LNG Boom Hits a Snag in Louisiana’s Crowded Waterways
As U.S. LNG exporters expand plants and propose new facilities along the Texas and Louisiana coasts, an unlikely domestic bottleneck could delay capacity expansions and growth in America’s LNG exports. Crowded waterways along the Louisiana coast, where many new projects will be located, could create constraints to shipping LNG cargoes out of the U.S. Gulf Coast, potentially undermining the Trump Administration’s strong support for boosting LNG exports. Six LNG export projects in total are either operational or proposed along or near the Calcasieu Ship Channel, a waterway that connects the city of Lake Charles, Louisiana, with the Gulf of Mexico. One LNG exporter, Venture Global, has an operational plant, Calcasieu Pass, on the east bank of the waterway, and plans another project, CP2 just north of it. On the west bank of the waterway, directly across Venture Global’s facilities will be another proposed export plant, Commonwealth LNG. North of these projects is the Sempra Infrastructure-led operational Cameron LNG, 18 miles north of the Gulf of Mexico on the Calcasieu Ship Channel. Woodside’s proposed Louisiana LNG and Energy Transfer’s Lake Charles LNG projects are planned not too far north of Cameron LNG. The waterway is becoming crowded and has already raised concerns among operators about how they would share and prioritize access and shipping along the channel to the Gulf. Venture Global has called on the Federal Energy Regulatory Commission (FERC) in a letter to review the proposed waterway suitability assessment of the Commonwealth LNG project. The FERC “should ensure that the construction and planned operations of Commonwealth do not adversely impact existing LNG export terminals like Calcasieu Pass or other facilities utilizing the same or overlapping waterways,” Venture Global said in the letter carried by Bloomberg. Venture Global expressed concerns about vessel traffic and what would happen if the channel needs to be closed to allow vessels to and from the Commonwealth LNG project. Representatives for Commonwealth LNG told Bloomberg that its waterway suitability assessment and its Coast Guard letter of recommendations “comply with all applicable regulations.” No changes to the waterway suitability assessment are required, the company behind the project added. Commonwealth LNG targets a final investment decision (FID) in the third quarter of this year and production start-up in the first quarter of 2029. Yet, bottlenecks on the Calcasieu Ship Channel, with several projects competing for access and cargo shipping lanes, could constrain U.S. LNG exports later this decade if all projects begin commercial operations as planned. Supply from America is growing with the start-up of Venture Global’s second facility, Plaquemines LNG, in Louisiana, and the commissioning of Cheniere’s Corpus Christi Stage 3 project. Both Plaquemines LNG and Corpus Christi Stage 3 achieved first gas in late December 2024 and are ramping up operations and exports throughout this year. LNG exports from the United States have increased every year since 2016, rising from 0.5 billion cubic feet per day (Bcf/d) in 2016 to 11.9 Bcf/d in 2024, making the United States the world’s largest LNG exporter in both 2023 and 2024. U.S. LNG gross exports are expected to further increase by 19% to 14.2 Bcf/d in 2025, and by 15% to 16.4 Bcf/d in 2026, according to estimates from the U.S. Energy Information Administration (EIA). Developers of U.S. LNG export projects have started taking final investment decisions on new facilities this year, with several plants expected to add in 2025 to Woodside’s Louisiana LNG approval, despite rising construction costs due to President Trump’s steel and aluminum tariffs. Developers of at least seven U.S. LNG projects have recently said that they are targeting FID on these this year. If these projects go ahead, they could triple U.S. LNG export capacity by the end of the decade, adding to projects already under construction after FIDs taken in previous years.
Goldman Sachs Expects Another OPEC+ Superhike in September
The OPEC+ producers are expected in August to agree on another superhike in production for September that would complete the unwinding of the 2.2 million barrels per day (bpd) output cuts, Goldman Sachs said after the alliance surprised the market with a larger-than-forecast boost for August. The OPEC+ group is set to unwind the last 550,000 bpd of the 2.2-million-bpd cut in September, the investment bank said in a weekend note. On Saturday, the eight OPEC+ producers withholding supply to the market decided to ramp up oil production more aggressively than anticipated in August. At the virtual meeting Saturday, the eight core members led by Saudi Arabia agreed to add 548,000 bpd to global supply—exceeding earlier expectations of a 411,000 bpd hike. The move sets the bloc on track to fully unwind 2.2 million bpd of prior cuts nearly a year ahead of schedule. “Saturday’s announcement to accelerate supply hikes increases our confidence that the shift, which we started flagging last summer, to a more long-run equilibrium focused on normalizing spare capacity and market share, supporting internal cohesion, and strategically disciplining US shale supply, is continuing,” Goldman Sachs analysts wrote in a note carried by Reuters. Saudi Arabia, Russia, Iraq, UAE, Kuwait, Kazakhstan, Algeria, and Oman cited “current healthy oil market fundamentals and steady global economic outlook”, as well as “low oil inventories”, for their decision to boost August production by more than previously expected. The decision reflects short-term bullish fundamentals for this summer. The superhike also reaffirms OPEC’s major pivot from defending oil prices to boosting output and market share for producers such as Saudi Arabia that have stuck to their quotas, and punishing producers that have overproduced and now have to forego most of their share of the production hike. Of these overproducers, Iraq and Russia appear to be trying to fall in line, but Kazakhstan continues to defy OPEC+ and pumps hundreds of thousands of barrels per day above its output ceiling, citing its inability to force foreign oil majors to cut production from new projects. The actual production increase from OPEC+ will be lower than the headline figure suggests, due to compensations for previous overproduction. Nevertheless, the superhike in August – and possibly in September – would accelerate the market glut after peak summer demand starts to wane in the autumn and winter, analysts say.
Oil Prices Expected to Stay Under $70
Despite heightened tensions in the Middle East, oil prices are likely to remain capped below $70 per barrel for the rest of the year amid ample supply and uncertainties about demand. Unless actual supply disruptions occur in and around the hotspots in the Middle East, the price of oil will be a function of supply and demand, analysts and investment banks say. Growing supply from the OPEC+ group, although not as high as the monthly headline figure of 411,000 barrels per day (bpd) suggests, is set to create an oversupply on the market going into autumn, even if summer demand holds strong. On the demand side, peak summer travel season may justify higher supply, but lingering trade and economic uncertainties may cap upside to prices. As a result, most analysts expect oil prices to hover around the current levels in the mid-$60s per barrel and average below $70 a barrel for 2025. Currently, oil’s ‘normal’ price would be in the $70s range, but the market oversupply is keeping prices in the $60s, Rob Thummel, senior portfolio manager of Tortoise Capital, told BNN Bloomberg this week. “In order for oil prices to return to what we think is the $70s, kind of normal price, you need the market to really rebalance,” Thummel said. “What that means is either oil production in other locations is going to fall, and, or effectively, demand for oil is probably going to rise more than what people expect in the second half of the year.” According to Ole Hansen, Head of Commodity Strategy at Saxo Bank, crude oil may face headwinds in the second half of the year amid rising output and economic growth concerns. “OPEC8+ continues to ramp up production in an effort to punish overproducing quota cheaters, and to reclaim market share from higher-cost producers which may eventually have to dial down production amid lower price expectations,” Hansen said in a weekly commodities commentary. Major investment banks, including Goldman Sachs, Morgan Stanley, and JPMorgan, expect Brent crude prices to average $66.32 a barrel and WTI Crude to average $63.03 per barrel this year, according to a June survey by The Wall Street Journal. The responses in June were slightly higher compared to those in the May poll, but the analysts continue to see fundamentals as key for prices, and right now these fundamentals point to an oversupply amid uncertain economic prospects with the U.S. tariff policies. The Reuters survey of 40 analysts and economists in June also saw a slight increase in the price forecasts. Brent is seen averaging $67.86 per barrel in 2025, up from $66.98 a barrel expected in May. WTI is expected to average $64.51, up from $63.35 per barrel in May. However, analysts concur that the glut would cap rallies unless the Middle East conflict broadens and leads to more volatility and price spikes. In case an oversupply overwhelms the market if summer demand disappoints, OPEC+ is likely to act swiftly to put a floor under prices by pausing production increases. “We expect OPEC+ to exert caution in raising production, even putting plans on hold indefinitely at the first signs that prices may fall significantly,” Matthew Sherwood, lead commodities analyst at EIU, told Reuters. Next week could remove some uncertainty over the global economy and oil demand as July 9 is the end of President Trump’s 90-day pause on the so-called “reciprocal” tariffs. “We could see tariff increases reinstated on some US trading partners if trade deals are not concluded. This leaves a fair amount of uncertainty going into next week,” ING strategists Warren Patterson and Ewa Manthey wrote in a note on Thursday. The oil market is full of uncertainties, but current supply and demand balances point to an oversupply and subdued oil prices in the coming months, barring a supply disruption in the Middle East.
OPEC+ Speeds Up Oil Output Hikes, Adds 548,000 Bpd In August
OPEC+ agreed on Saturday to raise production by 548,000 barrels per day in August, further accelerating output increases at its first meeting since oil prices jumped – and then retreated – following Israeli and US attacks on Iran. The group, which pumps about half of the world’s oil, has been curtailing production since 2022 to support the market. But it has reversed course this year to regain market share and as US President Donald Trump demanded the group pump more to help keep gasoline prices lower. The production boost will come from eight members of the group – Saudi Arabia, Russia, the UAE, Kuwait, Oman, Iraq, Kazakhstan and Algeria. The eight started to unwind their most recent layer of cuts of 2.2 million bpd in April. The August increase represents a jump from monthly increases of 411,000 bpd OPEC+ had approved for May, June and July, and 138,000 bpd in April. OPEC+ cited a steady global economic outlook and healthy market fundamentals, including low oil inventories, as reasons for releasing more oil. The acceleration came after some OPEC+ members, such as Kazakhstan and Iraq, produced above their targets, angering other members that were sticking to cuts, sources have said. Kazakh output returned to growth last month and matched an all-time high. OPEC+, which groups the Organization of the Petroleum Exporting Countries and allies led by Russia, wants to expand market share amid growing supplies from rival producers like the United States, sources have said. With the August increase, OPEC+ will have released 1.918 million bpd since April, which leaves just 280,000 bpd to be released from the 2.2 million bpd cut. On top of that, OPEC+ allowed the UAE to increase output by 300,000 bpd.
India Plans to Deploy Over 1,000 Hydrogen Buses and Trucks by 2030
India is set to make a transformative leap in sustainable mobility, with plans to deploy over 1,000 hydrogen-powered buses and trucks by 2030. This ambitious initiative, part of the government’s National Green Hydrogen Mission, is designed to decarbonize the country’s long-haul transport sector, reduce reliance on fossil fuels, and position India as a global leader in hydrogen technology. The government has identified hydrogen as a practical and scalable solution for medium and heavy commercial vehicles, especially for long-distance freight and passenger transport. While battery electric vehicles are increasingly used for last-mile delivery, they face limitations in range and payload for long-haul operations. Hydrogen-powered vehicles, with their high energy density and faster refueling times, offer a compelling alternative to diesel trucks and buses, preserving cargo space and maximizing operational efficiency.
IOC draws up green hydrogen fuel retail network plan
Indian Oil Corp. (IOC), the country’s largest oil-marketing company with over 37,500 petrol stations, is working on a new business plan to set up green hydrogen fuel dispensing pumps across the nation, chairman Arvinder Singh Sahney said in an interview. Sahney said that apart from captive consumption at its refineries, where Indian Oil would look at replacing grey hydrogen with green hydrogen, the company aims to eventually cater to the mobility demand in the country, thereby retailing green hydrogen fuel cells.
Oil Prices Dip on Confirmation of Inventory Build
Crude oil prices opened weaker today following Wednesday’s release of U.S. oil inventory data that confirmed API’s estimate of a build. Regardless of the fact that the build, at 3.8 million barrels as estimated by the EIA, followed several weeks of draws, it pushed prices lower in the last trading day before the July 4th weekend. At the time of writing, Brent crude was trading at $68.62 per barrel and West Texas Intermediate was changing hands for $67.01 per barrel, both down from Wednesday’s close. The trend could be reversed before too long, however, after the Dallas Fed confirmed the expected slowdown in drilling activity in the shale patch. In its latest quarterly report, the Fed said industry executives pointed to declines in both oil and gas production during the second quarter of the year, with the oil production index falling to -8.9 and the natural gas production index to -4.5, which represents a sharp reversal from moderate growth earlier this year. The Dallas Fed also cited executives as saying they expected a lot less drilling going forward. Among the larger producers, with output of 10,000 bpd or more, 42% said they expected a significant decline in drilling activity, with many citing the Trump administration’s trade policies as a deterrent, and more specifically, the tariff push. “It’s hard to imagine how much worse policies and D.C. rhetoric could have been for US E&P companies,” one respondent to the survey said. “We were promised by the administration a better environment for producers, but were delivered a world that has benefited OPEC to the detriment of our domestic industry.” Meanwhile, a trade deal between the United States and Vietnam infused markets with a sense of certainty, according to Reuters, that could result in stronger oil demand, stimulating bullish sentiment among traders. The deal will see 20% tariffs imposed on Vietnamese exports to the U.S.
Standard Chartered: Oil Markets Can Easily Absorb Extra OPEC+ Barrels
Oil markets kicked off the new year in a downbeat mood, with Wall Street analysts almost unanimously predicting a huge oversupply in 2025 even if OPEC+ did not add a single barrel back into the market. Well, it’s six months on, and oil markets have continued to defy these bearish expectations. The eight OPEC+ countries that made additional voluntary cuts in 2023 are set to meet on July 6, with expectations that the ministers will continue the unwinding of the November 2023 tranche of cuts, increasing targets by 411 thousand barrels per day (kb/d) for the fourth successive month. Commodity analysts at Standard Chartered have also predicted a final 411kb/d increase will be announced at the August meeting, resulting in the full unwinding of the voluntary cuts that totalled about 2.2 million barrels per day (mb/d). Thankfully, the rapid unwinding of the cuts has proved to be a highly successful strategy, with oil markets having little trouble absorbing the extra barrels. Inventories remain very low, while the prompt market remains backwardated and with the previous market fears of historic surplus giving way to a general acceptance that fundamentals entered the year stronger than most traders believed with demand remaining robust. The latest EIA weekly data was bullish, with crude oil inventories falling 5.84 mb w/w to 415.11 mb, taking them 45.59 mb lower y/y and 51.39 mb below the five-year average. Indeed, crude inventories are currently just 5.16 mb above their five-year low, having declined by 28.05 mb (801kb/d) over the past five weeks alone while the deficit to the five-year has widened to the largest since June 2022. Distillates remain the tightest oil product group: distillate inventories fell counter-seasonally by 4.07 mb w/w to 105.33 mb, increasing the deficit below the five-year average by 4.44 mb to -26.3 mb. Implied gasoline demand rose 389 kb/d w/w to 9.68 mb/d, the highest weekly reading since Christmas 2021. The 30 June release of the EIA’s Petroleum Supply Monthly revised April gasoline demand higher by 30 kb/d to 8.91 mb/d, taking the y/y increase from 0.8% to 1.1%. Total April oil demand was revised 488 kb/d higher to 20.213 mb/d, good for a y/y increase of 0.6%. StanChart has predicted that oil markets will continue to absorb extra OPEC+ production easily in the short term, and has even forecast a global stock draw of 0.9 mb/d in the third quarter following a 0.2 mb/d build in the June quarter. According to the analysts, the tightening in Q3 will primarily be the result of a 1.4 mb/d q/q increase in demand while non-OPEC+ output is expected to remain fairly flat. However, StanChart has warned that the lack of compliance to set quotas by the likes of Kazakhstan could become a more significant issue when the seasonal demand strength starts abating in the fourth quarter of the current year or the first quarter of 2026. Still, the experts say OPEC+ may not need to curtail production in Q1 2026, with the projected stockbuild not likely to be any larger than normal while inventories will be starting from very low levels. However, the first line of cuts is likely to come from the overproducers if the situation does indeed warrant some production cuts. Meanwhile, EU natural gas inventories have continued to rise at a rapid clip, with the y/y deficit narrowing on 32 of the past 34 days while the deficit below the five-year average has narrowed on 25 of the past 32 days. According to Gas Infrastructure Europe (GIE) data, EU inventories clocked in at 67.98 billion cubic meters (bcm) on 29 June, 21.58 bcm lower y/y and 10.37 bcm below the five-year average. The w/w build was 2.70 bcm, 16.5% higher than the five-year average. The EU inventory builds are being driven by higher LNG flows. According to StanChart data based on European Network of Transmission System Operators for Gas (ENTSOG) daily data, LNG flows into the EU averaged 429 million cubic metres per day (mcm/d) over the past five months, considerably higher than 342 mcm/d average for last year’s corresponding period. EU gas demand remains subdued at 796 mcm/d, good for a y/y decline of 2.8%. European gas prices remain exposed to significant downside risk, with a potential path below EUR 30 per megawatt hour (MWh) thanks to weak demand, stronger-than-usual inventory builds, poor market technicals and reduced concerns about LNG supply disruptions due to the Middle East conflict.
Diesel days numbered? India eyes massive LNG truck expansion by 2040
India’s liquefied natural gas (LNG) truck population is projected to grow from around 700 trucks in FY24 to nearly 2,00,000 by 2040 under the Petroleum and Natural Gas Regulatory Board’s (PNGRB) Good-to-Go (GtG) scenario and to 5,00,000 in a high-growth Good-to-Best (GtB) scenario. In contrast, China has already crossed 8,00,000 LNG trucks with a network of 6,000 refuelling stations. According to the demand assessment study conducted by PNGRB, India is aiming to transition one-third of its long-haul trucking fleet to LNG over the next 15 years to reduce diesel consumption and lower carbon emissions in the freight sector. The current penetration of LNG in the trucking segment remains limited, with only 20 stations and 700 trucks operating as of FY24. The report notes that diesel-powered road freight accounts for nearly 65–70 per cent of India’s logistics share and contributes 35–40 per cent of road transport emissions. Based on stakeholder consultations and infrastructure outlook, LNG truck numbers may rise to 30,000 by 2030 in the GtG scenario and 50,000 in the GtB case. By 2040, this may rise further to 2,00,000 and 5,00,000, respectively,” the report said. The study estimates daily LNG consumption per truck at 131.4 scmd, assuming 320 km travel per day with average mileage of 3.2 km/kg. In contrast, China’s LNG trucking ecosystem is significantly larger, with over 8,00,000 trucks already deployed and around 6,000 LNG stations in operation. The PNGRB report highlights that China achieved this scale by creating a supportive ecosystem involving pricing support, dedicated manufacturing lines, and extensive fuelling infrastructure. Europe has about 80,000 LNG trucks and 525 stations, while the US fleet comprises 35,000 LNG trucks with 250 stations. India’s LNG push has started with the government’s mandate to open 50 LNG stations in the initial phase. Industry feedback suggests that expansion to 1,000 stations will be required to support wider adoption. The report also notes stakeholder suggestions for incentivising domestic LNG manufacturing, tax exemptions, waiver of road tolls for LNG vehicles, and allocation of domestic gas to stabilise fuel prices.
Pakistan looking to sell excess LNG amid supply glut curbing local gas output – document
Pakistan is exploring ways to sell excess liquefied natural gas (LNG) cargoes amid a gas supply glut that could cost domestic producers $378 million in annual losses, according to a presentation and a government official familiar with the matter. The country has at least three LNG cargoes in excess that it imported from top supplier Qatar and has no immediate use for, and is currently selling natural gas at steep discounts to local users, a second government official said. Power generation from gas-fired power plants, which has historically accounted for a lion’s share of LNG use in the country, has declined for three straight years ended 2024, with cheaper solar power use dramatically gaining at the expense of gas-fired generation, data from energy think-tank Ember showed. That has forced domestic producers of the fuel to curb production. Pakistan is currently exploring the possibility of transferring LNG cargoes to rented tankers for “offshore storage and onward sale,” state-owned oil and gas producer OGDCL said in a presentation to industry and government. “Excess LNG in the gas network has resulted in significant production operations impact for local exploration and production companies over last 18 months,” OGDCL said, adding that it had forced curtailment of domestic supply. The domestic industry could suffer $378 million in losses over the next 12 months at the current rate of curtailment, according to the presentation dated May 29 reviewed by Reuters. It is not immediately clear if Pakistan’s long-term LNG import contracts with Qatar Energy allows for a resale of cargoes. One of the government officials said the country was still exploring ways to do it. Qatar typically has a destination clause in long-term supply contracts with buyers that restrict where the cargoes can be sold. Qatar Energy did not immediately respond to a request seeking comment. Pakistan has already deferred five contracted LNG cargoes from Qatar without financial penalty, shifting delivery from 2025 to 2026, as the country grapples with surplus capacity. Pakistan’s petroleum minister Ali Pervaiz Malik declined to comment on the presentation, but said renegotiating contracts with Qatar was a “complex” process that could take at least a year, and a final decision on initiating it had yet to be made. “While the existing contract with Qatar allows Pakistan to decline vessels, doing so incurs penalties and other complications,” Malik told Reuters. The glut has stemmed from several gas-fired power plants, previously operating under must-run contracts, now being sidelined, Malik said. “It was expected that summer season will create extraordinary demand but the trend indicates the opposite,” OGDCL said in the presentation.