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MABUX ARA LNG Bunker Index
Port LNG$/mton MGO LS$/mton Date
ARA
614.29
-51.05
751.00
+5.00
Apr 24
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Port	LNG$/mton	MGO LS$/mton	Date
ARA	614.29	-51.05	751.00	+5.00	Apr 24

MABUX Global Bunker Index

380HSFO$/mton		VLS FO$/mton		MGO LS$/mton		Date
555.15	+1.56	687.60	+2.23	876.93	+3.08	Apr 29

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MBP INDEX vs DBP INDEX (ICE/NYMEX)

All Indexes in $/mton	380HSFO			VLS FO			MGO LS			Date
All Indexes in $/mton	MBP Index	DBP Index	Diff	MBP Index	DBP Index	Diff	MBP Index	DBP Index	Diff	Date
Rotterdam	496	563	-67	604	667	-63	751	857	-106	Apr 29
Singapore	529	578	-49	649	676	-27	777	866	-89	Apr 29
Fujairah	514	588	-74	649	672	-23	895	914	-19	Apr 29
Houston	498	544	-46	623	680	-57	793	778	+15	Apr 29

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Latest News
- 2024-04-29
  'End of oil not in sight', OPEC Secretary General says in MEES article
  The end of oil is not in sight, OPEC's top official said, as the pace of energy demand growth means that alternatives cannot replace it at the needed scale, and the focus should be on cutting emissions not oil use. In an op-ed article in the Middle East... Read more The end of oil is not in sight, OPEC's top official said, as the pace of energy demand growth means that alternatives cannot replace it at the needed scale, and the focus should be on cutting emissions not oil use.
  In an op-ed article in the Middle East Economic Survey (MEES) published on Friday, OPEC Secretary General Haitham Al Ghais wrote there is "a worrying trend of narratives" that use terms like the end of oil, which have the potential to foster energy policies that stoke energy chaos.
  "What if investments in supply fall as a result, but demand for oil keeps increasing, as we are seeing today?," Al Ghais wrote in the MEES article which OPEC shared on X.
  "The reality is that the end of oil is not in sight," he wrote.
  The Organization of the Petroleum Exporting Countries believes oil use will keep rising in coming decades, in contrast to bodies such as the International Energy Agency, which predicts it will peak by 2030.
  The oil industry is investing in technologies like carbon capture utilization and storage, clean hydrogen and direct air capture, and so "showing that it is possible to reduce emissions while producing the oil the world needs," Al Ghais wrote.
  Al Ghais wrote that the world has invested over $9.5 trillion in transition costs over the past two decades, yet wind and solar still only supply just under 4% of the world's energy, while electric vehicles have a total global penetration rate of between 2% and 3%.
  "The reality is that many alternatives cannot replace oil at the necessary scale, or are unaffordable in many regions." Source: Reuters/Investing.com
- 2024-04-29
  Oil prices fall 1% on Israel-Hamas ceasefire talks, U.S. inflation concerns
  Oil prices fell in early Asian trading on Monday, erasing gains from Friday as Israel-Hamas peace talks in Cairo eased fears of a wider conflict in the Middle East and U.S. inflation data further dimmed the prospects of interest rate cuts anytime soon. Brent... Read more Oil prices fell in early Asian trading on Monday, erasing gains from Friday as Israel-Hamas peace talks in Cairo eased fears of a wider conflict in the Middle East and U.S. inflation data further dimmed the prospects of interest rate cuts anytime soon.
  Brent crude futures fell by as much as $1, or 1.1% to $88.50 a barrel before ticking back up to $88.55 at 0149 GMT. West Texas Intermediate (WTI) futures were down 84 cents, or 1%, at $83.01 a barrel.
  Stepped-up efforts to mediate a ceasefire between Israel and Hamas moderated geopolitical tensions and contributed to the weak opening on Monday, IG market analyst Tony Sycamore said. A Hamas delegation will visit Cairo on Monday for peace talks, a Hamas official told Reuters.
  Israel's foreign minister said on Saturday a planned incursion into Rafah, where more than one million displaced Palestinians are sheltering, could be put off in the event of a deal that involves the release of Israeli hostages.
  A White House spokesperson said Israel had agreed to listen to U.S. concerns about the humanitarian effects of the potential invasion.
  Markets are also on watch for the U.S. Federal Reserve's May 1 policy review.
  "Also playing a part are some nerves ahead of this week’s Federal Open Market Committee meeting which is expected to come with a more hawkish tone," Sycamore said.
  U.S. inflation rose 2.7% in the 12 months through March, data on Friday showed, above the Fed's target of 2%. Lower inflation would have increased the likelihood of interest rate cuts, which would stimulate economic growth and oil demand.
  
  3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .
  "The sticky U.S. inflation sparks concerns for 'higher-for-longer' interest rates", leading to a stronger U.S. dollar and putting pressure on commodity prices, independent market analyst Tina Teng said.
  The dollar strengthened on the prospect of higher-for-longer interest rates. A stronger dollar makes oil more expensive for those holding other currencies.
  Further weighing on the outlook for oil demand, China's industrial profit growth slowed down in March, official data showed on Saturday, in the latest sign of frail domestic demand in the world's second largest economy.
  Cumulative profits of China's industrial firms rose 4.3% to 1.5 trillion yuan ($207.0 billion) in the first quarter from a year earlier, compared to a 10.2% rise in the first two months.
  But oil prices could swing higher again if U.S. inventory data and China's PMI index show improvements this week, Teng said.
  Brent had settled up 49 cents and WTI up 28 cents on Friday on concerns about disruptions to supply from events in the Middle East.
  The market brushed aside potential supply disruptions stemming from Ukranian drone strikes on the Ilsky and Slavyansk oil refineries in Russia's Krasnodar region over the weekend. The Slavyansk refinery had to suspend some operations after the attack, a plant executive said. Source: Reuters/Investing.com
- 2024-04-29
  MABUX: Global bunker indices to continue upward trend on April 29.
  MABUX World Bunker Index (as index calculated based on current prices for 380 HSFO, VLSFO and MGO) headed upwards on Apr. 26: 380 HSFO - USD/MT - 553.59 (+4.67) VLSFO - USD/MT – 685.37 (+1.81) MGO - USD/MT – 873.85 (+1.23) As of Apr. 26, the MABUX... Read more MABUX World Bunker Index (as index calculated based on current prices for 380 HSFO, VLSFO and MGO) headed upwards on Apr. 26:
  
  380 HSFO - USD/MT - 553.59 (+4.67)
  VLSFO - USD/MT – 685.37 (+1.81)
  MGO - USD/MT – 873.85 (+1.23)
  
  As of Apr. 26, the MABUX MBP/DBP Index (MDI), which monitors the correlation between market bunker prices (MBP) and the MABUX digital bunker price benchmark (DBP), revealed the following price trends across major ports: Rotterdam, Singapore, Fujairah, and Houston.
  
  - HSFO segment: All four selected ports were undercharged, with underprice premiums narrowing further by $3 in Rotterdam, $3 in Singapore, and $2 in Houston, while widening by $5 in Fujairah.
  
  - VLSFO segment: Underpricing persisted across all four ports, with undercharge margins increasing in Rotterdam by $3, Singapore by $2, Fujairah by $7, and Houston by $3.
  
  - MGO LS segment: Houston remained the sole overpriced port, with the ratio rising further by $4. The other three ports were undercharged, with margins declining in Rotterdam by $9, Singapore by $20, and Fujairah by $11. The MDI index in Rotterdam fell below the $100 mark.
  
  We anticipate a further increase in the Global bunker indices on Apr. 29: 380 HSFO – plus 1-3 USD/MT, VLSFO – plus 1-3 USD/MT, MGO LS – plus-minus 1-8 USD/MT.
  
  Source: MABUX
- 2024-04-29
  Sinopec Challenges India's Energy Influence with New Sri Lanka Refinery
  The world’s biggest refiner, China Petroleum & Chemical Corporation, or Sinopec, is accelerating plans to build its first fully-owned refinery outside China. Sinopec is set to complete a feasibility study in June to build one or two refineries in... Read more The world’s biggest refiner, China Petroleum & Chemical Corporation, or Sinopec, is accelerating plans to build its first fully-owned refinery outside China.
  
  Sinopec is set to complete a feasibility study in June to build one or two refineries in Sri Lanka as China looks to capitalize on its foreign investments. China Merchants Port Holdings has developed and operates the Hambantota port in Sri Lanka, an island very close to India.
  
  Both China and India are vying to boost their energy presence in Sri Lanka to deliver fuel to the country, which has only one refinery built in the 1960s by Iran, capable of processing about 38,000 barrels per day (bpd).
  
  Sinopec is now close to completing its feasibility study on whether to build a 160,000-bpd refinery or two 100,000-bpd facilities at the China-run Hambantota port, senior industry sources told Reuters this week.
  
  The project in Sri Lanka is considered a top priority at Sinopec, according to the sources.
  
  At the end of 2023, Sri Lanka’s government approved a contract to Sinopec to enter into an agreement to establish a new Petroleum Refinery and Associated Product Processing center in Hambantota, Sri Lanka’s Minister of Power and Energy, Kanchana Wijesekera, said at the time.
  
  Last month, Sinopec officials discussed the proposed new refinery and indicated that the Chinese giant had decided to double the capacity of the refinery from the original proposal and the investment. The Chinese firm intends to sign the agreements for the project and commence work by June 2024, the Sri Lankan energy minister said. Sinopec has discussed issues regarding water supply, power supply, and land allocation for the new refinery with the relevant authorities.
  Related: Oil Prices Are Set for a Weekly Gain as Yellen Sees Inflation Falling
  
  The refinery project in Sri Lanka is a move by the top Chinese and global refiner to secure more markets overseas.
  
  Another major priority for Sinopec is a planned expansion of the Yanbu refinery with a petrochemicals complex in Saudi Arabia, where joint venture partners Sinopec, Saudi Aramco, and SABIC are exploring the idea of adding a new petrochemical complex to be integrated with the existing refinery.
  
  If Sinopec’s project in Sri Lanka goes through, it would be the first fully-owned refinery of the refining giant abroad.
  
  Sinopec already signed last year an agreement with the Board of Investment of Sri Lanka (BOI) to operate and set up fuel stations for distribution in Sri Lanka. The Chinese giant has invested $100 million in the project, which includes the import, storage, and sales of fuel.
  
  Sinopec and China will have to compete with India, which has also set sights on boosting its energy relations and infrastructure links with Sri Lanka.
  
  In February 2024, Sri Lanka’s Energy Minister Wijesekera discussed with executives of state-owned Indian Oil Corp (IOC) a proposal by the Indian Government through IOC for a multi-product oil pipeline connecting Nagapattinam in India with the Trincomalee Tank Farm on Sri Lanka’s east coast and Colombo.
  
  Technical studies, demand market analyses, financial analyses, and business models will be carried out to decide on the mechanism of a potential product pipeline, the minister noted.
  
  India and Sri Lanka have made significant progress on the discussions and are looking to make an official arrangement or agreement on a potential pipeline “as soon as possible,” an anonymous Indian official directly aware of the talks told Reuters.
  
  India is also involved in the construction of renewable energy plants, including a planned solar park, Sampur Ground Mount Solar Project, developed by a joint venture between NTPC of India and Sri Lanka. The project has progressed to the request for proposal (RFP) stage, and negotiations will begin for the power purchase agreement for the first phase of 50 MW of the 120 MW solar park once the RFP is evaluated.
  
  Source: Oilprice.com
- 2024-04-29
  Why Chinese Exports to Russia Are Declining
  The US threat of secondary sanctions against enablers of Russian sanctions-busting, especially China, is showing signs of crimping the Russian economy. US Secretary of State Antony Blinken began a three-day visit to China on April 24 with a stern... Read more The US threat of secondary sanctions against enablers of Russian sanctions-busting, especially China, is showing signs of crimping the Russian economy.
  
  US Secretary of State Antony Blinken began a three-day visit to China on April 24 with a stern warning for Beijing: the United States is ready to play hardball to prevent the continuing supply of equipment to Russia that aids the Kremlin’s war effort.
  
  China has denied accusations that it is supplying arms to Russia. Nevertheless, Beijing appears to be taking preventative steps to assuage US concerns. The Russian media outlet Izvestia reported earlier that some major Chinese banks have imposed restrictions on Russian wire payments.
  
  “The situation with payments from Russia to China deteriorated sharply at the end of March. About 80 percent of transactions were returned,” Izvestia reported, citing a “business community” source.
  
  “Today sending yuan to China is a big problem. Because of this, importing equipment in April was very difficult, and this will continue in May,” the outlet cited the source as saying.
  
  Chinese exports to Russia in March of this year were down 15.7 percent compared to the same month in 2023, Bloomberg reported. Russian imports from all sources fell by 18 percent this March.
  
  Other nations are taking note of the secondary sanctions threat, Russian bankers say, adding it is becoming much harder for Russians to move money around. “The situation is developing dynamically and, unfortunately, is not very encouraging,” the Russian media outlet RBC quoted Andrei Kostin, the head of VTB bank, who himself is the subject of US sanctions, as saying. “The number of foreign banks that are ready to continue working with us is constantly decreasing.”
  
  At least one Chinese expert is voicing doubt about the Kremlin’s ability to maintain its war effort and achieve its goals in Ukraine. The Moscow Times published on April 15 a summary of an interview with Feng Yujun, the director of the Center for Russian and Central Asian Studies at Fudan University in Shanghai, who said multiple factors were working against Russia’s war effort. Among the factors listed by Feng were: the cohesiveness of Ukrainian society in maintaining its war effort; ongoing Western support for Ukraine; Russia’s difficulties with command and control of military operations; flaws in Russian intelligence gathering; and an information bubble in the Kremlin that hinders sound decision-making.
  
  The Moscow Times goes on to cite Feng as saying that Russia at present is “fertile ground for ‘all kinds of black swans,’ that is, various unpredictable events that the Russian government has already faced and will continue to face.”
  
  Source: Oilprice.com
- 2024-04-29
  The Renewable Revolution Hinges on Recycled Metals
  The renewable revolution will rely on a whole lot of non-renewable resources to get the job done. Building out the massive amount of clean energy infrastructure needed for a global decarbonization transition is going to require huge quantities of resources.... Read more The renewable revolution will rely on a whole lot of non-renewable resources to get the job done. Building out the massive amount of clean energy infrastructure needed for a global decarbonization transition is going to require huge quantities of resources. In particular, the clean energy transition is going to call for a whole lot of specialty metals and minerals used for different green technologies such as solar panels, batteries, wind turbines, and electrical wiring. Indeed, metals currently represent one of the hottest commodities markets for energy traders. As demand skyrockets, sourcing such metals in an environmentally friendly way is key, lest we destroy the planet in the name of saving it.
  
  The problem is that mining for metals is associated with a litany of environmental ills. Recent reports on lithium, for example, one of the most essential rare Earth minerals used in ‘clean’ technologies, have shown that there is a very dark side to the ever-increasing production boom. Extracting a single ton of lithium requires approximately 500,000 liters of water, which poses a major existential threat to the desert environments and communities where it is being extracted. As such, the discovery of lithium in developing countries is seen by locals as a blessing and a curse. Already, there are legitimate fears that lithium production will suck South America’s ‘Lithium Triangle’ region dry and make agricultural livelihoods untenable and that elite capture of lithium wealth in Kashmir will cause social unrest on top of environmental ills.
  
  Lithium is just one of a laundry list of metals that will be essential to reaching global climate goals by mid-century and avoiding catastrophic climate change in the longer term. Luckily, there’s another major source of key energy transition metals that doesn’t require any mining at all – your local landfill. Despite the huge and growing demand for metals, we are throwing away billions of kilograms of them every year in the form of electronic waste (familiarly known as e-waste).
  
  Globally, we threw out a staggering 62 million metric tons of electronics in 2022. Within that total there was an estimated 1.1 billion kilograms of copper, 1.9 billion kilograms of nickel, and 1.1 billion kilograms of aluminum – all of which are essential metals for the clean energy transition. That’s according to the United Nations recently released Global E-Waste Monitor, which tracked the waste of valuable metals for the first time ever this year.
  
  The scale of this waste, and its mismatch with current demand trends for the same materials, is staggering. In 2022, demand for copper from climate tech alone reached 6 million metric tons, according to figures from the International Energy Agency (IEA). In the same year, 40% of the 2 million metric tons of copper present in e-waste went straight to landfills around the world instead of being recycled for reuse. The same goes for aluminum. And those metals are recycled far more frequently than other critical energy transition metals.
  
  Not only is this practice staggeringly wasteful, it’s also counterproductive to the entire clean energy movement. Mining new metals is a dirty business that is often associated with significant greenhouse gas emissions. On average, mining new aluminum creates more than 10 times more carbon emissions than aluminum recycling. This is a hugely significant difference, especially when considering that aluminum production is projected to balloon by 80% in a scenario where the world stays on track with its renewable energy goals.
  
  So why aren’t we recycling far more metals and diverting them directly to the vast and growing clean energy technology demand? Some metals are extremely difficult to extract and recycle from e-waste, like nickel that has been locked inside of stainless steel and other alloys. Others are simply not sufficiently incentivized for the effort to be worth the time and money it takes to find and extract them. Supportive policy measures that require recycling as well as production design that facilitates future recycling are therefore key to closing this waste loop.
  
  Closing such loops is a critical step for making the global clean energy transition feasible, and for reducing its negative environmental externalities. E-waste is not the only problem in this vein. The clean energy sector itself is also a major generator of waste which could be better managed and recycled. While time is of the essence for achieving a timely clean energy transition, taking the opportunity to pause and reflect on better production cycles is critical to avoid needless waste and bitterly ironic poor resource management in the effort to save the planet. Source: Oilprice.com
- 2024-04-29
  How Central Asian Countries Are Courting Western Trade and Investment
  Central Asian states are knocking down trade barriers, addressing a prerequisite for the formation of a unified regional market. The recent diplomatic efforts appear to have caught the attention of the Kremlin, which worries that freer trade in Central... Read more Central Asian states are knocking down trade barriers, addressing a prerequisite for the formation of a unified regional market. The recent diplomatic efforts appear to have caught the attention of the Kremlin, which worries that freer trade in Central Asia will facilitate the expansion of commercial networks bypassing Russia.
  
  The creation of a unified Central Asian market enabling the seamless movement of goods and services is a central aim of a regional economic blueprint supported by the United States, known as the B5+1 process. That plan, launched in March, calls for the five Central Asian states – Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan – to take the lead in fostering regional free trade and the diversification of export routes.
  
  Given the flurry of diplomatic activity in mid-April, Central Asian leaders seem intent on exploring the B5+1’s potential. The rationale underpinning the B5+1 holds that a Central Asia with simplified customs procedures, along with effective mechanisms to protect property rights and resolve commercial disputes, will be able to attract more Western trade and investment. That, in turn, will make the Middle Corridor trade route the most lucrative option for regional governments and business.
  
  On April 18, a meeting between Uzbek President Shavkat Mirziyoyev and his Tajik counterpart, Emomali Rahmon, yielded 28 interstate agreements covering a variety of political, economic and social areas. Two agreements aim to specifically facilitate Uzbek-Tajik trade, one to streamline customs procedures at road, rail and air border checkpoints, and another covering “industrial property” rights.
  
  Prior to Mirziyoyev’s visit, roughly 600 officials and business executives from both states attended an investment forum in Dushanbe, the Tajik capital. According to the Uzbek Trade Ministry, participants were most interested in developing joint projects in the mining and green energy sectors. They also focused on expanding trade.
  
  The Tajik news service, Asia-Plus, reported that the two countries are working together to create a free trade zone at the Oybek-Fotekhobod border crossing, as well as construct a logistics hub at Andarkhan, in the Ferghana Valley. In addition, Tajikistan’s official Khovar news agency reported the two countries were preparing to eliminate the need for filling out time-consuming permit forms at Tajik-Uzbek border points for freight-carrying trucks transiting through the two countries.
  
  According to official Tajik numbers, bilateral trade turnover totaled $505 million in 2023. But officials aim to increase annual turnover to $2 billion “in the coming years,” according to one Uzbek media report.
  
  The same figure – $2 billion – was the bilateral turnover target mentioned by Kazakhstan’s president, Kassym-Jomart Tokayev, after he signed a series of bilateral agreements with Kyrgyz President Sadyr Japarov on April 19. Two of those agreements concerned measures to ease cross-border movement. At a news conference following the signing ceremony, Tokayev said a major bilateral goal is boosting the exchange of manufactured goods.
  
  “We have come to a common conclusion that there should be no unresolved issues between our countries. Particular attention was paid to strengthening trade and economic ties,” Tokayev said. He added that “specific measures” are being implemented to facilitate trade, including the digitalization of customs operations at numerous Kazakh-Kyrgyz border crossings. The upgrades are expected to be completed by 2028.
  
  Following up on his talks with Japarov, Tokayev held phone discussions with Uzbekistan’s Mirziyoyev on April 23. Though details were scant on the substance of those talks, regional trade was likely a topic. “The dynamic development of bilateral relations and cooperation at the regional level was emphasized,” Tokayev’s presidential press service noted.
  
  Trade statistics indicate that interstate truck-borne freight traffic increased in Central Asia in early 2024. But not all the news is good for free-trade boosters.
  
  Perhaps Central Asia’s most fractious bilateral relationship at the moment is Tajikistan-Kyrgyzstan; trade turnover between those two states amounted to just $2.2 million during the first quarter of 2024, one-fifth the level during the same period last year. Border disputes have sparked armed clashes in recent years, and roughly 10 percent of the Tajik-Kyrgyz border still hasn’t been delimited.
  
  All the movement in Central Asia toward facilitating trade seems to be unsettling to Moscow. A report on the recent diplomatic developments in Central Asia, published April 21 by the moderately pro-Kremlin Nezavisimaya Gazeta, sought to downplay the potential of a functional region-wide market.
  
  The article cited an “expert on Central Asia” named Serdar Aitakov, who indicated that Turkmenistan would remain a major obstacle for the foreseeable future to efforts to promote connectivity. Among the country’s problems is a “catastrophically short” supply of “qualified personnel to organize international cooperation within the framework of contractual mechanisms.” While that may be the case, Ashgabat’s interest in expanding regional trade seems relatively high, evidenced by the large delegation that the government sent to the inaugural B5+1 conference in Almaty.
  
  Alexander Knyazev, a researcher at MGIMO University, one of Russia’s most prestigious institutions of higher learning, described talk of regional economic integration as premature, pointing out that no multilateral trade discussions have made progress on forming a common market. An amalgamation of bilateral agreements, “not illusory multilateral formats,” will shape regional trade, Knyazev contended, taking a swipe at the B5+1 vision.
  
  Even so, bilateral agreements make it easier for regional states to find common ground. The communique issued at the end of the B5+1 conference in Almaty noted that “trade and transit costs are 60 percent higher in land-locked Central Asia than in countries with connection to the sea,” going on to note that “participants agreed that [trade] costs can be reduced by addressing non-geographical barriers that impede the flow of goods and people across borders.”
  
  The agreements signed in mid-April show that Central Asian leaders are addressing this key point. Source: Oilprice.com
- 2024-04-29
  Global Metals Markets Face Uncertainty as Russian Ban Takes Effect
  By now, anyone in the metals market will know that the U.S. and UK recently banned the consumption of Russian aluminum, copper, and nickel produced from April 13 onward. While metal already on the London Metal Exchange (LME) and the Chicago Mercantile... Read more By now, anyone in the metals market will know that the U.S. and UK recently banned the consumption of Russian aluminum, copper, and nickel produced from April 13 onward. While metal already on the London Metal Exchange (LME) and the Chicago Mercantile Exchange (CME) are still available for consumption, no metal delivered after this date is acceptable. This holds true whether buyers purchase the metal directly or have it physically delivered to the exchange to settle a contract.
  
  The Metals Market Continues to React to the Russian Ban
  
  Russia produces about 6% of global nickel, 5% of aluminum, and 4% of copper. That said, the biggest impact is arguably for nickel. This is because Russia is the world’s second-largest refined class 1 nickel producer after China, and class 1 nickel is currently the only type deliverable on the LME. Russian Aluminum also dominates the LME’s warehouse system, making up some 90% of available metal. Indeed, many in the metals industry consider Russia’s position to be a fundamental weakness that the LME has been unable to redress.
  
  Consumers, on the other hand, seem more concerned about what comes next for the metals market. Does banning Russian metals, which average about half of the LME’s inventory but almost none of the CME’s, mean that the two markets will split? Will an arbitrage open up with the CME at a premium and the LME at a discount, thus reflecting the less accessible nature of such a significant portion of the LME’s inventory?
  
  So far, there is no evidence of this. Still, we are only a week into the new regime. Over the last six months, there has been a mass removal of non-Russian aluminum brands from the LME.
  
  Traders Shift Focus to Russian Warrants Amid Ban Fallout
  
  For some time, Indian metal comprised some 50% of inventory levels, but it was diligently sought out and removed by traders. After the Russian ban, those same traders switched to a wholly different game: buying up Russian warrants, taking them off the market, and then delivering them back.
  
  This makes the metal ineligible for Western consumers, and the buyers receive kickbacks on the warehouse rent in the expectation that the metal will sit there indefinitely. That is, the metal will remain there until someone finds a way to economically get it to a market that is not participating in the ban, such as China or India.
  
  China Remains a Massive Consumer of Russian Metal
  
  Other metals market insiders continue to speculate on other issues. Specifically, they want to know whether the predominance of Russian metal in Europe and Asia will depress the physical delivery premiums in those locations or inflate the U.S. Mid-West delivery premium to reflect the greater desirability of the CME’s inventory.
  
  There is already a stark divergence in premiums, with Europe at twice the level and the U.S. at some three times the level of Japan’s Asian Main Japanese Port price. This reflects the overall tightness of the regions relative to one another.
  
  While Japan does not import Russian aluminum, consumption by its neighbors still depresses the regional price. For instance, China is almost certainly buying the large volumes of Russian aluminum it consumes at a sharp discount to the LME, much as the region buys Russian oil at a sharp discount to global oil prices.
  
  For the time being, Russian metal will likely suffer a discount from the LME/CME price for physical trades. Apart from the unwarranted/re-warrant game underway this month, only those countries not recognizing the U.S./UK ban will accept Russian metal. And, let’s face it, currently applies to most of the world. Source: Oilprice.com
- 2024-04-29
  Russia's LNG Expansion Plans Hit the Wall
  Russian oil production has remained strong despite sanctions imposed by Western countries in the wake of Russia’s invasion of Ukraine. The country’s gas and liquefied natural gas (LNG) industries, on the other hand, have suffered due to limited pipeline... Read more Russian oil production has remained strong despite sanctions imposed by Western countries in the wake of Russia’s invasion of Ukraine. The country’s gas and liquefied natural gas (LNG) industries, on the other hand, have suffered due to limited pipeline infrastructure and reliance on Western companies. Rystad Energy expects Russian piped gas to China to increase due to new infrastructure, but the outlook for Russian LNG is less rosy. The Kremlin has set an ambitious plan to commission 100 million tonnes of LNG capacity by 2030 but our forecasts show the country will miss that target by as much as 60 million tonnes.
  
  Despite a rough outlook, we expect Russia’s planned LNG projects will go ahead despite sanctions and challenges in securing vessels and long-term contracts, thanks to government support and incentives around financing and research and development, along with tax breaks. However, due to the challenging environment, Russian LNG production is highly unlikely to reach government targets, with our forecasts predicting only 36.3 million tonnes of output by 2026.
  
  The Russian Ministry of Energy in 2021 released a forecast where the country's LNG production was expected to climb to as much as 140 million tonnes per annum (tpa) by 2035 under a high-case scenario, or 80 million tpa under a more conservative outlook. Last year, the ministry disclosed its plan to boost LNG exports by 33% between 2022 and 2026, to 44 million tonnes per annum. In its conservative-case scenario, this increase is expected to reach only 18%, with a target of 39 million tonnes per annum.
  Related: Reuters Estimates: Russian Oil and Gas Revenue to Double in April
  
  Although European countries have almost entirely cut off Russian piped gas, Europe still depends on Russia for much of its LNG supply. LNG exports to Europe rose by about 5% year-on-year in the first quarter of 2024, and replacing these volumes in the short term is a major challenge for the continent.
  
  “Russian oil exports may have escaped the worst of the impact from Western sanctions. Piped gas exports have suffered greatly, but the LNG industry has been hit the hardest. The Russian government is still optimistic about the country’s output, but without a significant change in fortunes, reaching the targets may be nothing more than a pipe dream,” says Swapnil Babele, vice president of upstream research at Rystad Energy.
  
  In the short term, we expect only LNG projects from independent Russian gas producer Novatek to proceed, with delays of at least five years due to vessel procurement challenges and current market conditions. The company's primary goal is to construct a low-cost LNG platform, which involves developing proprietary LNG technologies and expanding output by deploying these new technologies. The main challenge for Novatek will be developing the logistics and looking for new buyers.
  
  Our current forecasts show Russia commissioning about 68 million tonnes of liquefaction capacity by 2035, with actual LNG production being around 40 million tpa. Novatek will account for almost 80% of that total through its Yamal LNG, Arctic LNG-2, and Murmansk LNG projects.
  
  Europe became the top destination for Russian LNG exports in 2022, surpassing Asia. Russia’s LNG exports rose 10% in 2022 to about 33 million tonnes, 17 million tonnes of which was sent to European markets – a 22% increase from the previous year. Last year, Russian LNG production dropped to about 31 million tonnes due to planned maintenance at the Sakhalin-2 and Yamal LNG projects in the second half of the year. In 2024, Rystad Energy expects Russian LNG production to total about 34 million tonnes, thanks in part to the commissioning of Arctic LNG-2 Train 1.
  
  Since 2014, when the first Russian LNG sanctions were imposed, the country prioritized developing its own liquefaction technologies and is trying to meet its demand for LNG equipment with local providers. Of these providers, Atomenergomash, the mechanical engineering division of Rosatom, designs and manufactures cryogenic LNG pumps, heat exchangers and turbo-expanders. Kazancompressormash constructs compressor units for LNG facilities, and Cryo-LNG supplies tank containers for LNG transportation and storage.
  
  In 2018, Novatek obtained a patent for its “Arctic cascade” technology, which was implemented on the fourth train of Yamal LNG. However, the technology was not fully developed, and the project encountered several issues that led to modifications in the patent. In June 2023, the company secured another patent for the “Arctic mix” technique, which was designed for natural gas liquefaction on a large scale using mixed refrigerants. This technology is expected to be the primary method for future projects involving gravity base structures (GBS), with a capacity of more than 6 million tpa per train.
  
  Source: Oilprice.com
- 2024-04-29
  Drone Attacks Take Khor Mor Gas Field Offline, Claims Lives
  Four expatriate workers lost their lives, and two others sustained injuries in a recent drone attack on the Khor Mor gas field in Iraq's Kurdistan region. This attack, reported by an advisor to the Iraqi Kurdish Prime Minister and a senior Kurdish political... Read more Four expatriate workers lost their lives, and two others sustained injuries in a recent drone attack on the Khor Mor gas field in Iraq's Kurdistan region. This attack, reported by an advisor to the Iraqi Kurdish Prime Minister and a senior Kurdish political source, has also resulted in the suspension of production at the site.
  
  The ramifications of the assault extend beyond casualties, impacting electricity generation in the region. Kurdistan's electricity ministry stated that the drone attack disrupted gas supplies to power plants, leading to an approximate 2,500 MW reduction in electricity output.
  
  Pearl Petroleum—a consortium comprised of Dana Gas and Crescent Petroleum (operators of the Kurdistan Gas Project), along with OMV, MOL, and RWE hold the rights to develop Khor Mor and Chemchemal, two of Iraq's largest gas fields.
  
  Earlier this week, U.S. troops shot down two drones outside a base in Iraq, the Pentagon has said, although the U.S. military could not confirm whether the attack was targeting U.S. forces.
  
  No group has taken responsibility for Friday's attack on the gas field that contains more than 7 trillion cubic feet of natural gas reserves.
  
  "Good efforts have been made in the past to improve the energy sector and economic infrastructure in Iraq, especially in the Kurdistan Region, and while steps are being taken to resolve the disputed, evil and destructive hands once again targeted the Khor Mor gas field in a terrorist act. These repeated strikes must be stopped, and we urge the Iraqi government to find the perpetrators of this terrorist act and bring them to justice," Peshawa Hawramani, KRG spokesperson said in Friday a statement following the attack.
  
  The KRG spokesperson said that the four who lost their lives were Yemeni.
  
  Source: Oilprice.com