Reports

After seeing weakness overnight, the Mar’25 Brent futures contract has continued to decline on Thursday morning, falling from $82.25/bbl at 0700 GMT down to $81.68/bbl at 1050 GMT (time of writing). In the news today, South Korea’s industry minister Ahn Duk-geun said the country is looking to import more US oil and gas to diversify energy sources and ensure stable supplies given tensions in the Middle East. This came as Israel intensified strikes on Gaza overnight only hours after a ceasefire and hostage release deal was announced on 15 Jan, with Israel’s acceptance of the deal remaining unofficial until it is approved by the country’s security cabinet, as per Reuters. In other news, Russia claimed it damaged ground infrastructure of one of the largest natural gas storage sites in Ukraine’s Lviv region, while Ukraine said gas flows were uninterrupted, according to Bloomberg. Russia’s Defence Ministry stated on Telegram that the strikes early Wednesday were in response to Ukraine’s use of US and British missiles on Russian territories. Finally, spot premiums for Middle East crude rose to their highest in more than two years amid strong demand from China and India, seeking alternatives to sanctioned Russian crude. QatarEnergy has more than doubled its price for al-Shaheen crude oil loading in March to $3.81/bbl above Dubai quotes. At the time of writing, the Mar/Apr’25 and Mar/Sep’25 Brent futures spreads stand at $1.38/bbl and $5.61/bbl, respectively.

The Mar’25 Brent futures flat price had a volatile morning on Wednesday. It rose to highs of $80.46/bbl at 07:46 GMT before falling to lows of $79.63/bbl at 09:30 GMT and climbing again to $80.33/bbl by 10:18 GMT. Brent has been testing the $80/bbl level since Tuesday, and the intra-day low marks the lowest level reached this week. In the news, the U.S. sanctions on over 150 “shadow fleet” oil tankers have disrupted the seaborne oil trade, halting deliveries of 16 million barrels of crude and refined products from Russia, Iran, and Venezuela, while driving up tanker freight rates and creating uncertainty in global oil logistics. With China and India likely to pivot to alternative suppliers in response, the sanctions have tightened the tanker market, pushing VLCC rates up by 63% since early January. Trump’s proposed 25% tariffs on Canadian oil are pressuring Canadian crude prices and energy stocks, with analysts warning of further downside risks for producers reliant on US exports. Shell and CNOOC’s joint venture plans to invest $8.35 billion to expand its Guangdong petrochemical complex by 2028, adding a third ethylene cracker and facilities for specialty chemicals to serve China’s domestic market. California withdrew its EPA waiver request to mandate zero-emission trucks, anticipating rejection from the incoming Trump administration, a move that impacts other states adopting similar standards and reflects ongoing tensions over emissions regulations. Tengizchevroil has completed maintenance at Kazakhstan’s Tengiz field, with full production resuming by January 18. Finally, the front (Mar/Apr) and 6-month (Mar/Sep) Brent futures spreads are at $1.05/bbl and $4.46/bbl respectively.

The Mar’25 Brent futures contract strengthened from this morning’s low of $80.25/bbl around 0730 GMT up to almost $81.15/bbl at 0950 GMT, before falling back down to $80.30/bbl at 1050 GMT (time of writing). Crude oil prices remain elevated as US sanctions on Russia continued to stimulate bullish sentiment, with the sanctions expected to take 700-800kb/d of Russian crude off the market, according to Reuters. In the news today, Russia’s Foreign Minister Sergei Lavrov accused the US of seeking to disable the TurkStream gas pipeline, a key route for Russian gas supplies to Turkey and Europe. Lavrov stated “the US does not tolerate competition in any sphere, including energy” and “are encouraging their Ukrainian proxies to disable TurkStream following the sabotage of Nord Stream”. In other news, six European Union members—Denmark, Estonia, Finland, Latvia, Lithuania, and Sweden—have urged the European Commission to reduce the current $60 per barrel price cap on Russian oil, arguing it would reduce Moscow’s revenues without causing a market shock, as per Reuters. Finally, BP said that lower production and weak refinery margins would see its Q4’24 profit, to be released 11 Feb, fall around $300 million from the previous quarter. BP’s net income in Q3’24 was $2.27 billion, the weakest since the fourth quarter of 2020. At the time of writing, the Mar/Apr’25 and Mar/Sep’25 Brent futures spreads stand at $1.29/bbl and $5.24/bbl, respectively.