India plans new strategic oil reserve to enhance energy security
India is exploring building three new strategic oil reserves to boost its emergency stockpile and strengthen energy security, the head of the company in charge of strategic reserves said on Wednesday. India, the world’s third-biggest oil importer and consumer, imports more than 80% of its oil needs and is constantly diversifying its crude sources to mitigate the impact of geopolitical crises on its oil procurement. State-run engineering consultancy Engineers India Ltd is doing feasibility studies to build the new reserves, Indian Strategic Petroleum Reserve Ltd’s CEO L R Jain told Reuters. “In case of exigencies, we will be better prepared,” he said. India currently has strategic petroleum reserves at three locations – Mangalore, Padur and Vizag – in southern India to store up to 5.33 million tons of crude that could be tapped in the case of supply disruptions. It plans to create a new 5.2 million-5.3 million ton reserve at salt caverns at Bikaner in the desert state of Rajasthan, and a 1.75-million ton facility at Mangalore in southern Karnataka state, he said. It will also create a reserve in Bina, central Madhya Pradesh state, with capacity yet to be decided, he said. After feasibility studies, the projects will require approval from the federal cabinet. They will come in addition to a new 2.5 million-ton strategic petroleum reserve at Padur and a 4 million-ton facility at Chandikhol in eastern Odisha state that have already been approved. India has over the years overhauled its policy on strategic petroleum reserves to allow private participation and commercialisation, mirroring the model adopted by countries such as Japan and South Korea which allow private lessees, mostly oil majors, to trade the crude. “We are looking for 90 days of reserves,” Jain said. “And Indian fuel demand is also rising, so we need additional storage.” Expanding oil storage capacity would also help India join the International Energy Agency, which requires its members to hold a minimum of 90 days of oil consumption. India’s storage capacity, including that held by companies and in transit, is currently sufficient to meet its fuel demand for 75 days.
China Continues to Buy a Lot of Iranian Crude Oil
Chinese refiners continue to buy high volumes of crude oil from Iran, with first-half imports at the major port clusters estimated at nearly 1.4 million barrels per day (bpd), according to oil flow tracking data from Kpler cited by Bloomberg. Ports near industrial clusters Qingdao, Dalian, and Zhoushan are importing crude from Iran in several legs from the Persian Gulf via Malaysia with ship-to-ship (STS) transfers using shadow fleet vessels and tankers blacklisted by the United States. Officially, China’s customs data show there haven’t been any crude imports from Iran since 2022. Unofficially, China buys nearly 90% of all of Iran’s crude exports in multiple-stage journeys and transfers from one tanker to another. Last month alone, ports near Qingdao welcomed a total of 15.5 million barrels of Iranian crude, according to Kpler’s data. These barrels were worth nearly $1 billion in revenue for Iran at current prices for its discounted crude, Bloomberg has estimated. China hiked its imports of crude oil from Iran in June, as Iran accelerated loadings in May and independent Chinese refiners bought more discounted Iranian barrels. Amid overall high imports in recent weeks, thanks to the lower oil prices in April and May when cargoes were bought, China significantly boosted its imports of crude from Iran this month, according to data from tanker-tracking firms cited by Reuters. The high volumes of Iranian oil going into China is due to multi-year high Iranian crude oil loadings in May and Chinese independent refiners, the so-called teapots, bringing in more supply of the cheaper Iranian crude to fill inventories for the peak summer demand season. Analysts expect Chinese oil imports from Iran to remain at high levels in the coming weeks amid signals from the U.S. Administration that it would be more lenient toward China buying Iran’s oil. Following the U.S. strikes on Iranian nuclear sites, U.S. President Donald Trump posted on Truth Social that “China can now continue to purchase Oil from Iran. Hopefully, they will be purchasing plenty from the US, also.
ONGC in talks with Saudi Arabia on new refinery
India’s state-owned Oil and Natural Gas Corporation (ONGC) is reportedly in talks with Saudi Arabia to develop a greenfield refinery in Gujarat, the home state of Indian Prime Minister Narendra Modi. The proposed coastal refinery will be set up in Jamnagar district through a joint venture company, an unnamed government official told moneycontrol.com, an Indian financial portal.
Commercial LPG cylinder price cut by Rs 58.50 from today, ATF price hiked
Oil marketing companies have cut the price of 19 kg commercial LPG gas cylinders by Rs 58.50, effective 1 July. In Delhi, this brings the new price down to Rs 1,665 per cylinder. Meanwhile, price of jet fuel (ATF) was sharply increased by 7.5 per cent after three rounds of price cuts. Aviation turbine fuel (ATF) prices have been raised by Rs 6,271.5 per kilolitre, or 7.5%, reaching Rs 89,344.05 per kilolitre in the national capital, which is home to one of the busiest airports in India, according to state-owned fuel retailers. This price hike comes as a significant reversal, accounting for half of the total reductions made over the past three months. The last reduction was on June 1, when prices fell by Rs 2,414.25 per kilolitre (2.82%), bringing the rate down to Rs 83,072.55 per kilolitre. Earlier, there were additional cuts of 4.4% (Rs 3,954.38 per kilolitre) on May 1 and a notable 6.15% (Rs 5,870.54 per kilolitre) on April 1. The recent increase in ATF prices aligns with a rise in international oil prices following Israel’s recent military actions against Iran. This escalation in fuel costs is expected to add financial strain on commercial airlines, which allocate nearly 40% of their operating expenses to fuel.
APM gas price hits ceiling of $6.75 per mmBtu
he price of natural gas used for producing CNG for vehicles and cooking gas was raised 5 per cent for July, following a surge in oil prices triggered by Israel’s military strike on Iran. As part of the monthly revision, the price of natural gas from legacy fields operated by state-owned companies was increased to USD 6.75 per million British thermal units, up from USD 6.41, according to a notification from the Petroleum Planning and Analysis Cell (PPAC) of the Oil Ministry. USD 6.75 per mmBtu is the ceiling price for gas from legacy fields, known as APM gas, which accounts for roughly half the input used in producing CNG. It is also utilised in power generation, fertiliser production, and piped directly to households for cooking A higher input gas price would squeeze margins of city gas retailers. City gas retailers may choose to hike CNG prices if the increase pinches them. APM gas price is revised on the first of every month, set at 10 per cent of the average import price of crude oil in the preceding month. But this price is subject to a floor or minimum rate and a ceiling or maximum rate. The ceiling price for 2025-26 is USD 6.75.
Russia’s Rosneft Oil Company in early talks with Reliance to sell stake in India unit
Russian oil giant PJSC Rosneft Oil Company is in early talks with Reliance Industries for sale of its 49.13 per cent stake in Nayara Energy, which operates a 20-million tonnes-a-year oil refinery and 6,750 petrol pumps in India, sources said. Reliance has held preliminary talks for acquisition of Nayara, which will help it overtake state-owned Indian Oil Corporation (IOC) to become India’s No.1 oil refiner as well as give a meaningful presence in the fuel marketing space. But the talks are at preliminary stage and there is no guarantee that they may lead to a definite deal as valuation remains a sticky ground, three sources with direct knowledge of the matter said. Top Rosneft officials have visited India at least thrice in the last one year, including visits to Ahmedabad and Mumbai, for talks with potential investors
Russia Tries Again to Expand LNG Exports Upended by Sanctions
Russia is taking another crack at expanding exports of liquefied natural gas after US sanctions stalled efforts last year. An LNG vessel has docked at the Arctic LNG 2 export facility for the first time since October, according to ship-tracking data compiled by Bloomberg and satellite images. The facility was supposed to be a cornerstone of Moscow’s goal to increase LNG exports threefold by 2030, but has been idle for months after struggling to find buyers willing to break western restrictions. Russia has the pieces in place to meaningfully boost LNG exports as it expands its shadow fleet. Since the 2022 invasion of Ukraine, Russian gas pipeline exports to Europe have dwindled, and shipping more fuel via seaborne LNG tankers provides an attractive revenue stream to fill Moscow’s coffers. Shadow Fleet At least 13 ships, including those that can navigate icy waters, have been marshaled to potentially service Arctic LNG 2, with some changing management companies several times to help obfuscate the actual owners. According to ship-tracking data compiled by Bloomberg they include: “Russia does have more vessels at its disposal compared to the summer/fall of 2024,” Malte Humpert, founder of the Arctic Institute, a Washington-based think-tank, said in an email. “If it can find buyers, this small fleet should be sufficient to lift cargoes.” Eight shipments were exported from Arctic LNG 2 between August and October 2024, but never docked on foreign shores. Instead, the gas was offloaded into two Russian storage units in the Barents Sea and its Far East region. Large-scale production halted in October after ice built up around the facility and made transport by traditional vessels challenging. Russia’s first domestically built ice-class LNG tanker may come online in the second half of this year if it passes remaining sea trials, Interfax reported Wednesday, citing Sovcomflot Chief Executive Officer Igor Tonkovidov.
Middle East Oil Disruption Risk Plunges to 4%
The risk of crude oil supply disruption in the Middle East has dropped to just 4%, according to options traders, Goldman Sachs said in a new note, after Israel and Iran agreed to a ceasefire earlier in the week. The bank’s analysts reported that options traders now see a 60% chance for Brent crude to average between $60 and $70 over the next three months, with the chance of the benchmark topping $70 per barrel at 28%, Reuters wrote. Among the factors driving these expectations, Goldman listed the absence of any disruption during the latest military action in the Middle East, motivation in the U.S. and China to not let oil go much higher, and the prospect of a build in global oil inventories later in the year. Earlier in the week, Goldman Sachs warned that Brent could surge above $100 per barrel in case Iran blocks the Strait of Hormuz. The investment bank said this price could materialize if oil flows via the vital chokepoint were cut by half for a month and remained 10% lower than normal over the next 11 months. After the initial price shock under Goldman’s scenario, Brent would moderate to $95 per barrel over the final quarter of this year, the bank’s analysts also said on Monday. This was a substantial revision of an earlier forecast for oil prices made by the bank last week. Then, Goldman Sachs estimated a geopolitical premium of approximately $10 per barrel on Brent crude, though it suggested oil could exceed $90 if Iranian supply were disrupted. Now that the risk of such a severe disruption is largely gone, forecasts are once again being revised in a hurry. ING analysts said in a note today that they expected OPEC+ to agree the addition of another 411,000 bpd to combined output at its next meeting on July 6, boosting global supply.
Oil Prices Set For Weekly Loss as War Premium Evaporates
Crude oil prices were set to end the week lower than they started it as Israel and Iran stopped bombing each other, alleviating fears of a supply disruption in the Middle East. At the time of writing, Brent crude was trading at $68 per barrel, with West Texas Intermediate at $65.55 per barrel. That’s down from over $77 for Brent crude and $73 per barrel for WTI at the end of last week. Still, both benchmarks inched higher on Thursday this week, after the U.S. Energy Information Administration reported a draw in both crude oil and fuel inventories, and signs of strengthening demand and a ramp-up in refining activity. “The market is starting to digest the fact that crude oil inventories are very tight all of a sudden,” Phil Flynn, an analyst from Price Futures Group, told Reuters. ING analysts, meanwhile, noted that now that the risk of a Middle Eastern supply disruption was off the table, focus would return to tariffs. The U.S. is due to finalise trade agreements with 10 countries after reaching a deal with China earlier in the month. If the other ten deals are successful, which will likely be the case, the tariff threat will also be removed from the oil market, which may provide a boost for demand and, consequently, prices. A cheaper U.S. dollar should also help. The greenback slumped this week on reports President Trump was going to make his Fed chair pick early. Besides the tariff business, ING also noted OPEC+’s next meeting, due to be held on July 6, which the bank’s analysts expect will result in yet another 411,000-bpd production boost. “These supply hikes should ensure that the oil market moves into a large surplus towards the end of the year. This assumes we don’t see a re-escalation in the Middle East, which would lead to supply losses,” Warren Patterson and Ewa Manthey wrote.
ONGC well in Assam capped after 16 days of gas leakage: Hardeep Singh Puri
Union Minister Hardeep Singh Puri on Friday said ONGC has successfully capped the blowout of its crude oil well in Assam’s Sivasagar district after 16 days of gas leakage from there. He said the capping was done without any injury, casualty or fire. “ONGC has successfully capped the blowout of well RDS#147A at 1115 hours hrs today. This blowout started on 12th June and has been capped successfully within shortest possible time following all the best practices,” Puri said in a post on X. He said the crisis management team of Oil and Natural Gas Corporation (ONGC) along with the international well control experts “finally brought the curtains down on the gas well blowout through meticulous planning and concerted efforts in a safe manner, without any injury, casualty or fire, testifying the competency of crisis management”. The minister for Petroleum and Natural Gas also thanked Assam Chief Minister Himanta Biswa Sarma and state government officials for their support to the team on the ground. The blowout took place on June 12 at Well No RDS 147A of Rig No SKP 135 of Rudrasagar oil field of ONGC at Barichuk in Bhatiapar. A private firm, SK Petro Services, was operating the well on behalf of the state-run Maharatna company.