Oil prices under pressure as China considers Russian crude

China added some downward pressure on oil prices this week when it clearly indicated its intention to buy more discounted Russian oil. Between China and India, Russia is racing to focus on Asia as the European Union tries to get rid of its oil.

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Friday 20 May 2022

So far, it has been its purchases of heavily discounted Russian crude that has kept markets guessing if Moscow could head towards Asia. However, China grabbed the headlines this week, as Beijing launched direct intergovernmental talks on buying discounted crude in order to “replenish strategic stocks”. This, despite the possibility of an imminent reopening of China, added some downward pressure on oil prices as ICE Brent crude headed around $112 a barrel by Friday.

The European Union launches a $220 billion campaign to get rid of Russian fossil fuels. European Commission a statement Its $220 billion plan to end its dependence on Russian fossil fuels by 2027 consists of $120 billion for new renewable projects, $30 billion for power grids, and $59 billion for power and heat pump supplies.

The United States to ease sanctions on Venezuela. The Biden administration plans to AllowEuropean companies are still working in Venezuela to transfer more oil to the continent, while major US oil companies are working Chevron (NYSE: CVX) It will be allowed to negotiate the resumption of activities in the Latin American country.

Moscow says that tariffs lead to higher prices. Russia’s top authorities have claimed that the US proposal to impose tariffs on Russian oil will cause buyers to pay more as the cost of the tariff will be priced in the final price.

UN calls for global end to fuel subsidies. United Nations Secretary-General António Guterres urge All governments are ending fossil fuel subsidies, which have jumped to $500 billion globally, in a bid to ramp up pressure on polluters ahead of the COP27 climate conference in Egypt in November.

ADNOC announces the biggest discoveries of the year. UAE National Oil Company ADNOC announce Three oil discoveries totaling 650 million barrels, with a larger increase in the Bu Hasa onshore reserve balance of 500 million barrels, which means that there may be more Murban exports in the coming years.

China plans to dispose of Russian crude for strategic stocks. According to Bloomberg ReportThe Chinese government is in direct talks with the Russian authorities to start purchasing additional supplies of crude that will be used to replenish China’s strategic stocks.

Occidental relocates to Columbia Offshore Blocks. Colombia’s state-controlled oil company Ecopetrol (NYSE: ECO) announce it as a team With the major American oil company Occidental (NYSE: OXY) To develop four deep-water blocks off the coast of Colombia, the latter serving as the block operator.

Brazilian wildcats produced by Shell’s Offshore fail to impress. Three exploratory wells drilled by a major British oil company Shell (LON: SHEL) In three offshore blocks in Brazil, costing more than a billion dollars, all turned To dry it up, another setback for the country after Exxon failed to carry out a $1.6 billion drilling campaign.

ADNOC is building a new giant liquefied natural gas facility. UAE national oil company ADNOC has announced that it will build a new liquefied natural gas facility in Fujairah with a capacity of 9.6 million tons per year, more than double the country’s current capacity of 5.8 million tons per year once the planned liquefaction plant becomes operational in 2027.

Iron ore rises with mortgage rate cut in China. With China unexpectedly cutting the 5-year loan prime rate by 15 basis points to 4.45%, China’s iron ore futures contract the flowerSignificantly amid hopes of a faster-than-expected recovery in construction activity, with the June contract up 6% today to $127/MT.

ExxonMobil sells Barnett Shale assets for $750 million. In a widely anticipated move, a major American oil company ExxonMobil (NYSE: XOM) It sold its shale gas assets Barnett to Thailand-owned BKV Corp for $750 million, well above last year’s $500 million valuation thanks to a high natural gas price environment.

Iraq is seeking a legal move to control Kurdistan. The Iraqi Ministry of Oil has It said The law firm of Cleary Gottlieb appointed Steen and Hamilton to reach out to oil and gas companies operating in Iraqi Kurdistan to renegotiate their contracts and bring them in line with applicable Iraqi law, bypassing the KRG.

Half of Russia’s gas buyers open new bank accounts. Russian Deputy Prime Minister advertiser This half of the Gazprom (MCX: GAZP) European gas buyers opened accounts in Gazprombank in foreign currencies and rubles, which may indicate a new modus operandi in the confrontation between the European Union and Russia.

Vitol can remain in Mexico after the bribery takers are named. World Trade House Vitol can continue to operate in Mexico, according to To the country’s president AMLO, having appointed officials who allegedly took bribes during 2015-2020 and may have also paid $30 million in damages.

By Tom Cole for Oilprice.com

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