IEA: Current Energy Crisis Is “Much Bigger” Than 1970s Oil Crunch (31 May 2022): By Charles Kennedy - The world faces a “much bigger” energy crisis than the one of the 1970s, the Executive Director of the International Energy Agency (IEA), Fatih Birol, told German daily Der Spiegel in an interview published on Tuesday. “Back then it was just about oil,” Birol told the news outlet. “Now we have an oil crisis, a gas crisis and an electricity crisis simultaneously,” said the head of the international agency created after the 1970s shock of the Arab oil embargo. The energy crisis started in the autumn of last year, but the Russian invasion of Ukraine made it much worse as the markets fear disruption to energy supply out of Russia, while Western governments are imposing increasingly restrictive sanctions on Moscow over the war in Ukraine. The EU agreed late on Monday to ban most of the imports of Russian oil, leaving pipeline supply exempted from the embargo, for now. This will further tighten already tight crude and product markets. (Source: Oil Price)
Oil And Equities On The Rise As China Eases COVID Restrictions (30 May 2022): By ZeroHedge - While US cash markets are closed today, the rest of the world - as well as US futures - are busy levitating amid renewed optimism that China has finally managed to contain its latest Covid breakdown after Beijing said the outbreak is now under control and the country eased more virus curbs. The upside momentum was also boosted by the best week on Wall Street since November 2020, which was catalyzed by speculation that the Fed will pause its hiking plans in September (and then proceed to ease once the recession is official). At 730am ET, emini futures trade 30 points higher or 0.70%, while Nasdaq futures jumped 1.2% higher. Oil climbed in response to the easing of Chinese lockdowns and as the European Union worked on a plan to ban imports of Russian crude, while the dollar fell for a third day. (Source: Oil Price)
Hydrogen Or Electric: Why Not Both? (29 May 2022): By Felicity Bradstock - Renault has just announced its first hydrogen-electric hybrid concept car, using hydrogen to push its EV models further. While automakers continue to argue over which technology will power the future of transport – electric batteries or hydrogen fuel cells – Renault is combining the two to offer an alternative option. Unlike a traditional hybrid car, which uses fossil fuels to power the vehicle, a hydrogen-electric hybrid incorporates a hydrogen fuel cell into the design. This means that the vehicle can run off electricity or hydrogen fuel, much in same the way as a traditional hybrid. In the case of Renault, its Scenic Vision has a hydrogen engine, electric motor, battery, fuel cell and a hydrogen tank. The tank weighs around 2.5kg and takes approximately five minutes to fill. The battery component is expected to be recyclable. The addition of a hydrogen fuel cell could significantly increase the range of the EV, to around 800 km, allowing drivers to switch to fuel on longer journeys. (Source: Oil Price)
Rystad: Oil And Gas Investment To Rise 20% In 2022 (26 May 2022): By Charles Kennedy - Global oil and gas investment is set to rise by 20% this year, according to Rystad Energy, with growth driven by soaring oil prices and big money flowing into projects in Brazil, Guyana, West Africa and Australia, the Houston Chronicle reports. Earlier this year, Rystad had forecast 8% growth for 2022; however, with Brent consistently topping $110 and WTI flirting with the same levels, we are now witnessing the highest growth rate forecasts since 2008. In the United States, investment in shale is set to increase by 35%, with the Permian basin leading the way, Rystad said, while investment in deepwater offshore drilling is set to rise by 30%. (Source: Oil Price)
U.S. Natural Gas Prices Hit $9 For The First Time Since 2008 (25 May 2022): By Tsvetana Paraskova - U.S. benchmark natural gas prices jumped to above $9 per million British thermal units (MMBtu) early on Wednesday, driven by high LNG exports, warmer weather, and volatile trade ahead of the prompt-month contract expiry. As of 9:15 a.m. EST on Wednesday, the front-month natural gas futures at the Henry Hub, the U.S. benchmark, had jumped to $9.168/MMBtu, up by 4.93% on the day. The June contract expires on Thursday, while options expire on Wednesday. U.S. natural gas prices have surged by more than 130% since the beginning of the year, due to strong demand for LNG, especially in Europe, which is scrambling to replace as much Russian gas as soon as possible. In addition, early heat waves in the U.S. at the start of May boosted demand for air conditioning and power generation, while supply growth is struggling to catch up with demand. Moreover, working natural gas stocks are 17% lower than the year-ago level and 15% lower than the five-year average for this week, according to the EIA’s latest Weekly Natural Gas Storage Report released on May 19. (Source: Oil price)
Europe’s Largest Port Plans To Become A Major Hydrogen Hub (24 May 2022): By Alan Mammoser - The largest port in Europe is set to become a major part of the hydrogen economy of the future, building out infrastructure to produce, transport, and receive the gas. The Rotterdam Port Authority plans to build large electrolysis units on reclaimed land and power them with new offshore wind turbines. The port is also preparing for hydrogen imports from around the world, studying over 100 supply opportunities to establish export chains. (Source: Oil Price)
Tensions Rise As Iraq Prepares To Usurp Kurdish Oil Contracts (23 May 2022): By Charles Kennedy - Tensions are rising between Baghdad and Kurdish officials in the semi autonomous Kurdistan Regional Government in Northern Iraq as Iraq’s Oil Ministry prepares to take control of the Kurdish oil sector, including contracts with foreign companies. On Saturday, the Iraqi Oil Ministry announced plans to create a new national oil corporation in the Kurdistan region of Iraq, Reuters reported, prompting Kurdish officials on Monday to call on Baghdad to refrain from any “unilateral decisions”, a KRG spokesman told S&P Global Commodity Insights in an exclusive interview. While Baghdad and Erbil, in the Kurdistan region, have been squabbling over Kurdistan’s oil sales for many years, the situation escalated significantly in February, when an Iraqi federal court declared Kurdistan’s oil and gas sector “unconstitutional” from a legal standpoint. (Source: Oil Price)
Renewables Remain ‘Cheap’ Despite Supply Chain Chaos (22 May 2022): By Alex Kimani - With the energy transition in full swing, new energy research provider BloombergNEF estimates that the global transition will require ~$173 trillion in energy supply and infrastructure investment over the next three decades, with renewable energy expected to provide 85% of our energy needs by 2050. BNEF projects that by 2030, consumption of lithium and nickel by the battery sector will be at least 5x current levels. Meanwhile, demand for cobalt, used in many battery types, will jump by about 70%. Diverse EV and battery commodities such as copper, manganese, iron, phosphorus, and graphite--all of which are needed in clean energy technologies and are required to expand electricity grids--will see sharp spikes in demand. (Source: Oil Price)
Is The World Meeting Its Climate Pledges? (19 May 2022): By Haley Zaremba - Last November, the 2021 United Nations Climate Change Conference, commonly known as COP26, took place amidst great uncertainty as the world finished out its second year of living with and struggling to adjust to the novel coronavirus pandemic. Having already been postponed for a year due to global shutdowns, the summit came together under great economic and ecological pressures and few clear visions for the future. Despite all obstacles, COP26 managed to put together an actionable agreement for furthering the global fight against climate change. Six months after the agreement was inked, the world has only gotten crazier – Russia invaded Ukraine, exacerbating a global energy crisis, inflation has kicked into overdrive around the world, and China has initiated a hare-brained policy with the impossible aim of eradicating Covid at the expense of its economy and social harmony. (Source: Oil Price)
What China’s Dramatic Drop In Energy Demand Means For Its Economy (18 May 2022): By Haley Zaremba - The fallout of China’s zero COVID policy is spreading as economic downturns and social unrest intensifies across the nation. The Chinese government’s head-scratcher of a decision to eradicate COVID completely – a feat which experts agree is impossible as the virus is already widespread, ultra-contagious, and continuing to mutate. In what is by all accounts a misguided attempt to crack down on COVID, China has imposed partial or full lockdowns on dozens of cities, including the major economic hub of Shanghai. The move has made the nation’s industrial production and consumption activity plummet to their lowest levels since the first wave of the pandemic in early 2020. (Source: Oil Price)
A New Railway Could Transform Trade And Transport In The Gulf (17 May 2022): By Oxford Business Group - Following delays, the long-awaited GCC Railway looks likely to be revitalized, a move that could transform trade and connectivity across the Gulf. The project was given a significant boost in December last year when leaders of the six GCC countries approved the establishment of the GCC Railways Authority, the body that is expected to oversee the coordination of the project. The decision marks a potentially significant development for rail infrastructure in the Gulf. After being debated for decades, the GCC Railway project was initially approved by all six member states in 2009. However, fiscal pressures delayed plans. These were associated with the oil price drop of 2014 and, more recently, the Covid-19 pandemic and diplomatic tensions, which resulted in an economic blockade of Qatar by some of its regional counterparts from 2017 to 2021. (Source: Oil Price)
Oil Prices Surge Past $113 As Shanghai Signals End Of Lockdown (16 May 2022): By Charles Kennedy - Oil prices have topped $113 per barrel on optimism that China’s lockdowns are coming to an end and demand will not take a prolonged hit. In early afternoon markets Monday, news that Shanghai was seeing a strong recovery from COVID cases, with plans in place to ease lockdown restrictions beginning this week, outweighed a litany of bearish news for oil. Brent was at $113.6 per barrel on 1:38 pm EST, while WTI was trading at $113.5. Authorities in Shanghai on Monday said restrictions would finally ease, in stages, after nearly six weeks of lockdowns that have shaken the Chinese economy and disrupted global supply chains. On 1 June, Shanghai is scheduled to see lockdowns end, with a gradual easing beginning on May 21st. (Source: Oil Price)
How Energy Wealth Funds Are Being Leveraged To Diversify Economies (14 May 2022): By Felicity Bradstock - The success of Norway’s sovereign wealth fund has encouraged other oil-rich nations to follow in its footsteps by developing their own national funds from energy revenues. Countries across the Middle East have already accumulated vast amounts of wealth from their funds, now using them to diversify their economies to industries beyond oil and gas, to ensure the longevity of their wealth. And countries across new oil regions, such as Africa and the Caribbean, are now looking to do the same to develop their national economies. The Norwegian sovereign wealth fund was set up in 1996 to contribute to the national economy, providing fiscal security in case of a decrease in oil prices. It has since helped the government to develop a social welfare system, providing quality free education and healthcare, as well as allowed Norway to invest heavily across many countries, companies, and industries. It has long been hailed as the most successful in the world, valued at almost $1.4 trillion in 2021. (Source: Oil Price)
Six Years Late And 250% Over Budget: Georgia’s Newest Nuclear Plant (12 May 2022): By Leonard Hyman & William Tilles - It has not been a good week for advocates of new nuclear power plant construction in the US. An energy cooperative in Georgia, the Municipal Energy Authority of Georgia (MEAG), announced in a recent filing that the new twin unit Vogtle 3 and 4 nuclear generating stations approaching completion in Waynesboro, Georgia were now likely to cost roughly $34 billion. MEAG, along with other electric co-ops like Oglethorpe Power and Dalton Utilities own minority stakes in the nuclear facility along with majority owner Georgia Power. The two Westinghouse design AP1000 reactors, which are now scheduled to enter commercial service in 2023, were originally estimated to cost $14 billion and enter commercial service in 2016/2017, that is, six years late and 250% over budget. And people wonder why this technology is still struggling for commercial respectability. (Source: Oil Price)
Asian Refinery Restarts After Two-Year Hiatus (11 May 2022): By Charles Kennedy - An Asian refinery co-owned by Saudi oil giant Aramco has resumed crude processing for the first time since closing after a deadly fire in 2020, sources familiar with the operations told Reuters, in what could be some relief for tight Asian and global markets for refined products. The Pengerang Refining and Petrochemical complex in Malaysia, capable of processing 300,000 barrels per day (bpd) of crude oil, is owned and operated by PRefChem, a strategic alliance between Malaysia’s national oil company PETRONAS and Saudi Aramco, through an equal partnership in two joint venture companies. The refinery was closed in March 2020 after a fire killed five people. The closure of the facility coincided with the crash in global fuel demand as countries raced to impose lockdowns due to COVID. (Source: Oil Price)
The Call For Windfall Taxes On Energy Firms Is Growing (10 May 2022): By City A.M - Tesco chairman John Allan has joined calls for energy giants to be slapped with a windfall tax to ease the pressure on households suffering the most from the cost-of-living crisis. Speaking on BBC Radio 4’s Today program he argued there was an “overwhelming case” for a one-off levy on North Sea oil and gas companies, revealing some of the supermarket’s customers have started rationing the amount of food they buy at the supermarket. He warned the country was facing “real food poverty for the first time in a generation,” and that people were finding it even harder to mitigate soaring energy costs. (Source: Oil Price)
The Inevitable Decline Of Russia’s Oil Industry (9 May 2022): By Tsvetana Paraskova - Russia’s oil production is already falling and will continue dropping in the coming months and years as Moscow will not be able to redirect to China and India all the volumes it is losing in the West. As the European Union tries to work out the details of a proposed full embargo on Russian oil imports by the end of the year - by potentially exempting Hungary and Slovakia for two years from complying with a ban - buyers in Europe and major international traders are increasingly shunning Russian oil. Western sanctions on banking transfers and the expected EU embargo have forced Russia to reduce oil production. Russia simply doesn’t have enough storage, and its willing customers in emerging Asia are not expected to offset the drop in deliveries to Europe fully. (Source: Oil Price)
Oil Is Here To Stay, But We Can Reduce Its Emissions (8 May 2022): By Felicity Bradstock - Low-carbon oil seems pivotal to the future of fossil fuel production as it becomes clear that the world is still highly dependent on crude. Working to fill the gap left by Russia, countries and oil firms around the world are increasing their oil production and long-term output plans. But to achieve ambitious carbon emissions promises, low-carbon oil will be necessary. Several international oil majors have announced plans to shift their fossil fuel production to low-carbon oil, alongside natural gas, in the coming years as they strive to reduce carbon emissions without giving up on crude. Most of these low-carbon promises are based on new operations in regions with recent discoveries of huge reserves such as the Caribbean and Africa. Many are abandoning existing operations in countries with dwindling oil reserves in favor of new areas, where they can establish low-carbon production methods and incorporate carbon capture technology. (Source: Oil Price)
Rare Earths Supply Is About To Get Much Tighter (5 May 2022): By Ag Metal Miner - There’s something afoot on the rare earths front in China. Specifically, the country recently decided that it wants to tighten its export control laws. The regulation passed about two years ago to stop importing countries from diverting “Chinese products for non-intended use.” In most cases, the “products” refer to rare earth elements, of which China is the world’s biggest producer. The announcement comes just a few days after news that an American company may have found the largest reserves of rare earth elements in the US. In fact, US-China relations experts are still trying to connect the “geopolitical” dots around China’s latest move and its implications. (Source: Oil Price)
$100 Oil Encourages Iraq To Fast-Track Production At Two Major Oil Fields (3 May 2022): By Simon Watkins - With Brent crude oil still holding above the key US$100.00 per barrel support level, Iraq is looking to optimise its oil output, including from those fields that are regarded as slightly more difficult to exploit than others in the country. Encouraging the development of these fields – including several in the ThiQar province, most notably Nasiriya and Gharraf – also allows Iraq to judge which of the potential foreign suitors for these more difficult oil and gas projects might make suitable partners in other areas of its hydrocarbons sectors. For obvious reasons right now, companies from the U.S. and China are at the centre of the field development plans on ThiQar, with Russia taking more of a backseat. In Nasiriya’s case, the original plans to develop the potentially 4.36 billion-barrel oilfield on a standalone basis were shelved in the lead-up to the Iran-Iraq war that began in 1980 and lasted until 1988. The field, discovered in 1975 by the then-Iraq National Oil Company (INOC), eventually came on-stream in 2009 and was listed on the 2009-2010 fast-track development plan that aimed to raise its output to at least 50,000 bpd in the first phase. At that point, Italy’s ENI, Japan’s Nippon Oil, the U.S.’s Chevron, and Spain’s Repsol were invited to submit bids to develop the field on an engineering procurement construction (EPC) contract basis. The Japanese consortium led by Nippon Oil – also comprising Inpex, and JGC Corporation - looked set to win the contract before negotiations broke down again. (Source: Oil Price)
The Battery Boom Will Redraw Geopolitical Maps (3 May 2022): By Tsvetana Paraskova - Russia’s invasion of Ukraine has exposed, once again, the vulnerability of the global energy markets and economy to the actions of petrostates with the power to weaponize their energy resources for political purposes. In the biggest shock to oil flows since the 1973 Arab oil embargo, the war in Ukraine and the hesitancy of Europe to immediately punish Putin threw into sharp relief the geopolitical power that countries with huge oil and gas resources currently hold. The European Union’s response to Russia’s invasion of Ukraine is to wean off Russian energy as soon as possible and reduce overall fossil fuel consumption in the longer term in order to stop being beholden to malign actors for energy sources. The mad dash to boost renewables and transport electrification, however, comes with its own set of geopolitical issues. (Source: Oil Price)
How 3D Printers Could Transform The Energy Industry (2 May 2022): By Felicity Bradstock -The potential for 3D printing in the energy industry is gradually becoming clear. After years of encouraging oil and gas majors to adopt the technology for on-site additive manufacturing, printing firms are finally being recognized for their potential in the field. The global 3D printing market was worth over $13 billion in 2021 and is expected to expand at a CAGR of 20.8 percent between 2022 and 2030. So far, one of the biggest uses of technology has been for medical needs. But as the market rapidly expands, other industries are looking at how the technology might be used to enhance operations. 3D polymer material manufacturers have been making medical devices such as hearing aids, which have a high demand in the U.S. Having perfected the technique of creating several medical devices, 3D printing companies believe that can also add significant value to the energy sector by creating components needed on energy sites. This would decrease the amount of time needed to obtain vital components when they break, as well as reduce the carbon footprint of having to ship these pieces. It also has the potential so solve some of the key supply chain problems energy companies are currently dealing with. (Source: Oil Price)
Was Donald Trump Right About The U.S. Dollar? (1 May 2022): By Michael Kern - In a stark departure from tradition whereby American presidents refrained from talking about the value of the American dollar in order to avoid shaking up global markets, the 45th president of the United States regularly tweeted that he wanted the USD on the weaker side. Former President Donald Trump was blunt when asked by a WSJ reporter why he wanted the American currency to weaken: “Our companies can’t compete with [China] now because our currency is too strong. And it’s killing us.” Trump might have left office more than a year ago, but he’s still to get his wish: the U.S. dollar has continued to soar against its major rivals and has even hit multi-year highs. (Source: Oil Price)