Brazil Joins OPEC+
Brazil has joined OPEC+ two years after the group extended an invitation, but its membership will not be binding with regard to production cuts, the country’s energy minister said. At the announcement of the Brazilian government’s decision to join the group, Mines and Energy Minister Alexandre Silveira described OPEC as “a forum for discussing strategies among oil-producing countries. We should not be ashamed of being oil producers. Brazil needs to grow, develop and create income and jobs,” the AP reported. Brazil is already one of the biggest oil producers in the world but it has ambitions to climb in the ranks to the number-four spot from number seven, with a production target of 5.4 million barrels daily for 2030. Brazil has also been a focal point for non-OPEC production forecasts, regularly named alongside the United States, Canada, and Guyana as a hotspot for non-cartel production growth. Now, this will change even though the new OPEC+ member is under no obligation to comply with the OPEC+ production cuts. OPEC’s production, meanwhile, has been declining. The group booked dips for both December and January, with the January rate down by 50,000 bpd from December’s daily average of 26.53 million barrels, according to a Reuters survey. Supply from Iran and Nigeria dropped by 60,000 bpd each, the most among OPEC producers, according to the survey. The oil producer group was scheduled to start relaxing these production cuts starting in April but there have been reports that the rollback of the output caps could be delayed once again, in line with OPEC’s prioritization of actual market conditions rather than an agenda set in stone. With oil prices wobbly amid U.S.-Russia negotiations that could lead to the lifting of U.S. sanctions, OPEC will likely not be in any rush to stick to its plans for boosting production, seeing as these plans are very flexible to serve the purposes of the group.
Europe’s LNG Tango: A Love-Hate Relationship with Reality
The European Union, ever the conflicted protagonist in its own energy saga, is gearing up to throw its weight around in the global LNG market—again. A leaked draft from the European Commission suggests Brussels will “immediately engage” with LNG suppliers to stabilize energy prices, all while still pretending it’s on track to kiss fossil fuels goodbye by 2050. The cognitive dissonance is almost admirable. At issue is Europe’s chronic dependence on imported gas. Having sworn off Russian pipeline supplies (at least officially), the bloc now finds itself tethered to liquefied natural gas imports—primarily from the U.S., which it may soon be paying even more for if Donald Trump follows through on tariff threats. Meanwhile, Russia remains Europe’s second-largest LNG supplier, because, well, energy security is a funny thing when reality checks your moral grandstanding. Now, Brussels wants to emulate Japan’s strategy of investing in overseas LNG infrastructure to lock in long-term contracts, Reuters reported on Tuesday. Sensible, perhaps. But in true EU fashion, there’s a regulatory catch: European gas contracts must vanish by 2049 to meet the net-zero commitment. This means suppliers will be asked to commit to deals that evaporate just when they start getting lucrative. A tough sell. Meanwhile, natural gas prices have jumped to nearly $4/MMBtu, and power prices across Europe remain tethered to gas market volatility. The EU’s latest plan also includes joint LNG purchasing, an attempt at leveraging collective buying power to force lower prices. But as past attempts have shown, pooling desperation doesn’t necessarily translate to bargaining strength. The takeaway? Europe still needs LNG—more than it cares to admit. And the longer it dithers between energy realism and green ambition, the more it will pay.
G7 Weighing Tightening Russian Oil Price Cap
The Group of Seven is considering collectively tightening an oil price cap on Russian petroleum in an effort to cut Moscow’s oil revenues as the war in Ukraine rages on, Bloomberg has revealed. A draft statement seen by Bloomberg shows that these nations could task their finance ministers to collectively redraw the price limit–currently set at $60 a barrel for Russian crude. Last December, the Biden administration tightened sanctions on Russian oil. Middlemen who supply Russian oil have stopped offering cargoes after the latest U.S. sanctions imposed by the Biden administration targeting Russian producers, tankers and insurers, Bharat Petroleum CFO has revealed. The sanctions have 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. “We have not received any new offers for the March window (delivery). Traders are asking us to wait. We are waiting to get offers,” Vetsa Ramakrishna Gupta told Reuters on Wednesday. “We are not expecting the similar number of cargoes that we used to get in the months of December and January,” he added. Earlier, India announced that it will abide by the sanctions and turn away sanctioned tankers. Previously, we reported that the sanctions would severely disrupt Russian oil exports to India and China–the biggest buyers of Russian crude–and could also give Trump more leverage in future negotiations as he tries to end the war in Ukraine. Last year, India briefly overtook China as the largest buyer of Russian crude. However, India’s import of Russian oil in November plummeted 55% Y/Y to its lowest point since June 2022. This could be the result of the country trying to diversify its oil supplies to avoid overlying on a single country.
China LNG Tariffs Put Future Contracts in Jeopardy
Ten days ago, China announced retaliatory tariffs on American energy imports and also announced an antitrust investigation into Google, just minutes after a sweeping levy on Chinese products imposed by U.S. President Donald Trump took effect. Beijing said it would implement a 15% tariff on coal and liquefied natural gas (LNG) products as well as a 10% tariff on crude oil, agricultural machinery and large-engine cars. Well, the tariffs came into force on 10 February, marking the beginning of another trade war between the world’s biggest economies under Trump. Commodity analysts at Standard Chartered have delved into the potential effects of the tariffs on the U.S. energy sector. StanChart has pointed out that China first levied a tariff of 10% on US. LNG imports in September 2018 and then increased to 25% in June 2019. StanChart notes that whereas some imports continued at the 10% rate, there were none at the higher rate. Beijing then granted tariff waivers for LNG in February 2020 as part of a trade war de-escalation and after 11 months of zero flows, with the first US cargo arriving in April 2020. According to the analysts, in the following 59 months, there have been cargoes in all but three months. Further, the relationship between U.S. producers and Chinese LNG buyers has deepened with some long-term contracts signed. In contrast, no long-term LNG contracts between the two countries were signed prior to 2021. However, the potential negative effects of the latest tariffs on LNG are likely to be limited. The U.S. currently provides less than 6% of China LNG imports, while China accounts for just 6% of U.S. exports. With Europe’s demand for U.S. LNG likely to remain robust, StanChart has predicted that displaced flows are unlikely to become distressed. StanChart sees the tariffs cutting the flow of spot cargoes to China dramatically, with some flows under longer-term contracts likely to continue, depending on the nature of re-export clauses. The experts have warned that the biggest threat of these tariffs is the economics of future long-term contracts, including contracts amounting to at least 15 million tonnes per annum (mtpa) that have already been signed. U.S. Gas Prices Surge On Strong LNG Demand U.S. natural gas futures climbed to $3.7/MMBtu, the highest in three weeks, driven by lower output, rising LNG exports and colder weather forecasts. Gas flows to the eight major U.S. LNG export plants averaged 15.3 bcfd so far in February, up from 14.6 bcfd in January, close to record levels. Daily LNG feedgas hit 15.9 bcfd on Thursday, surpassing the previous high of 15.8 bcfd on January 18. Meanwhile, extreme cold froze some wells, causing daily gas output to drop by 3.7 bcfd over the past week to a two-week low of 103.0 bcfd. Weather forecasts indicate colder-than-normal temperatures through February 22, boosting heating demand. Additionally, the EIA reported that U.S. utilities withdrew 100 bcf of natural gas from storage in the week ending February 7, bringing total inventories down to 2,297 bcf, more than the expected 92 bcf draw. Meanwhile, European natural gas futures pulled back below €51 per megawatt-hour on Thursday from a two-year high of 58.039 per megawatt-hour (MWh) they hit on 10 February driven by milder weather forecasts that are expected to reduce heating demand.EU inventories stood at 56.95 billion cubic metres (bcm) on 9 February according to Gas Infrastructure Europe (GIE) data, 21.45 bcm lower y/y and 8.09 bcm below the five-year average. The w/w draw to 9 February was 4.9 bcm, 37% higher than the five-year average (3.58 bcm) and almost twice the draw for the same period last year (2.5 bcm). Cessation of Russian gas transit through Ukraine accounted for the bulk of the m/m reduction (1.47 bcm), although a 0.824 bcm m/m fall in flows from Norway also played a significant role. Excluding transit flows, EU imports of Russian pipeline gas totaled just 1.362 bcm in January 2025, 90% lower than in January 2021. Commodity analysts at Standard Chartered have projected that If temperatures for the rest of the northern hemisphere winter were to normalize, inventories would finish March at close to 44 bcm, while a continuation of the recent larger-than-usual draws would result in an end-season inventory level of 39.1 bcm. The latter forecast for the end-season minimum would be 29 bcm less than last year’s number, but ~10 bcm higher than in 2022 in the immediate wake of Russia’s invasion of eastern Ukraine.
Experts question viability of more oil, gas imports from United States
With the US pushing for significantly increasing its oil and gas supplies to India, experts have questioned the cost viability of the proposal. They said the US, currently India’s fifth-largest crude oil supplier, may become a costly import option for Indian refiners due to higher landing costs as against traditional suppliers in Central Asia or Russia, which offer significant discounts. However, they still see possibilities of increasing in imports from the North American country. Gaurav Moda, partner and Leader of the Energy Sector, EY-Pantheon, says that increasing crude imports from the USA is possible, as it was done earlier with aligned interests. According to him, LNG can be sourced more quickly, but sourcing WTI crude requires more effort. “For crude, supply timeline and cost considerations like 6-7 days from Middle-East against 40-45 days from Texas. Alignment of US crude specs with Indian refineries may have to be evaluated. Irrespective, quick volumes growth is possible with aligned interests as we have seen in recent past with respect to supplies from other countries. Increasing gas volumes could be quicker, as Henry Hub prices are discounted against other sources, while discounting WTI crude on realtime basis could require effort,” said Moda. Prashant Vasisht, senior VP and co-Group Head of ICRA, is of the view that Indian refineries will procure oil from the US only if it is cheaper. However, he says it is not improbable given India has procured oil from Brazil and other countries. A joint statement by Prime Minister Narendra Modi and US President Donald Trump emphasized to make the US a leading supplier of crude oil, petroleum products, and liquefied natural gas (LNG) to India. India imports 85% of its crude from all the top producers in the world. The US has always been among the top five suppliers of crude to India, and India buys petroleum worth $20 billion from the US. Following the war between Russia and Ukraine, India raised its crude purchases from Russia, resulting in a decrease in imports from the US. As per data, India’s crude oil imports from the US have seen a major decline year-on-year, both in volume and percentage share. For instance, in 2021, the average monthly import was roughly 450,000 barrels a day, representing 10% of India’s total crude imports.
SAM, A&O Shearman act on IndianOil – ADNOC 1.2 MMTPA LNG deal
Shardul Amarchand Mangaldas & Co (SAM) and A&O Shearman acted on IndianOil Corporation Limited entering into a long-term sale and purchase arrangement for LNG with Abu Dhabi Gas Liquefaction Company Limited. (ADNOC) ADNOC will be supplying 1.2 MMTPA of LNG to IndianOil for a period of 14 years. The deal is valued in the range of $7 billion to $9 billion and was signed on February 12, 2025. SAM advised Indian Oil on the deal. The transaction team consisted of V.R. Neelakantan (Partner), Prashant Sirohi (Partner) and Siddharth Jain (Associate). This deal marks the first long-term LNG import contract between an Indian company and ADNOC. Deliveries are scheduled to commence in 2026, with LNG sourced from ADNOC’s facilities on Das Island, which has a production capacity of up to 6 mmtpa. This agreement is crucial for India as it seeks to raise the share of natural gas in its energy mix to 15% by 2030, compared to the current 6.2%. Additionally, the deal benefits from the UAE-India Comprehensive Economic Partnership Agreement (CEPA), which waives the 2.5% import duty on LNG, making the imports more cost-effective. ADNOC Gas is a key player in the global LNG market, known for its extensive natural gas infrastructure and its plans to expand through the upcoming Ruwais LNG project, which is expected to commence operations by the end of 2028. IndianOil, on the other hand, plays a pivotal role in India’s energy sector, with a strong presence in refining, pipeline transportation, and marketing of petroleum products.
Rs 250 billion relief for Indian Oil, BPCL, HPCL? Oil ministry approaches Finance Ministry
Oil marketing companies could soon get a big monetary relief of up to Rs 250 billion soon. The oil ministry is expecting financial support for OMCs like Indian Oil , Bharat Petroleum Corporation, Hindustan Petroleum Corporation in the second supplementary demand for grants for the financial year 2025. ET NOW has learnt from sources that the oil ministry has reached out to the finance ministry to compensate oil marketing companies once again with additional input. The ministry has sought financial assistance for OMCs to cover the losses incurred on LPG sales. Financial Relief for OMCs ET NOW had on Dec 16, 2024, reported about the oil ministry’s proposal to compensate the oil marketing firms. Now, sources have told ET NOW that the government is likely to provide assistance of Rs 200 to Rs 250 billion to cover companies’ losses. It is worth mentioning here that OMCs are incurring a loss of around Rs 150 on the sale of each domestic LPG cylinder. Moreover, the companies have been facing losses on domestic LPG for the past several months. Notably, IOC has an under-recovery of around Rs 90 billion on LPG sales.
India can lessen reliance on Russian oil if US emerges as key supplier
US President Donald Trump’s recent proposal to sell more oil and gas to India could significantly reduce New Delhi’s purchases of discounted Russian oil, thought to be funding Moscow’s war with Ukraine. Analysts expect Delhi to welcome the move by Washington, which could induce Russia to sell its oil at market rates. India and China are among the top buyers of cheap Russian oil.“Russian oil will remain important [for India] but the wartime surge will decline soon enough. The US will fill that gap,” said Uday Chandra, a political scientist at Georgetown University. Trump has suggested he would meet Russian President Vladimir Putin this week, raising hopes that negotiations could end three years of fighting in Ukraine. India, which imports 85 per cent of its oil needs, has increasingly relied on supplies of discounted Russian oil in recent years. From less than 1 per cent before the Ukraine war, Russia later accounted for 40 per cent of India’s oil imports. But its share is estimated to have dropped to 25-30 per cent since the US imposed fresh sanctions on entities transporting Russian oil late last year. Russia’s share of Indian oil imports could drop to 15-20 per cent in the near term, given Trump’s plan to sell more US oil to India to reduce a trade deficit between the two countries, Chandra said. Trade between India and the US totalled US$118 billion in the 2024 financial year, with the South Asian country recording a surplus of US$32 billion.
BPCL expects to get gas from Mozambique LNG project by 2029, says CMD
Bharat Petroleum Corporation Ltd (BPCL) expects receiving gas from the Mozambique project by early to mid-2029 if the liquefied natural gas (LNG) project resumes operations this calendar year, chairman and managing director G Krishnakumar has told Moneycontrol. “There was a force majeure in Mozambique. We are hopeful that it will resume but the operator is also waiting Exim Bank loan to be sanctioned. So, once that is done, we are hopeful that this year (2025)— by the middle or end of this year—it will resume and gas will start coming by early or middle of 2029,” he said Earlier this month, the CEO of TotalEnergies, the lead operator of the $20-billion project, said financing from the US Export-Import Bank (EXIM) Bank is expected to be approved soon, following which the force majeure on the LNG project would be lifted. TotalEnergies halted the LNG project in 2021 following attacks by Islamic State terrorists.
ONGC is accelerating expansion with billion-dollar deals to secure India’s energy future
Oil & Natural Gas Corporation Ltd (ONGC), which contributes around 70% of India’s crude oil and approximately 84% of its natural gas production, is on an aggressive expansion drive to reinvent itself and remain a key contributor to India’s energy security. Last week, ONGC entered into a series of major deals in this direction. On February 12, NGC NTPC Green Private Limited (ONGPL), a 50:50 joint venture between ONGC Green Limited (OGL) and NTPC Green Energy Limited (NGEL), acquired Ayana Renewable Power for ₹195 billion (USD 2.3 billion) in one of the largest recent deals in India’s energy sector. On the same day, ONGC Videsh Ltd., a wholly owned subsidiary of ONGC, teamed up with energy major Petróleo Brasileiro S.A. (Petrobras) to assess opportunities in upstream, marketing, decarbonisation, and low-carbon solutions, among other areas. A day later, ONGC and bp, one of the largest international energy companies, signed a contract under which bp will serve as the Technical Services Provider (TSP) for the Mumbai High field, India’s largest and most prolific offshore oil field. Additionally, ONGC partnered with Tata Power Renewable Energy Limited (TPREL), a subsidiary of The Tata Power Company Limited, to explore collaborative opportunities in the Battery Energy Storage System (BESS) value chain. On February 15, the State Oil Company of the Azerbaijan Republic (SOCAR), ONGC, and its subsidiary Mangalore Refinery and Petrochemicals Limited (MRPL) signed a non-binding Memorandum of Understanding (MoU) to explore strategic opportunities in the energy sector. The MoU outlines collaboration in the supply of crude oil and liquefied natural gas (LNG), the sale and supply of petroleum products, exploration of trading opportunities, and capacity building through knowledge exchange. GREEN ENERGY PUSH ONGC, predominantly a fossil fuel operator, is now aiming for a greener future. As of FY24, it had only 193 MW (megawatts) of green energy—153 MW from wind and 40 MW from solar. With an investment of ₹1000 billion, ONGC plans to reach 10 GW, with 60-70% from solar and 30-40% from wind. Other green initiatives include 25 biogas plants, 2 GW of pumped hydro, 1 MMTPA (million metric tonnes per annum) of green ammonia, and 180 kilotonnes of green hydrogen. In FY25, the plan was to add only 1 GW of assets with an investment of ₹10 billion, but the task was expedited with the Ayana acquisition. ONGC aims to achieve net zero by 2038. Acquired from the National Investment and Infrastructure Fund (NIIF), British International Investment Plc (BII) and its subsidiaries, and Eversource Capital, Ayana has approximately 4.1 GW of operational and under-construction assets. This acquisition marks ONGPL’s first strategic investment since its inception in November 2024. “The acquisition of Ayana Renewables is a strategic decision by ONGC Green Ltd and NTPC Green Energy Ltd to accelerate the momentum toward a clean energy revolution. It marks a historic milestone in our journey toward a sustainable energy future,” said Sanjay Mazumdar, CEO of ONGC Green Limited. ONGC, which discovered 8 out of India’s 9 producing basins—including the latest Vindhya basin—has struggled to improve production in recent years despite increased exploration and production (E&P) spending. Its crude oil production remained stagnant in FY23 and FY24, at 18.449 MMT and 18.14 MMT, respectively. The standalone crude oil production (excluding condensate) during Q3 FY25 was 4.653 MMT, registering a growth of 2.2% over the corresponding quarter of FY24. Similarly, standalone crude oil production during the first nine months of FY25 was 13.858 MMT, reflecting a 1.2% increase over the same period in FY24. Gas production also remained stagnant at 19.969 billion cubic meters (BCM) and 19.316 BCM, respectively. Standalone natural gas production during Q3 FY25 was 4.978 BCM, registering a growth of 0.3% over Q3 FY24. While ONGC faces production challenges, India’s crude oil demand continues to rise. In FY24, India imported 232.5 MMT of crude oil, nearly the same as the 232.7 MMT imported the previous year. As the world’s third-largest consumer of crude oil, India has an import dependency of over 85%. According to research agency IBEF, crude oil consumption is expected to grow at a CAGR of 4.59% to 500 MMT by FY40. Similarly, India’s natural gas consumption is projected to increase by nearly 60% to 103 BCM annually, requiring gas imports to double by 2030, according to the International Energy Agency (IEA).