brace for a future without the support of the state. It’s safe to say it remains uncertain if the EV boom will continue after 2020. This precarious situation with EVs is reason enough for China and India to seek more clout on international oil markets dominated by OPEC and would justify the formation of a “buyers’ club.” Europe, for its part, is, as a whole, a top performer in EV adoption and it is also very big on environmentalism. At the same time, it still imports crude and quite a lot of it, so it cares about oil prices as a large buyer. India, China look to form ‘Oil Buyers Club’ China and India are facing challenges in EV adoption. Europe could help and benefit from it. After all, taken together, Europe, China, India, and Japan account for the manufacturing of as much as 65 percent of the world’s cars, and a lot of these are manufactured in Europe. These four also consume 35 percent of the world’s crude oil and would like to reduce this number. According to Pope, if they get together, they would be able to negotiate either a more gradual or a faster shift to EVs. It would all depend on whether OPEC would agree to maintain lower prices or not. A more skeptical view would note the challenges in EV adoption such as subsidies and infrastructure. These would take time to be overcome even if everyone played together. Yet long-term, an oil buyers’ alliance could be a force to be reckoned with by the oil producers, and the latter need to start paying attention now. Adam Shaheen Womens Jersey
India emphasises energy security before US officials’ visit
With a team of US officials likely to visit India soon to hold discussions on sanctions against Iran and impact on oil imports, the government on Thursday emphasised on energy security that is vital for economic growth. “We are, of course, prepared to take all necessary steps, including engagement with all stakeholders. I had mentioned about ensuring our energy security. We will have to see how we go about doing that. It is vital for economic growth. We have to see the steps we take, the discussions we have, and the engagements which we have to undertake to ensure that we maintain our energy security,” External Affairs Ministry Spokesperson Raveesh Kumar told reporters here. Kumar said that he was not aware of any firm dates for the discussions at this stage. He said that whenever the discussions take place there would be representatives from the Ministries concerned, including of external affairs and petroleum and natural gas. He was reacting when asked about reports of a US delegation’s visit to India to talk about the Iran nuclear deal. Kumar said that the question pertained to a statement made by a US State Department official and there was no specific mention about any country. Brian Hook, Director of Policy Planning at the US State Department, had said on Monday that the US was not looking to grant licences or waivers because doing so would substantially reduce pressure on Iran. He had said that the US was prepared to work with countries reducing their imports on a case-by-case basis, but as with our other sanctions, it is not looking to grant waivers or licences. Iran is India’s third-largest oil supplier after Iraq and Saudi Arabia. The US has told India and other countries to cut oil imports from Iran to “zero” by November 4 or face sanctions. US Ambassador to the United Nations Nikki Haley is also learnt to have reiterated the US position in a meeting with Prime Minister Narendra Modi.
Iran to Trump: oil will cost $100 per barrel, and it is your fault
Oil will soon cost $100 per barrel due to supply disruptions caused by U.S. President Donald Trump, Iran’s OPEC Governor told Reuters on Thursday, as he warned expectations that Saudi Arabia and Russia would help bring down prices were in vain. Trump again accused the Organization of the Petroleum Exporting Countries of driving fuel prices higher on Wednesday, and urged U.S. allies such as Saudi Arabia to pump more if they wanted Washington to continue protecting them against their top foe Iran. Iran, OPEC’s third-largest producer, is facing U.S. sanctions on its oil exports that are prompting some buyers to cut purchases. Iranian OPEC Governor Hossein Kazempour Ardebili told Reuters that Trump “should have expected” when blocking Iran’s access to the global markets that it would end up as “hostage (to) Saudi Arabia and Russia”, who he said had little vested interest in bringing down prices. “The responsibility of paying unnecessary prices for oil by all consumers of the whole world, especially in U.S. gas stations, is solely upon your (Trump’s) shoulders and the price of over $100 per barrel is yet to come,” Kazempour said. The Republican president has lashed out at OPEC in recent weeks. Rising gasoline prices could create a political headache for Trump before November mid-term congressional elections by offsetting Republican claims that his tax cuts and rollbacks of federal regulations have helped boost the U.S. economy. In a tweet on Saturday, Trump said Saudi Arabia had agreed to increase oil output by up to 2 million barrels, an assertion the White House rowed back on in a subsequent statement. The leader of Saudi Arabia, OPEC’s biggest member, has assured Trump that the kingdom can raise oil production if needed, and that the country has 2 million barrels per day of spare capacity that could be deployed to help cool oil prices to compensate for falling output in Venezuela and Iran. Trump has been complaining about OPEC at the same time that Washington is piling pressure on its European allies to stop buying Iranian oil. Iran has threatened to block oil exports through a key Gulf waterway in retaliation against any hostile U.S. action. Kazempour said: “We are neighbours and will remain so, we know we can and we must live together. No one wants you (Trump) to protect anybody… You are fighting with everybody, Sir, since you came to office”. Kyle Wilber Womens Jersey
South Korea suspends Iranian oil loading in July for first time since 2012
South Korea will not lift any Iranian crude and condensate in July, halting all shipments for the first time in six years amid US pressure to cut all imports of Iranian oil from November, sources familiar with the matter said on Friday. Japanese customers, however, are continuing to import for now, with multiple buyers considering buying Iranian oil through September loading, said a North Asia trading source familiar with Iranian oil shipping arrangements. The move by South Korea, one of Iran’s main customers in Asia along with China and Japan, comes as it is in talks to seek an exemption from US curbs on buying Iranian oil, in line with a waiver it received during previous sanctions. “There was pressure from the South Korean government to halt purchases,” said the source familiar with Iranian shipping arrangements. “South Korea overall is lifting zero oil (from Iran) for July loading.” Two other sources said South Korea cancelled July loadings of crude and condensate cargoes from Iran as it was uncertain whether the country would receive an exemption from U.S. sanctions on Iran trade. The cancellations mean South Korea will import no Iranian oil in August, the first month of zero imports since August 2012 when South Korean buyers put Iranian oil purchases on hold before getting a waiver to import limited amounts of Iran crude. The United States in May said it was walking away from an international deal on Iran’s nuclear programme. In late June, it demanded its allies halt all imports of Iranian oil from November and said exemptions were unlikely. South Korean refiners have since curtailed their Iranian oil purchases and turned to alternative sources such as American and African crude due to expensive Middle East grades and uncertainty over trade with Iran. South Korean buyers of Iranian crude and condensate are SK Energy and SK Incheon Petrochemical, owned by SK Innovation , Hyundai Oilbank and Hanwha Total Petrochemical. Japan, which reduced Iranian oil imports significantly during the previous Western sanctions on Tehran that were lifted in 2016, is also seeking an exemption from the latest US sanctions on Iran. “Japanese buyers also nominated cargoes for August, though they were not allowed to buy additional crude on top of term contractual volumes,” the shipping source said. Japanese oil refiners may have to stop loading Iranian crude oil from October 1 if the government does not secure another exemption, the president of the Petroleum Association of Japan said last month. Jorge Posada Authentic Jersey
EXPLAINED: Strait of Hormuz – the world’s most important oil artery
With a third of the world’s sea-borne oil passing through it every day, the Strait of Hormuz is a strategic artery linking Middle East crude producers to key markets in Asia Pacific, Europe, North America and beyond. This week, an Iranian Revolutionary Guards commander threatened that Tehran will block oil shipments through the waterway in response to U.S. calls to ban all Iranian oil exports. The Strait has been at the heart of regional tensions for decades and this is not first time that Tehran has made such threats. WHAT IS IT? – It is a waterway separating Iran and Oman, connecting the Gulf to the Gulf of Oman and the Arabian Sea. – It is 21 miles wide at its narrowest point, but the shipping lane is only two miles wide in either direction. WHY IT MATTERS? – The U.S. Energy Information Administration estimates a record 18.5 million barrels per day of sea-borne oil passed through it in 2016, a 9 percent increase on flows in 2015 which accounted for 30 pct of all sea-borne traded crude oil and other liquids during the year. – Most of the crude exported from Saudi Arabia, Iran, the United Arab Emirates, Kuwait and Iraq passes through it. It is also the route for nearly all the liquefied natural gas (LNG) from lead exporter Qatar. – Throughout the Iran-Iraq war (1980-1988) the two sides sought to disrupt each other’s oil exports in what was known as the Tanker War. – The U.S. Fifth Fleet, based in Bahrain, is tasked with protecting the commercial ships in the area. – Energy consultants Petromatrix who track U.S. aircraft carriers in the region say there are currently no carriers in the Arabian Gulf. They add the carrier that could have made the short trip to the Gulf from the eastern Mediterranean, turned around to sail back to the Atlantic. – “Under the Bush administration there was always one to two carriers in the Arab Gulf, under the Obama administration there were some short times when the Arabian Gulf was left with no carriers but that was gestures made while the U.S. was negotiating with Iran,” the said on July 5 PIPELINE ALTERNATIVES – The UAE and Saudi Arabia have sought to find alternatives to bypass the strait. INCIDENTS IN THE STRAIT – In July 1988 the U.S. warship Vincennes shot down an Iranian airliner, killing all 290 on-board, in what Washington said was an accident after crew mistook the plane for a fighter. Tehran called it a deliberate attack. The U.S. said the Vincennes was in the area to protect neutral vessels against Iranian navy attacks. – In early 2008 the United States said Iranian boats had threatened its warships after they approached three U.S. naval ships in the Strait. – In June 2008, Revolutionary Guards commander-in-chief, Mohammad Ali Jafari, said Iran would impose controls on shipping in the Strait if it was attacked. – In July 2010 a Japanese oil tanker called M Star was attacked in the Strait. A militant group called Abdullah Azzam Brigades, which is linked to al Qaeda, claimed responsibility. – In January 2012, Iran threatened to block the Strait in retaliation for U.S. and European sanctions that targeted its oil revenues in an attempt to stop the nuclear program. – In May 2015, Iranian ships fired shots at a Singapore-flagged tanker which it said damaged an Iranian oil platform, causing the vessel to flee, and seized a container ship in the Strait. – On July 3, 2018, President Hassan Rouhani hinted Iran could disrupt oil flows through the Strait in response to U.S. calls to bring down Iran’s oil exports to zero. – The following day, a Revolutionary Guards commander spelled out that Iran would block all exports through the Strait if Iranian exports are stopped Miami Dolphins Jersey
Petrol, diesel price hiked for 1st time in more than a month
Petrol and diesel prices were today hiked for the first time in more than a month on the back of rising international rates and weakening rupee. The increase of 16 paisa a litre in petrol and 12 paisa per litre in diesel came after an 8-day self-imposed hiatus in rate revisions by state-oil firms in anticipation of softening international rates due to OPEC decision to raise output by 1 million barrels per day. The price of petrol in Delhi climbed to Rs 75.71 per litre from Rs 75.55 and diesel to Rs 67.50 a litre from Rs 67.38, according to price notification of Indian Oil Corp (IOC). The three state-owned fuel retailers, IOC, Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL) had not revised petrol and diesel prices since June 26. “We had not changed prices for a few days in anticipation OPEC decision to raise production leading to softening of international rates. But the 1 million barrels of additional production, which was to kick-in from July, has been overdone by the Iran issue,” IOC Chairman Sanjiv Singh told here. While the OPEC last month decided to raise production, the US is piling pressure on India, China, and other buyers to end all imports of Iranian oil by a November 4 deadline in a bid to choke the Persian Gulf state’s economic lifeline with sanctions over its nuclear programme. Singh said Iran produces around 2.3 to 2.5 million barrels per day and the world searching for alternates to replace those volumes has put pressure on the prices. The decision to hold on to rates was taken without any elections looming around, he said, adding international prices have risen post-OPEC decision and oil companies have to “adjust retail rates accordingly”. State-owned oil firms, who had in mid-June last year dumped 15-year practice of revising rates on 1st and 16th of every month in favour of daily price revisions, had last changed prices on June 26 when petrol price was cut by 14 paise and diesel by 10 paise. In the preceding month, or so rates had been cut in line with dropping international rates. Prices had hit an all-time high of Rs 78.43 a litre for petrol and Rs 69.31 per litre for diesel on May 30. That peak had triggered demands for a reduction in excise duty but the government had ruled out any immediate cut. The Centre currently levies a total of Rs 19.48 per litre of excise duty on petrol and Rs 15.33 per litre on diesel. On top of this, states levy Value Added Tax (VAT) – the lowest being in Andaman and Nicobar Islands where a 6 per cent sales tax is charged on both the fuel. Mumbai has the highest VAT of 39.12 per cent on petrol, while Telangana levies the highest VAT of 26 per cent on diesel. Delhi charges a VAT of 27 per cent on petrol and 17.24 per cent on diesel. The central government had raised excise duty on petrol by Rs 11.77 a litre and that on diesel by 13.47 a litre in nine installments between November 2014 and January 2016 to shore up finances as global oil prices fell, but then cut the tax just once in October last year by Rs 2 a litre. This led to its excise collections from petro goods more than doubling in last four years – from Rs 99,184 crore in 2014-15 to Rs 2,29,019 crore in 2017-18. States saw their VAT revenue from petro goods rise from Rs 1,37,157 crore in 2014-15 to Rs 1,84,091 crore in 2017-18. Clayton Geathers Jersey
Oil prices fall as Trump demands OPEC “reduce pricing now”
Oil prices fell on Thursday after U.S. President Donald Trump sent a tweet demanding that OPEC reduce prices for crude. Brent crude futures were at $77.78 per barrel at 0137 GMT, down 46 cents, or 0.6 percent, from their last close. U.S. West Texas Intermediate (WTI) crude futures were down 16 cents, or 0.2 percent, at $73.98 per barrel. Trump late on Wednesday accused the Organization of Petroleum Exporting Countries (OPEC) of driving up fuel prices. “The OPEC Monopoly must remember that gas prices are up & they are doing little to help. If anything, they are driving prices higher as the United States defends many of their members for very little $’s. This must be a two way street. REDUCE PRICING NOW!” Trump wrote on Twitter. “With contentious midterm U.S. elections looming, the President continues to strong-arm Saudi Arabia to increase oil supplies which, at least for now, is containing price action below WTI $75 per barrel,” said Stephen Innes, Head of Trading for Asia/Pacific at futures brokerage OANDA. OPEC together with a group of non-OPEC producers led by Russia started to withhold output in 2017 to prop up prices. Recent price rises have also been spurred by a U.S. announcement that it plans to re-introduce sanctions against Iran from November, which will also target its oil industry. “A key driver of the rise in prices has been the OPEC-Russia deal to cut oil output, compounded by collapsing Venezuelan production and the U.S. decision to end the Iran deal,” National Australia Bank (NAB) said in its July outlook. Ship brokerage Banchero Costa said Iran’s crude oil production was currently around 3.8 million barrels per day (bpd), but added “there is the risk of production decreasing going forward as exports are again affected by renewed sanctions implemented by the U.S.” OPEC and Russia announced in June they were willing to raise output to address concerns of emerging supply shortages due to unplanned disruptions from Venezuela to Libya, and likely also to replace a potential fall in Iranian supplies due to U.S. sanctions. NAB said its oil price forecasts “point to Brent spending the next few months largely in the mid-to-high $70s (per barrel) range, although meaningful OPEC-Russia output increases could push prices lower later in the year and higher U.S. shale production should impose an upside limit on WTI.” Meanwhile, U.S. crude oil production has soared by 30 percent in the last two years, to 10.9 million bpd. That means just three countries, Russia, the United States and Saudi Arabia, meet a third of global oil demand. Ryan Spooner Jersey
Explorers resume oil, gas search as prices perk up
A growing fleet of ships is scanning oceans in search of new oil and gas fields as energy companies, now with more cash thanks to stronger crude prices, gradually resume spending on seismic services after a four-year downturn. A doubling in the area contracted for seismic work in the first quarter this year from the last three months of 2017 has injected optimism into surveillance firms, with a global fleet of about 24 vessels, most of whom struggled to survive in the past years. But they say the road to recovery remains bumpy with producers big and small not keen on drilling for new reserves unless oil prices, which have more than doubled from 2016 lows, stay high for at least a year. Still, with crude prices stabilising well above $60 a barrel in the past six months, companies including mid- and small-sized independents such as Woodside Petroleum Ltd, Kosmos Energy Ltd and Tullow Oil PLC have helped boost demand for surveillance. The total area tendered by upstream companies for seismic work doubled to 40,000 square kilometres in the first quarter this year from October-December last year, said Duncan Eley, chief executive officer at Polarcus which owns a seismic fleet. “That’s positive in isolation,” said Eley, keeping his optimism in check even as he pointed to a busy fourth quarter for geophysical work in Asia Pacific, particularly for gas with demand forecast to soar in coming decades. Gas projects in Myanmar could take two to three vessels from the global fleet, while there are also potential activities in Malaysia, Australia, India and Papua New Guinea, where Exxon Mobil and Total plan to feed more gas into their existing liquefied natural gas infrastructure, Eley said. That marks a stark change from the dark days of 2015 and 2016 when orders for geophysical survey work came to a grinding halt as oil prices plummeted from over $100 a barrel to less than $50. Petroleum Geo Services (PGS), the world’s largest seismic operator, was also seeing better opportunities now than last year. “The recent increases we’ve seen are primarily driven by Africa and Brazil when it comes to bidding for contract work,” said Bard Stenberg, PGS’ senior vice president for investor relations and communication. Demand for geophysical data at producing oil and gas fields, also known as 4D seismic survey, has also increased as explorers sought to maximise output from these assets, the two executives said. PGS expects to secure between 20 and 25 4D seismic jobs this year, up from 16-17 in 2017, Stenberg said, with most of it located in the North Sea, West Africa and Brazil. OIL PRICE IS KEY The increased work should help improve the company’s earnings which remain well below pre-crisis levels. PGS’s current margins on its contracts for seismic ships are breakeven on EBITDA (earnings before interest, tax, depreciation, amortization) basis, versus EBIT margins of nearly 30 percent in 2013, said Stenberg. For earnings to grow and for producers to start drilling for new resources, oil prices will have to hold at current levels for at least another 12 months, company executives and analysts say. “For us, more than $60 is a positive and more than $70 is a bonus in terms of our clients’ sentiment,” Eley said. Right now, financiers “would rather see funds go towards development activities rather than exploration,” said Readul Islam, senior analyst at Rystad Energy, adding drilling can cost far more than collecting seismic data, running up to hundreds of millions of dollars for a well. “At least for the next year or so companies will run their economics on projects around $60 oil, so investment in greenfield projects will not change that much,” said Kevin Robinson, vice president of Malaysian oil and gas service company Sapura Energy. The global flood of U.S. oil is also limiting interest in finding new oil and gas reserves, and restraining the rush for geophysical surveys. The United States is on course to be the world’s largest oil producer this year, overtaking Russia and Saudi Arabia, spurred by its growing shale oil output and exports. “There’s no question that there’s a good sense of optimism and confidence is backed by the (oil) price,” said Visal Leng, the Asia-Pacific President of oilfield services provider Baker Hughes GE. “But having said that, we see that U.S. production will continue to be a bit of a disruptor in global supply.” Lamar Jackson Womens Jersey
Industries given 90 days to switch to approved fuels
Delhi Pollution Control Committee (DPCC) has notified the “approved” fuels in the capital, which include cleaner options like BS-VI petrol and diesel, CNG, LPG, aviation turbine fuel and biogas. The notification, which seeks to eliminate a range of dirty fuels to reduce toxic emissions from industries, transport and domestic sectors, also grants 90 days to the industries to switch to the approved options, following which action will be taken against violators. The list also includes firewood for crematoriums, wood charcoal for tandoors, grills and ironing, and refuse-derived fuels for waste-to-energy plants. Coal with low sulphur (less than 0.4%) can be used only in thermal power plants. The notification also said any other clean fuel specified by the Delhi government could be added to the list. All other fuels will be deemed “unapproved” for use in the national capital territory of Delhi. Welcoming the decision, experts said it was a right step to control pollution in Delhi. “Dust particles in the air get coated with toxic substances from combustion and can go deep into the lungs. Cleaner fuels for combustion are an important step forward to reduce the toxicity of emissions,” said Anumita Roy Chowdhury, executive director (research and advocacy) at Centre for Science and Environment (CSE). According to CSE, the notification virtually eliminates the use of coal from everything except in power plants. “With other dirty fuels like petcoke and furnace oil also banned, industrial units will have to shift to cleaner options,” Roy Chowdhury said. Christian Covington Womens Jersey