Dallas Fed Survey Respondents Bearish on Short Term Oil Prices
The latest Dallas Fed Energy Survey has revealed that activity in the oil and gas sector increased slightly in the first quarter of 2025. The survey found that U.S. oil and gas production increased slightly in the first quarter, with the oil production index moving up from 1.1 in the fourth quarter to 5.6 in the first quarter. Meanwhile, the natural gas production index also improved from -3.5 to 4.8. U.S. oil rig count gained one to 487 according to the latest Baker-Hughes survey, keeping it in the 472-488 rigs range for the 40th consecutive week. Oklahoma and its borders were the most dynamic area in the latest data, with Granite Wash drilling increasing by two w/w to a six-year high of 10 rigs and STACK drilling adding two w/w to 12 rigs. In the Permian Basin, Delaware Basin drilling fell by three w/w to 164 rigs while the Midland Basin rig count was unchanged at 110 rigs and other Permian activity was unchanged at 27 rigs. The US gas rig count fell by one to 100, continuing its long sideways move; it has stayed within six either side of 100 rigs for 48 consecutive weeks. However, the company outlook index decreased 12 points to -4.9, suggesting slight pessimism among energy companies, while the outlook uncertainty index jumped 21 points to 43.1. Costs increased at a faster pace relative to Q4 2024, with the input cost index advancing from 23.9 to 30.9 among oilfield services firms while the development costs index increased from 11.5 to 17.1 among E&P firms. On average, respondents expect a West Texas Intermediate (WTI) oil price of $68 per barrel at year-end 2025, slightly lower than the current price of $69.87 per barrel. However, respondents were more bullish about long-term oil prices, expecting WTI oil price of $74 per barrel two years from now and $82 per barrel five years from now. Respondents also expect a U.S. natural gas price of $3.78 per million British thermal units (MMBtu) at the end of the current year, again slightly lower than the current price of $3.88/MMBtu. However, they expect gas prices to hit $4.30/MMBtu two years from now and $4.83/MMBtu five years from now.
Oil Prices Gain On Venezuela Tariffs
Oil prices rallied in Wednesday’s session, a day after U.S. President Donald Trump announced that any country that buys oil or gas from Venezuela will pay a 25% secondary tariff on trades with the United States. Trump claims that Venezuela has sent “tens of thousands” of people to the U.S. who have a “very violent nature.” Brent crude for May delivery gained 1.2% to trade at $73.89 per barrel at 11.30 am ET while the comparable WTI crude contract climbed 1.2% to $69.84. The secondary tariffs will target China, India, Spain, Italy and Cuba–all major buyers of Venezuelan oil. The tariffs could disrupt global oil supply chains, with U.S. oil companies likely to emerge as key beneficiaries of Venezuela’s customers looking for alternative supplies. Earlier this month, Chevron Corp. (NYSE:CVX) received a 30-day notice from the Trump administration to wrap up its operations in Venezuela. The deadline, set for April 3, provides the company only 30 days instead of the normal six-month wind-down period. Since 2022, Chevron has been allowed to operate in Venezuela as an exception to U.S. sanctions, exporting crude to the United States. According to Secretary of State Marco Rubio and other foreign-policy hawks, Chevron has been providing a financial lifeline for Maduro’s regime to enrich itself and suppress civil rights. Venezuela produced about 20% of Venezuela’s oil in 2024, close to Maduro’s goal of 1 million barrels per day. Chevron is the only major oil producer with a waiver to operate in Venezuela despite Washington’s sanctions against President Nicolás Maduro’s regime. Venezuela’s crude oil production has declined sharply from 3.2 million b/d in 2000 to 735,000 b/d in September 2023 mainly due to sanctions and poor maintenance. Global Oil Demand Robust Despite Tariffs Oil prices have held up surprisingly well over the past couple of weeks despite the presence of numerous headwinds that could have pushed Brent prices more decisively below $70/bbl. Indeed, front-month Brent has exceeded $70/bbl at some point on each of the past eight trading days. Speculative positioning, however, remains skewed to the short side of the market, particularly for gasoline and crude oil. Trader sentiment remains negative largely due to concerns over the potential demand effects of U.S. tariff policies and the potential supply effects of a U.S. switch to policies that are more accommodative of Russian targets. Despite the prevailing bearish sentiment, Standard Chartered analysts argue that global oil demand remains strong, averaging 102.77 million barrels per day (mb/d) in January—a 2.19 mb/d year-on-year increase. The bank forecasts demand will surpass 105 mb/d by June and peak at 105.6 mb/d in August, with full-year growth projected at 1.41 mb/d. They also expect demand to outpace supply in Q2 and Q3. While U.S. tariff policy remains a key downside risk, current demand fundamentals appear solid, supporting a more bullish outlook than recent market sentiment suggests. Standard Chartered sees a few reasons why oil prices haven’t collapsed further in recent weeks. These include an oversold market, underpriced geopolitical risk, and a shift in trader sentiment away from excessive bearishness. Additionally, bullish inventory data reports and a weaker-than-expected U.S. shale supply outlook are lending support.
GAIL gets Petroleum and Natural Gas Regulatory Board nod to expand key pipeline
GAIL (India) Limited on Wednesday, March 26, said it has received the Petroleum and Natural Gas Regulatory Board’s (PNGRB) approval for the capacity augmentation of its Dahej-Uran-Dabhol-Panvel Natural Gas Pipeline (DUPL-DPPL) network. The approval allows GAIL to increase the capacity of the pipeline from the existing 19.9 million metric standard cubic metre (MMSCMD) per day to 22.5 MMSCMD. The expansion is expected to contribute significantly to the company’s business growth by facilitating increased natural gas transportation. The PNGRB approval is valid for three years from the date of communication.
UAE loses out as India opts for cheaper Russian naphtha
The UAE, led by Abu Dhabi, has lost its position as India’s biggest supplier of the refined crude oil product naphtha as discounted Russian cargoes flood the market. Naphtha has many uses including as a precursor to gasoline and other liquid fuels, and as solvents or diluents for paints and the rubber industry. India is Asia’s seventh biggest importer of naphtha, having imported 3 million tonnes in the previous 12 months. According to ship-tracking data from OilX and Kpler, the UAE’s share of India’s naphtha imports – primarily supplied by Abu Dhabi National Oil Company (Adnoc) – has dropped to just over 20 percent from close to 40 percent a year ago. By contrast, Russia’s share of India’s naphtha imports has grown by 15 percentage points to more than 50 percent now, the data show.
Trump: 25% Tariff On Anyone Who Buys Venezuelan Oil & Gas
U.S. President Donald Trump has announced that any country that buys oil or gas from Venezuela will pay a 25% secondary tariff on trades with the United States, Reuters reported on Monday, with Trump claiming that Venezuela has sent “tens of thousands” of people to the U.S. who have a “very violent nature. Earlier this month, Chevron Corp. (NYSE:CVX) received a 30-day notice from the Trump administration to wrap up its operations in Venezuela. The deadline, set for April 3, provides the company only 30 days instead of the normal six-month wind-down period. Since 2022, Chevron has been allowed to operate in Venezuela as an exception to U.S. sanctions, exporting crude to the United States. According to Secretary of State Marco Rubio and other foreign-policy hawks, Chevron has been providing a financial lifeline for Maduro’s regime to enrich itself and suppress civil rights. Venezuela produced about 20% of Venezuela’s oil in 2024, close to Maduro’s goal of 1 million barrels per day. Chevron is the only major oil producer with a waiver to operate in Venezuela despite Washington’s sanctions against President Nicolás Maduro’s regime. Last year, the United States Office of Foreign Assets Control (OFAC) eased some sanctions on Venezuela but retained sanctions on PdVSA. OFAC has issued a new license allowing certain transactions related to the export or re-export of liquefied petroleum gas (LPG) to Venezuela until July 8, 2025. However, transactions with Petróleos de Venezuela, S.A., the Venezuelan state-owned oil and natural gas company in which PdVSA has a 50 percent or greater interest, remain prohibited under the sanctions imposed by various executive orders. Venezuela’s crude oil production has declined sharply from 3.2 million b/d in 2000 to 735,000 b/d in September 2023 mainly due to sanctions and poor maintenance; in contrast, Argentina’s crude output has been increasing with Argentine President Javier Milei vowing to shake up the system.
Indian Refineries Slashing Spot Tenders as Russian Oil Flows Back
Indian refiners will issue fewer tenders for the purchase of crude oil on the spot market in the coming month as Russian supplies bounce back, Reuters has reported. Previously, Bharat Petroleum CFO revealed that middlemen who supply Russian oil stopped offering cargoes following U.S. sanctions imposed by the Biden administration targeted Russian producers, tankers and insurers. The sanctions targeted Surgutneftgas and Gazprom Neft, two Russian oil firms that handle 25% of Russian oil exports. The two companies shipped an average of 970,000 bbls a day in 2024. Bharat Petroleum and other Indian state refiners buy Russian oil in the spot market, mainly from traders. Freight rates to ship Russian Urals from Baltic ports to India jumped 20% in February to $7 million to $8 million per voyage after the Biden administration imposed harsher sanctions on Russian crude. Russia’s provisional February loading plan for western ports was revised up by 19% to 1.9 million barrels per day, Reuters calculations showed. Russian refineries are processing more crude oil in the hope of boosting fuel exports after the Biden administration imposed fresh sanctions on Russian crude. Last month, India pledged India to boost oil and gas imports from the U.S. in an effort to reduce the trade imbalance between the two countries. India made the promise after Prime Minister Narendra Modi visited the country and met U.S. President Donald Trump. Meanwhile, India’s oil demand growth is estimated to have exceeded China’s for the first time in 2024, and is expected to do so again in 2025. According to Kang Wu, global head of macro and oil demand research at SPGCI, India’s oil demand in the current year grew by 180,000 barrels per day, surpassing China’s growth at 148,000 bpd. India’s oil demand is expected to increase by 3.2% Y/Y in 2025 compared to a 1.7% clip by China.
India Set to Tap Vast Oil Reserves With Multi-Billion Dollar Investments
Amid concerns over U.S. President Donald Trump’s hard-hitting tariff policy, diversified Indian financial services company Motilal Oswal has suggested that India could strengthen its domestic industries and ramp up local production. Trump has a history of imposing heavy tariffs on India, including 25% on steel and 10% on aluminum imposed in 2018. The tariffs had an inimical effect on India’s trade with the U.S., with steel exports plunging 46% one year after the tariffs were announced. Meanwhile, India’s heavy reliance on oil imports leads to huge capital outflows and a weaker rupee. India imports 87% of its oil, mainly from Russia, Iraq, Saudi Arabia, the United Arab Emirates and the U.S. India spent $132.4 billion on crude oil imports in the 12 months up to mid-2024, a 16% Y/Y drop thanks to lower oil prices. Luckily, India is well endowed with substantial oil reserves. Last year, S&P Global Commodity Insights reported that four largely unexplored sedimentary basins in India could hold up to 22 billion barrels of oil. In effect, lesser-known Category-II and III basins namely Mahanadi, Andaman Sea, Bengal, and Kerala-Konkan contain more oil than the Permian Basin which has already produced 14 billion of its 34 billion barrels of recoverable oil reserves. Rahul Chauhan, an upstream analyst at Commodity Insights, has emphasized the potential of India’s unexplored Oil & Gas sector, “ONGC and Oil India hold acreages in the Andaman waters under the Open Acreage Licensing Program (OALP) and have planned a few significant projects. However, India still awaits the entry of an international oil company with deepwater and ultra-deepwater exploration expertise to participate in current and upcoming OALP bidding rounds and explore these frontier regions,” he has declared. Currently, only 10% of India’s 3.36 million sq km wide sedimentary basin is under exploration. However, Petroleum Minister Hardeep Singh Puri says that figure will jump to 16% in 2024 following the award of blocks under the Open Acreage Licensing Policy (OALP) rounds. So far, OALP has resulted in the award of 144 blocks covering about 244,007 sq km. Under OALP, India allows upstream exploration companies to carve out areas for oil and gas exploration and put in an expression of interest for any area throughout the year. The interests are accumulated thrice a year following which they are put on auction. According to Puri, India’s Exploration and Production (E&P) activities in the oil and gas sector offer investment opportunities worth $100 billion by 2030. ndia boasts significant discoveries in the Krishna-Godavari, Barmer, and Assam basins, but exploration in other areas has been slower to develop. Of India’s 3.14 million square kilometers of sedimentary basins, 1.3 million sq km are in deep waters. India had its first foray into deepwater exploration in the Bay of Bengal in 2024 in the Krishna-Godavari Basin, courtesy of India’s state run Oil and Natural Gas Corporation (ONGC). ONGC said it was planning to spend over $10 billion developing multiple deepwater projects in its KG-DWN-98/2 block in that basin. Meanwhile, state-owned upstream company Oil India Ltd is looking to start exploration activities in Nagaland “We have a total of 30 blocks under the OALP. We have already drilled all wells under the awarded OALP blocks, except in Nagaland. We are pursuing the ministry and they have set up a high power committee involving OIL, ONGC, government officials, to discuss the issue with the Government of Nagaland and resume exploration,” the official said. Unlike Pakistan, India is likely to have little trouble attracting the oil and gas majors. Indeed, British energy giant BP Plc (NYSE:BP) has been hunting for more opportunities in the country. BP has forged a joint venture with Indian multinational conglomerate Reliance Industries to operate 1,900 fuel retail stations across India and produces oil and gas from a deepwater block in the Krishna-Godavari basin. The JV has teamed up with ONGC to bid for exploration rights for an offshore block in India. Analysts have predicted that India is set to become the key driver of global oil demand growth, overtaking China. “China’s role as a global oil demand growth engine is fading fast,” Emma Richards, senior analyst at London-based Fitch Solutions Ltd, told The Times of India. According to the analyst, over the next decade, China’s share of emerging market oil demand growth will decline from nearly 50% to just 15% while India’s share will double to 24%. A rapidly growing population, which has likely surpassed China’s, is expected to be the main driver of consumption trends in India. Meanwhile, the country’s transition from traditional gasoline and diesel-fueled transport is expected to lag other regions, in sharp contrast to China’s skyrocketing adoption of electric vehicles and clean energy in general.
India’s spot oil needs wane as Russia flows are set to rebound
Indian refiners are likely to issue fewer tenders for spot crude in the coming months as volumes from top supplier Russia return to near normal levels, highlighting the trade’s success in working around US sanctions. The Asian nation’s state-owned processors are on track to secure more than three dozen cargoes that will load next month, according to people familiar with the matter. Combined with deliveries for private refiners Reliance Industries Ltd. and Nayara Energy Ltd., there may be more than 60 shipments of discounted Russian crude in April, or almost 52 million barrels, the people said, declining to be identified as the transactions aren’t public. Flows between the nations had slipped in recent months as a transition period for tighter US sanctions on shipments from Russia came to an end, forcing the state-owned refiners to issue a slew of spot tenders that saw them buy more expensive oil from alternative producers. Traders have now lined up enough “clean” Russian cargoes — meaning shipments untouched by any US-sanctioned entity — for April to help the companies meet most of their spot demand and ease concerns over future supplies, the people said. Most of the cargoes were booked at a discount of less than $3 a barrel to benchmarks, the people said. Discounts had collapsed to as little as $1 a barrel earlier this year, as sanctions pushed freight rates higher for Russia shipments. Russia’s monthly crude exports to India have fallen to 1.6 million barrels a day this year, down from an average of 1.8 million in 2024, according to data from Kpler. The move comes amid buyers’ broader optimism over supplies from Russia. European officials last week said the Trump administration has pared back its engagement with efforts to enforce sanctions as the US pushes for an end to the war in Ukraine.
Kochi launches trial run of biogas plant to convert 150 tonnes of food waste to gas
The city of Kochi has initiated a trial run for its newly constructed compressed biogas (CBG) plant in Brahmapuram, aimed at converting 150 tonnes of food waste into gas. The first phase of the plant, which includes one of the two bio-digesters, is now operational, with the second bio-digester expected to be completed soon. BPCL was given10 acres of land belonging to the Kochi Municipality free of cost for the construction of the plant. This land is adjacent to the land acquired by BPCL from Fertilisers and Chemicals Travancore (FACT). The necessary construction permits were swiftly secured through a single-window clearance process. The project, announced in November 2023, began construction in March 2024. Although the construction was planned to take 18 months, it was finished six months earlier than expected, with a total cost of approximately ₹800 million.
Himanta Biswa Sarma flags Rs 5 billion annual loss at BCPL, vows revival plan
Assam Chief Minister Himanta Biswa Sarma has raised concerns over the financial health of Brahmaputra Cracker and Polymer Limited (BCPL) in Lepetkata, Dibrugarh, revealing that the company has been incurring an annual loss of approximately Rs 5 billion for the past two years. During his visit to BCPL, CM Sarma highlighted the critical financial challenges faced by the organization, citing its heavy dependence on bank loans, which has put the project in a difficult position. “The road ahead for BCPL is challenging because this organization has been making a loss of around ₹5 billion annually for the last two years. They are heavily dependent on bank loans, which puts the project in a tough spot. If they continue borrowing from banks, they will face major problems in the days to come,” CM Sarma stated. Despite the financial distress, CM Sarma assured that efforts are underway to resolve the crisis. He emphasized the collective responsibility of stakeholders, including Oil India Limited (OIL), Numaligarh Refinery Limited (NRL), the Assam government, and the Gas Authority of India Limited (GAIL), which holds a 70% stake in BCPL. “Assam Government, OIL, and NRL hold a 30% stake in BCPL, while GAIL has the remaining 70%. Together, we are working on a solution to pull the company out of this financial crisis,” he added.