US oil supplies at a 17½ year low; total oil+products supplies at a 13½ year low after record exports

US oil supplies at a 17½ year low with SPR at a 34½ year low; gasoline exports at a 3½ year high; record exports of oil + products over 4 weeks leaves total oil + products supplies at a 13½ year low...

oil prices rose for a sixth consecutive week after China ended 3 months of lockdowns and after the EU banned 90% of Russian oil imports.. after rising 4.3% to $115.07 a barrel last week as the European embargo of Russian oil began to seem more likely. the contract price for US light sweet crude for July delivery rose 62 cents, or 0.5%, to $115.69 a barrel in overseas trading on Memorial Day as Shanghai allowed all its manufacturers to resume operations beginning in June and officials said Beijing’s Covid outbreak was under control and as Brent crude, the international oil benchmark passed $120 a barrel as traders waited to see whether a European Union meeting would reach an agreement on banning Russian oil imports...oil prices jumped early Tuesday after EU leaders reached an agreement late Monday to ban 90% of Russian crude and was trading at $118.46 per barrel by 8 a.m., and rose to as high as $119.98 per barrel before reversing course in mid-afternoon following an unsubstantiated report from The Wall Street Journal that OPEC was considering suspending Russia from the group's output agreement​,​ and settling at $114.67 a barrel, down 40 cents from Friday's close...oil prices advanced more than 1.5% in early trading Wednesday after Saudi Arabia hailed their oil-market cooperation with Russia in the OPEC+ alliance, but were unmoved by the American Petroleum Institute's report of a draw from crude oil inventories, and settled 59 cents higher at $115.26 a barrel, underpinned by a U.K. ban on providing insurance for waterborne Russian oil cargoes, further limiting their ability to circumvent Western sanctions...but oil prices plunged over $3 in early Asian trading on Thursday as traders took profits ahead of the monthly OPEC meeting amid reports that the Saudis were prepared to raise output beyond their pledged quotas, but rebounded in New York after the OPEC+ meeting ended quickly with an agreement for a less than expected 648,000 barrel per day output increase, and then extended their gains after the EIA reported a larger than expected draw from crude supplies and modest draws of gasoline and distillates to finish trading $1.61 higher at $116.87 a barrel, while NYMEX RBOB (gasoline) July futures surged 11.93 cents to a record high $4.1909 per gallon...oil prices moved higher again early Friday as the modest OPEC output increase failed to assuage concerns over a widening supply deficit​,​ and settled $2 higher at $118.87 a barrel amid widespread speculation that OPEC would not be able to even meet that modest production increase...oil prices thus ended 3.3% higher on the week, largely on supply concerns, with gains spearheaded by China's reopening following 3 months of Covid lockdowns and the European Union​'s​ embargo on Russian oil imports..

meanwhile, natural gas prices fell for the third time in thirteen weeks as June forecasts turned cooler...after finishing 6.7% higher at $8.727 per mmBTU after making a new 13½ year high three days last week, the contract price of natural gas for July delivery tumbled 58.2 cents, or nearly 7%, to $8.145 on Tuesday on higher dry gas production over pr​evious​ days and a bearish June temperature outlook from one of the weather forecast models...but July natural gas almost reversed that ​entire ​drop on Wednesday, with prices rising 55.1 cents to $8.696 per mmBTU, on a large drop in output and record power demand in Texas, with lower wind generation forcing switching to gas providing additional price support...however, natural gas prices wiped out early gains of more than 35 cents on Thursday to fall 21.1 cents to $8.485 per mmBTU, after the EIA reported a larger increase to gas inventories than had been expected....prices edged back up 3.8 cents to $8.523 per mmBTU on Friday on forecasts for lower output, higher LNG exports, and warmer weather than previously forecast over the next two weeks, but still ended 3.3% lower on the week..

The EIA's natural gas storage report for the week ending May 27th indicated that the amount of working natural gas held in underground storage in the US rose by 90 billion cubic feet to 1,902 billion cubic feet by the end of the week, which still left our gas supplies 397 billion cubic feet, or 17.3% below the 2,299 billion cubic feet that were in storage on May 27th of last year, and 337 billion cubic feet, or 15.3% below the five-year average of 2,239 billion cubic feet of natural gas that have been in storage as of the 27th of May over the most recent five years....the 90 billion cubic foot injection into US natural gas working storage for the cited week was more than the average forecast for a 87 billion cubic foot injection from an S&P Global Platts survey of analysts, while it was less than the average injection of 100 billion cubic feet of natural gas that had typically been added to our natural gas storage during the same week over the past 5 years, and also less than the 109 billion cubic feet that were added to natural gas storage during the corresponding week of 2021... 

The Latest US Oil Supply and Disposition Data from the EIA

US oil data from the US Energy Information Administration for the week ending May 27th indicated that a even after another big oil withdrawal from the SPR, we had to pull oil out of our stored commercial crude supplies for the 4th time in 9 weeks, and for the 27th time in the past 47 weeks, mostly because of a big decrease in oil supplies that could not be accounted for…our imports of crude oil fell by an average of 266,000 barrels per day to an average of 6,218,000 barrels per day, after falling by an average of 82,000 barrels per day during the prior week, while our exports of crude oil fell by 351,000 barrels per day to 3,990,000 barrels per day, after rising by 821,000 barrels per day to a 26 month high of 4,341,000 barrels per day during the prior week....together, that meant that our trade in oil worked out to a net import average of 2,228,000 barrels of oil per day during the week ending May 27th, 83,000 more barrels per day than the net of our imports minus our exports during the prior week…over the same period, production of crude oil from US wells was reportedly unchanged at 11,900,000 barrels per day, and hence our daily supply of oil from the net of our international trade in oil and from domestic well production appears to have totaled an average of 14,128,000 barrels per day during the cited reporting week…

Meanwhile, US oil refineries reported they were processing an average of 16,033,000 barrels of crude per day during the week ending May 27th, an average of 236,000 fewer barrels per day than the amount of oil than our refineries processed during the prior week, while over the same period the EIA’s surveys indicated that a net of 1,498,000 barrels of oil per day were being pulled out of the supplies of oil stored in the US....so based on that reported & estimated data, this week’s crude oil figures from the EIA appear to indicate that our total working supply of oil from storage, from net imports and from oilfield production was 406,000 barrels per day less than what our oil refineries reported they used during the week…to account for that disparity between the apparent supply of oil and the apparent disposition of it, the EIA just inserted a (+406,000) barrel per day figure onto line 13 of the weekly U.S. Petroleum Balance Sheet in order to make the reported data for the daily supply of oil and for the consumption of it balance out, a fudge factor that they label in their footnotes as “unaccounted for crude oil”, thus suggesting there must have been an error or omission of that magnitude in this week’s oil supply & demand figures that we have just transcribed..... moreover, since last week’s unaccounted for oil factor was at (+1,225,000) barrels per day, that means there was a 819,000 barrel per day difference between this week's balance sheet error and the EIA's crude oil balance sheet error from a week ago, and hence the week over week supply and demand changes indicated by this week's report are useless.... however, since most everyone treats these weekly EIA reports as gospel, and since these figures often drive oil pricing, and hence decisions to drill or complete oil wells, we’ll continue to report this data just as it's published, and just as it's watched & believed to be reasonably accurate by most everyone in the industry...(for more on how this weekly oil data is gathered, and the possible reasons for that “unaccounted for” oil, see this EIA explainer)….

week's 1,498,000 barrel per day decrease in our overall crude oil inventories left our total oil supplies at 941,325,000 barrels at the end of the week, our lowest oil inventory level since October 22nd, 2004, and thus a 17 1/2 year low….this week's oil inventory decrease came as 724,000 barrels per day were being pulled our commercially available stocks of crude oil, while 774,000 barrels per day of oil were being pulled out of our Strategic Petroleum Reserve at the same time....that draw on the SPR would now include the initial emergency withdrawal under Biden's "Plan to Respond to Putin’s Price Hike at the Pump", that is expected to supply 1,000,000 barrels of oil per day to commercial interests from now up to the midterm elections in November, in the hope of keeping gasoline and diesel fuel prices from rising further up until that time, as well as the previous 30,000,000 million barrel release from the SPR to address Russian supply related shortfalls, and the administration's earlier plan to release 50 million barrels from the SPR to incentivize US gasoline consumption....including other withdrawals from the Strategic Petroleum Reserve under recent release programs, a total of 129,555,000 barrels of oil have now been removed from the Strategic Petroleum Reserve over the past 22 months, and as a result the 526,592,000 barrels of oil still remaining in our Strategic Petroleum Reserve is now the lowest since June 19th, 1987, or nearly at a 35 year low, as repeated tapping of our emergency supplies for non-emergencies or to pay for other programs had already drained those supplies considerably over the past dozen years, even before the Biden administration....now, the total 180,000,000 barrel drawdown expected over the next six months will remove almost a third of what remains in the SPR, and leave us with what would be less than a 20 day supply of oil at today's consumption rate...

Further details from the weekly Petroleum Status Report (pdf) indicate that the 4 week average of our oil imports fell to an average of 6,385,000 barrels per day last week, which was still 7.3% more than the 5,951,000 barrel per day average that we were importing over the same four-week period last year….this week’s crude oil production was reported to be unchanged at 11,900,000 barrels per day even though the EIA's rounded estimate of the output from wells in the lower 48 states was 100,000 barrels per day higher at 11,500,000 barrels per day, because Alaska’s oil production was 10,000 barrels per day lower at 450,000 barrels per day and thus subtracted 100,000 barrels per day from the final rounded national total (by the EIA's math, not mine)...US crude oil production had reached a pre-pandemic high of 13,100,000 barrels per day during the week ending March 13th 2020, so this week’s reported oil production figure was 9.2% below that of our pre-pandemic production peak, but was 41.2% above the interim low of 8,428,000 barrels per day that US oil production had fallen to during the last week of June of 2016...

US oil refineries were operating at 92.6% of their capacity while using those 16,033,000 barrels of crude per day during the week ending May 27th, down from the 93.2% utilization rate of the prior week, but a fairly normal refinery utilization rate for early summer…the 16,033,000 barrels per day of oil that were refined this week were 2.8% more barrels than the 15,597,000 barrels of crude that were being processed daily during week ending May 28th of 2021, and 20.5% more than the 13,307,000 barrels of crude that were being processed daily during the week ending May 29th, 2020, when US refineries were operating at what was then a much lower than normal 71.8% of capacity during the first wave of the pandemic, but still 5.3% less than the 16,938,000 barrels that were being refined during the prepandemic week ending May 31st, 2019, when refinery utilization was at a fairly normal 91.8% for the last weekend of May...

Even with the decrease in the amount of oil being refined this week, gasoline output from our refineries was much higher, increasing by 545,000 barrels per day to 9,968,000 barrels per day during the week ending May 27th, after our gasoline output had decreased by 151,000 barrels per day over the prior week.…this week’s gasoline production was 4.2% more than the 9,566,000 barrels of gasoline that were being produced daily over the same week of last year, but 0.8% below our gasoline production of 10,049,000 barrels per day during the week ending May 31st, 2019, ie, during the year before the pandemic impacted gasoline output....on the other hand, our refineries’ production of distillate fuels (diesel fuel and heat oil) decreased by 163,000 barrels per day to 4,984,000 barrels per day, after our distillates output had increased by 267,000 barrels per day over the prior week…but after other recent production increases, our distillates output was still 3.7% more than the 4,807,000 barrels of distillates that were being produced daily during the week ending May 28th of 2021, but 7.8% less that the 5,404,000 barrels of distillates that were being produced daily during the week ending May 31th, 2019...

Even with the big increase in our gasoline production, our supplies of gasoline in storage at the end of the week fell for the sixteenth time in seventeen weeks, decreasing by 711,000 barrels to 218,996,000 barrels during the week ending May 27th, after our gasoline inventories had decreased by 482,000 barrels over the prior week....our gasoline supplies decreased again this week because the amount of gasoline supplied to US users increased by 179,000 barrels per day to 8,977,000 barrels per day, and because our exports of gasoline rose by 289,000 barrels per day to a 3 1/2 year high of 1,063,000 barrels per day, while our imports of gasoline rose by 43,000 barrels per day to 890,000 barrels per day....but even with 15 inventory drawdowns over the past 16 weeks, our gasoline supplies were still only 6.4% lower than last May 28th's gasoline inventories of 233,980,000 barrels, and 9% below the five year average of our gasoline supplies for this time of the year…

With the modest drop in our distillates production, our supplies of distillate fuels decreased for the 15th time in twenty weeks and for the 27th time in thirty-nine weeks, falling by 529,000 barrels to 106,392,000 barrels during the week ending May 27th, after our distillates supplies had increased by 1,657,000 barrels during the prior week….our distillates supplies fell this week because the amount of distillates supplied to US markets, an indicator of our domestic demand, rose by 102,000 barrels per day to 3,969,000 barrels per day, and because our exports of distillates rose by 229,000 barrels per day to 1,353,000 barrels per day, while our imports of distillates rose by 183,000 barrels per day to 263,000 barrels per day....after forty-two inventory withdrawals over the past fifty-nine weeks, our distillate supplies at the end of the week were 19.9% below the 132,802,000 barrels of distillates that we had in storage on May 28th of 2021, and about 24% below the five year average of distillates inventories for this time of the year…

With our exports of crude, gasoline and distillates all remaining high after recently hitting interim highs, i decided to check our total exports of oil and oil products compared to ​historical averges and ​prior week​s​...and while we weren't at a record this week, it turned out that the 4 week average of our total exports of crude oil and petroleum products was at an all time high of 9,826,000 barrels per day, eclipsing the record of 9.750,000 barrels per day set 5 weeks ago...and since it's a record high, we'll include a graph of that so you can see what it looks like...

Meanwhile, despite this week's big release of crude from our Strategic Petroleum Reserve, our commercial supplies of crude oil in storage fell for the 17th time in 27 weeks and for the 33rd time in the past year, decreasing by 5,068,000 barrels over the week, from 419,801,000 barrels on May 20th to 414,733,000 barrels on May 27th, after our commercial crude supplies had decreased by 1,019,000 barrels over the prior week…with this week’s decrease, our commercial crude oil inventories fell to about 15% below the most recent five-year average of crude oil supplies for this time of year, but were still 16.8% above the average of our crude oil stocks as of the last weekend of May over the 5 years at the beginning of the past decade, with the disparity between those comparisons arising because it wasn’t until early 2015 that our oil inventories first topped 400 million barrels....since our crude oil inventories had jumped to record highs during the Covid lockdowns of spring 2020, and then jumped again after last year's winter storm Uri froze off US Gulf Coast refining, our commercial crude oil supplies as of this May 27th were 13.5% less than the 479,270,000 barrels of oil we had in commercial storage on May 28th of 2021, and were also 22.1% less than the 532,345,000 barrels of oil that we had in storage on May 29th of 2020, and 14.1% less than the 483,264,000 barrels of oil we had in commercial storage on May 31st of 2019…

Finally, with our inventories of crude oil and our supplies of all products made from oil remaining near multi year lows, we are also continuing to keep track of the total of all U.S. Stocks of Crude Oil and Petroleum Products, including those in the SPR....the EIA's data shows that the total of our oil and oil product inventories, including those in the Strategic Petroleum Reserve and those held by the oil industry, and thus including everything from gasoline and jet fuel to propane/propylene and residual fuel oil, fell by 4,803,000 barrels this week, from 1,686,064,000 barrels on May 20th to 1,681,261,000 barrels on May 27th, after our total inventories had fallen by 5,315,000 barrels during the prior week....that left our total liquids inventories down by 107,172,000 barrels over the first 19 weeks of this year, and at the lowest since October 24th, 2008, or at a 13 1/2 year low, as you can see on the graph below... 

This Week's Rig Count

The number of drilling rigs running in the US was unchanged during the week ending June 3rd, after falling for the first time in 31 weeks the prior week, and still remains 8.4% below the prepandemic rig count, despite only falling seven times over the past 88 weeks.....Baker Hughes reported that the total count of rotary rigs drilling in the US remained at 727 rigs this past week, which was still 271 more rigs than 456 rigs that were in use as of the June 4th report of 2021, but was also 1,202 fewer rigs than the shale era high of 1,929 drilling rigs that were deployed on November 21st of 2014, a week before OPEC began to flood the global market with oil in an attempt to put US shale out of business….

The number of rigs drilling for oil was unchanged at 574 oil rigs during this week, after rigs targeting oil had decreased by 2 during the prior week, ​while there are still 215 more oil rigs active now than were running a year ago, even as they still amount to just 35.7% of the shale era high of 1609 rigs that were drilling for oil on October 10th, 2014, and as they are still down 16.0% from the prepandemic oil rig count….at the same time, the number of drilling rigs targeting natural gas bearing formations was unchanged at 151 natural gas rigs, which was up by 54 natural gas rigs from the 97 natural gas rigs that were drilling during the same week a year ago, even as they were still only 9.4% of the modern high of 1,606 rigs targeting natural gas that were deployed on September 7th, 2008…in addition to rigs targeting oil and gas, Baker Hughes continues to show two "miscellaneous" rigs active; one is a rig drilling vertically for a well or wells intended to store CO2 emissions in Mercer county North Dakota, and the other is also a vertical rig, drilling 5,000 to 10,000 feet into a formation in Humboldt county Nevada that Baker Hughes doesn't track...a year ago, there were no such "miscellaneous" rigs running...

The offshore rig count in the Gulf of Mexico was unchanged at fifteen rigs this week, with all of this week's Gulf rigs drilling for oil in Louisiana waters....that's two more than the count of offshore rigs that were active in the Gulf a year ago, when all 13 Gulf rigs were drilling for oil offshore from Louisiana…in addition to rigs drilling in the Gulf, we also have an offshore rig drilling in the Cook Inlet of Alaska, where natural gas is being targeted at a depth greater than 15,000 feet, while year ago, there were no offshore rigs other than those deployed in the Gulf of Mexico....and in addition to rigs offshore, we also have a water based directional rig, drilling for oil at a depth between 10,000 and 15,000 feet, inland in the Galveston Bay area, while during the same week of a year ago, there was also one such "inland waters" rig deployed...

The count of active horizontal drilling rigs was unchanged at 666 horizontal rigs this week, which was 251 more rigs than the 415 horizontal rigs that were in use in the US on June 4th of last year, but still 51.5% less than the record 1,374 horizontal rigs that were drilling on November 21st of 2014....at the same time, the directional rig count was unchanged at 36 directional rigs this week, and those were up by 11 from the 25 directional rigs that were operating during the same week a year ago…meanwhile, the vertical rig count was unchanged at 25 vertical rigs this week, while those were up by 9 from the 15 vertical rigs that were in use on June 4th of 2021….

The details on this week’s changes in drilling activity by state and by major shale basin are shown in our screenshot below of that part of the rig count summary pdf from Baker Hughes that gives us those changes…the first table below shows weekly and year over year rig count changes for the major oil & gas producing states, and the table below that shows the weekly and year over year rig count changes for the major US geological oil and gas basins…in both tables, the first column shows the active rig count as of June 3rd, the second column shows the change in the number of working rigs between last week’s count (May 27th) and this week’s (June 3rd) count, the third column shows last week’s May 27th active rig count, the 4th column shows the change between the number of rigs running on Friday and the number running on the Friday before the same weekend of a year ago, and the 5th column shows the number of rigs that were drilling at the end of that reporting week a year ago, which in this week’s case was the 4th of June, 2021...

​as you can see, there weren't many changes in drilling activity again this week...the oil rig pulled out of Oklahoma's Cana Woodford had to have been offset by a​ rig addition elsewhere in the state, since the state total remained unchanged...similarly, the rig removed from the DJ Niobrara chalk of the Rockies front range had to have been offset by a similar addition in either Colorado or Wyoming, ​while in addition, two more rigs were added in Wyoming in a basin or basins that Baker Hughes doesn't track...in like manner, the natural gas rig that was pulled out of the Haynesville shale had to have been offset by a rig addition in the same area, since the rig counts for both northern Louisiana and Texas Oil District 6 were unchanged....Texas did have a rig pulled out of Texas Oil District 8, which is area of the core Permian Delaware, but since the Permian rig count was unchanged, that rig also had to have been removed from a basin that Baker Hughes doesn't track...meanwhile, the North Dakota rig count was down one even though the Williston basin count was unchanged because a rig was added to Williston basin in Montana at the same time, where there are now 3 rigs drilling for oil...

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Ohio Oil and Gas Association Details Utica Players' ESG Achievements in Inaugural Report - Ohio oil and natural gas operators produced 15 times more natural gas in 2018 than in 1990 while slashing carbon dioxide emissions by 37.3 million metric tons, according to the Ohio Oil and Gas Association’s (OOGA) first Community Impact and Sustainability Report OOGA surveyed its member companies on environmental stewardship, community engagement and energy education for the report. Member companies also provided insight on the impact of technological upgrades to reduce emissions. According to the report, OOGA producers fell “well below the .28% goal the OneFuture Coalition set to limit methane emissions from production operations.”Our Nation’s Energy Future, aka ONE Future, comprises companies throughout the natural gas value chain that account for 19% of U.S. production, 56% of pipeline mileage and 40% of natural gas delivered in the United States. The coalition was formed in 2014 with the goal of achieving less than 1% methane emissions intensity across member companies’ operations by 2025. It reportedly accomplished that goal in 2017.In 2021, Ascent Resources Utica Holdings LLC, Ohio’s largest oil and natural gas producer, reduced its methane and greenhouse gas emissions by about 20%.Similarly, Antero Resources Corp., which holds 78,000 net acres across Ohio’s Utica formation, avoided 2,766 metric tons (mt) of carbon dioxide in 2020 by reducing its diesel fuel consumption by 37% with a bi-fuel fleet.Dominion Energy Inc., which supplies 1.2 million Ohioans with natural gas, implemented its Zero Emissions Vacuum and Compression (ZEVAC) units across its pipeline systems to capture and use natural gas, preventing 250,000 mt of methane from entering the atmosphere in OOGA’s sustainability report. The Ohio Oil and Gas Energy Education Program (OOGEEP), a non-profit aimed at educating the public on the daily impact of natural gas and oil, has received more than $23 million from the oil and gas industry since its founding. The OOGEEP has awarded $267,000 in scholarships to students with an interest in the oil and gas industry since 2017.OOGA is a statewide trade association with around 1,300 members from small independent conventional producers, and large independent horizontal operators exploring the Utica Shale formation. The association includes midstream, large-scale transmission line companies, contractors, oilfield service and supply providers, manufacturers, gas utilities and other professional entities.

Signing Bonuses, Royalties, New Leases Pick Up in Ohio Utica - It seems that the higher prices natural gas is fetching are finally translating into higher royalty checks for landowners–at least in the northern part of the Utica Shale in Ohio (likely everywhere). The Youngstown Business Journal spoke to landowners with leased and producing acreage in Columbiana County and found not only have their royalty checks increased, so too has new leasing activity and along with it, new lease bonuses. see: As Oil and Gas Prices Climb, So Do Royalties

Balderson pushing to designate natural gas a green, clean energy - As energy costs are rising, natural gas could help lower costs, according to Licking County's congressman. Rep. Troy Balderson, R-Zanesville, announced at a Pataskala oil and gas well site Wednesday that he had introduced a resolution in the U.S. House of Representatives to designate natural gas as a green and clean energy source. "It is green. It is clean. And it is abundantly right underneath our feet right here in Ohio," he said. George Brown, executive director of the Ohio Oil and Gas Energy Education Program said Ohio has reduced carbon dioxide emissions by 37% over the last decade thanks to the conversion to natural gas electric generation.Balderson, who represents Ohio's 12th U.S. congressional seat, said natural gas will save families money and protects the country's safety and energy independence. "At a time when energy prices across the board are headed upward, consumers need affordability," he said. "Unleashing America’s abundant natural gas is the solution to affordable energy, a cleaner environment and securing American energy independence now."

6 New Shale Well Permits Issued for PA-OH-WV May 23-29 | Marcellus Drilling News - It appears the wind has gone right out of the sails when it comes to issuing new permits for shale drilling in the Marcellus/Utica. For the week of May 23-29, only six new permits were issued. Four of the permits were issued in Pennsylvania, two in West Virginia, and none in Ohio. This is the lowest number in a single week we’ve seen in maybe forever. A measly, lousy six permits!

Unleashing LNG: Pittsburgh region seen as a catalyst for solving European energy woes - In the hours after Russia's invasion of Ukraine in late February, southwestern Pennsylvania's energy leaders gathered for a previously scheduled roundtable. It was, Range Resources Corp. VP Tony Gaudlip told the Washington County Chamber of Commerce audience, not just an issue that was taking place half a world away. If the supply of energy from Russia to Europe was cut off, he said, the United States would be called upon to replace it with domestically produced liquefied natural gas. A portion of the nation's LNG and natural gas liquids production — at least 20% of it — is exported from gas produced in Washington County. "You may not see the link or know the link, but what is right below our feet is going to help that region," Gaudlip predicted. The four months since Gaudlip's forecast has only strengthened the argument. Two years ago the natural gas industry was on its heels with rock-bottom commodity prices, a sharp decline in demand, declining drilling, wells shut and a falloff in Wall Street favor. It was on the defensive about its role in climate change and how it could survive in a low-carbon future. But now, with natural gas prices quadrupling amid a supply shortage plus concerns about energy security with a seemingly endless war in Ukraine, the idea of ramping up natural gas production in the United States to protect freedom overseas has gained traction. And with it, the Marcellus and Utica shales could play a huge role. Liquefied natural gas (LNG) is a form of natural gas that has been cooled to an extreme temperature (260 degrees below zero Fahrenheit), through which about 600 times more LNG can be stored compared to traditional natural gas. The product is shipped by huge oceangoing tankers all over the world. No matter where it ends up, LNG is heated and then converted back to natural gas.LNG exports have long been seen as a potential expanding market for domestic natural gas producers, but up until recently it’s been more of an aspiration than reality. The LNG export market has traditionally been dominated by other players, including Qatar and Saudi Arabia.But the shale revolution has allowed the U.S. to go from an LNG importer to an exporter. Over the past two years, aided by new processing and export terminals, primarily in the Gulf Coast, U.S. LNG exports have been soaring: Exports grew from 3 billion cubic feet per day less than two years ago to 13 billion cubic feet per day in 2022, according to data from the U.S. Energy Information Administration.In late March, the Biden administration authorized additional exports of LNG from facilities along the Gulf Coast, amounting to 0.72 billion cubic feet per day of additional exports. It will help wean Europe off Russian natural gas, but it's only the tip of the iceberg: Under an agreement with the European Union, U.S. LNG will top 50 billion cubic meters per year by 2030.But natural gas producers say that isn't half of what's needed to guarantee energy security for the U.S. and its allies in an energy picture that looks different than even on New Year's Day."This is not something you can flip a switch and fix overnight," said Anne Bradbury, CEO of the American Exploration and Production Council, a group of natural gas drillers. "But there are a certain number of things this administration can and should be doing to support our allies in Europe and around the globe."

Pottstown explosion: At least 5 people killed in house explosion in Pennsylvania - -At least five people were killed, including four children, and two others were taken to area hospitals when a house exploded in Pottstown, Pennsylvania, Thursday evening, CBS Philadelphia reports. Crews are still spraying the home with water as neighbors try to pick up the pieces, the station reported Friday. The victims were identified as Francine White, 67; Alana Wood, 13; Jeremiah White, 12; Nehemiah White, 10; and Tristan White, 8. Eugene White, 44, and Kristina Matuzsan, 32, were injured and remain in critical condition at nearby hospitals, police said in a press release Friday afternoon.Everyone who was in the home has been accounted for, police said.Three homes were destroyed in the explosion, according to CBS Philly. The blast sent debris, including dry wall, into neighboring yards, CBS Philly's Kerri Corrado reports.A man who lives nearby heard a loud bang and felt the impact."I was in my room chilling," Kaleef Blackwood told CBS Philly. "I was upstairs and the next thing you know I just heard a big boom like a bomb went off or something. It just shook the whole house."The town's schools will be closed Friday.Montgomery County officials believe a gas explosion started the fire, CBS Philly reports. Authorities are still at the scene and investigating the incident.

PECO: No gas service at Pottstown explosion site— The question which hangs over the tragic explosion at two homes on Hale Street Thursday continues to be top of mind: “What caused it?” Social media posts have been relentless at speculating about the cause. We have at least been able to disprove the theory that it was caused by a plane crashing into the home, which got some early traction as facts were still being gathered. But given the size and power of the explosion, and the presence of so many PECO workers Thursday night into Friday, many have begun to ask aloud whether it could have been caused by natural gas. Many area residents told journalists over the past two days there have been many occasions during which they smelled gas and called to report it. During a press conference Friday, borough officials could not answer questions about the frequency of gas odor reports. However, PECO issued a statement about 7 p.m. Friday. “There has been speculation about the cause of this explosion; however, this investigation is still ongoing. The following details confirm PECO’s involvement and support in the ongoing investigation of this incident:“Shortly after 8 p.m. on May 26, PECO was notified by the Fire Department of a reported explosion on Hale Street in Pottstown. PECO crews responded and worked to shut off natural gas and electric service to secure the area and ensure the safety of first responders and residents. Currently, 10 customers remain without electric service. Additional Key Facts:

• • No Natural Gas Service at the Impacted Properties: There is no record of natural gas service at the affected addresses of 453/455 Hale Street, which sustained significant damage in the event. To clarify, these properties were not PECO natural gas customers. The Pottstown Fire Department reported that a propane tank was present at one of the impacted properties. Both propane and natural gas utilize odorants to help people identify a potential leak.
• • Nearby Natural Gas Mains: While these properties were not served by PECO natural gas, there are natural gas mains in the vicinity of the home and natural gas service is provided to nearby customers.
• • PECO’s Current Investigation Work: PECO crews are currently on-site supporting the investigation. This work includes inspections of natural gas mains, service lines leading to properties and natural gas meters. Customer-owned appliances and piping may also be investigated. Area inspections will encompass homes and natural gas equipment in a wide area to ensure there is no additional damage.

Pottstown explosion not caused by meth lab fire chief says, possible propane or natural gas sources under scrutiny — Officials in charge of the investigation into the Hale Street home explosion that killed five people last Thursday are not yet ready to say what the cause was, but they will say what it wasn’t.It was not a methamphetamine lab, as has been speculated relentlessly on social media and elsewhere.Standing at the explosion site Wednesday morning, Pottstown Fire Chief Frank Hand said the lead agency in the investigation is the federal Bureau of Alcohol, Tobacco and Firearms. “They’ve narrowed it down but one thing we do know is it was not a meth lab, that has been ruled out,” he said. At about the same time Hand was speaking with MediaNews Group, PECO Energy, which supplies natural gas to the neighborhood, released a statement largely similar to the one released on Friday, stating the homes that exploded were not PECO natural gas customers. The statement released Wednesday, merely adds “our investigation continues, and to date, we have not found evidence that PECO’s natural gas caused this incident. To be clear, the investigations are ongoing, and we have not been advised of any final determinations by investigating authorities.”

GAO report questions Northeast oil, gas reserves — A new review of the federal government’s heating oil and gas reserves for the Northeast shows they hold only enough for two days’ worth of consumption. The U.S General Accountability Office said in a report on Wednesday that the region’s reserves, which total 2 million barrels, were established to reduce the impact of severe supply disruptions. “We found the current reserves are not well suited to this task,” the GAO said. “They have only been used once to date, after Hurricane Sandy in 2012, and hold less than 2 days’ worth of consumption in the Northeast.” To put the 2 million barrels in context, the GAO noted that the U.S. Department of Energy maintains a reserve of 565 million barrels of crude oil, enough for more than 30 days of national crude oil consumption. The accountability office also raised questions about the ability to tap reserves quickly and concluded that the energy department has not fully considered future risks to regional petroleum product supplies, including risks posed by storms, noting that such supplies are commingled in tanks with commercial supplies. “State officials we interviewed also highlighted power outages as an impediment to accessing existing fuel supplies during some emergencies,” according to the GAO report. “For example, Hurricane Sandy-related power outages shut down many gas stations. After this experience, New York State passed a law requiring some gas stations to install a transfer switch so that a back-up generator can be used in the event of an emergency.”

Biden's EPA aims to erase Trump-era rule keeping states from blocking energy projects - The Biden administration on Thursday proposed undoing a Trump-era rule that limited the power of states and Indigenous American tribes to block energy projects like natural gas pipelines based on their potential to pollute rivers and streams.The Clean Water Act allows states and tribes to review what effect pipelines, dams and other federally regulated projects might have on water quality within their borders.The Trump administration sought to streamline fossil fuel development and made it harder for local officials to block projects.The Biden administration’s proposed rule would shift power back to states, tribes and territories.The administrator of the Environmental Protection Agency (EPA), Michael Regan, said the draft regulation would empower local entities to protect water bodies “while supporting much-needed infrastructure projects that create jobs”.The Trump-era rule required local regulators to focus reviews on pollution projects might discharge into rivers, streams and wetlands. It also rigidly enforced a one-year deadline for regulators to make permitting decisions. Some states lost authority to block projects based on allegations they missed the deadline.Now, the EPA says states should have the authority to look beyond pollution discharged into waterways and “holistically evaluate” impacts on local water quality. The proposal would also give local regulators more power to ensure they have the information they need before facing deadline pressure over a permit.The public will have an opportunity to weigh in on the EPA proposal. The final rule isn’t expected to take effect until spring 2023. The Trump-era rule remains in effect.

NYMEX natural gas futures tumble amid bearish weather, production data - NYMEX front-month natural gas futures May 31 picked up where they left off before the long holiday weekend by tumbling to start the abbreviated trading week. At the end of trading, the NYMEX July 2022 gas futures contract lost 58.2 cents to close at $8.145/MMBtu. The downside action in prices stemmed from a bearish June temperature outlook according to one of the alternative weather forecast models, as well as dry gas production that inched higher in recent days, testing the 96 Bcf/d area. While the two major weather forecast models, the Global Forecast System (GFS) and the European (ECMWF) models, continue to show a relatively neutral to slightly bullish outlook for the lower 48 states over the course of June, the Coupled Forecast System model version 2 (CFSv2) is depicting a notably cooler forecast for the month. Even though the CFSv2 isn't ranked as high as the GFS and ECMWF models in terms of industry standard usage, the CFSv2 does have a history of scoring coups against the major models in recent years. The most recent runs of the CFSv2 are showing a warm bias for the Southwest region of the US, while the rest of the nation, including the Northwest, the Great Plains (including Texas), and the near entirety of the remaining eastern third of the US is forecast to be quite cool by June standards. Only time will tell if this outlook verifies, but if the CFSv2 model is correct, much of the nation may be able to dodge an energy shortage bullet and would allow the gas storage deficit to be more quickly eaten away in the weeks ahead. From the fundamental supply/demand perspective, lower 48 dry production levels are measuring between 95 Bcf/d and 96 Bcf/d for the final gas day of May, which is down by about 460 MMcf from the previous day. Texas and the Northeast regions are each down about 120 MMcf, while the Midcontinent, Southeast and Western regions are respectively down 82 MMcf, 66 MMcf, and 67 MMcf for May 31. On the demand side of the spectrum, modestly above-average temperatures will remain around for another day or so, with lower 48 mercury levels averaging above 70 degrees. These conditions will remain steady for much of the week as climatological or seasonal historical averages edge higher. Demand levels for the first couple of days of June are estimated at more than 62 Bcf/d but then will ease to 60.5 Bcf/d over the latter part of the week. LNG feedgas was under 12 Bcf/d due to lower processed volumes at Sabine Pass.

Natural Gas Futures Pare Losses Early as Production Readings Dip -A dip in the latest production estimates helped natural gas futures pare their losses in early trading Wednesday, while technical factors also pointed to potential upside for prices. After a 58.2-cent sell-off in Tuesday’s session, the July Nymex contract was up 13.2 cents to $8.277/MMBtu at around 8:55 a.m. ET.Production estimates early Wednesday were showing “phantom” declines typical of the first-of-the-month, according to EBW Analytics Group.The “raw figures” were “suggesting a day/day supply loss of 2.0-2.5 Bcf/d,” EBW senior analyst Eli Rubin said. “Most of the losses are likely due to intra-month pipeline nomination patterns rather than physical changes, but lower supply readings may help natural gas establish firmer support in the coming days.”From a seasonal perspective, the outlook for natural gas “remains strong,” suggesting a “sharp turn higher is possible,” according to Rubin. However, “deeper price consolidation is likely first.”In terms of the storage outlook, it’s possible weekly injections already peaked at 89 Bcf, which would make this the first summer without a triple-digit build in six years, Energy Aspects said in a recent note.This comes as pricing along the summer strip has been “failing to provide injection incentives,” according to the firm. The market is “seeking industrial price triggers as structural demand growth is hard to reverse.” Three estimates submitted to Bloomberg as of early Wednesday for this week’s Energy Information Administration (EIA) storage report showed injection expectations from 79 Bcf up to 91 Bcf.The five-year average build for the week ended May 27 is a 100 Bcf injection, which also matches the year-earlier build, EIA data show.

Natural Gas Futures Bounce Back, while Strong Power Burns Keep Upward Pressure on Cash A large decline in production fueled a rebound in natural gas futures midweek, with lower wind generation providing additional market support. The July Nymex contract settled Wednesday at $8.696/MMBtu, up an astounding 55.1 cents on the day. August futures climbed 54.8 cents to $8.686. Spot gas prices also rallied on robust power burns, with NGI’s Spot Gas National Avg. up 9.5 cents to $8.200. After coming within an earshot of late 2021 highs after the Memorial Day holiday, production on Wednesday took a nosedive. Though first-of-the-month declines are common, traders took notice of the roughly 2 Bcf day/day drop in output. Bloomberg data showed big production drops in several regions. The Haynesville was down more than 5% day/day, while the Midcontinent was down around 3.5%. Appalachia and Rockies output also fell around 3%. Total output was seen at around 94.5 Bcf on Wednesday, off about 2.4 Bcf day/day. Even with expectations that production could get revised higher rather quickly, there are other factors that may have influenced pricing midweek. Wind generation, for example, fell from holiday weekend highs and was seen falling even lower as the week progresses. This drop in wind generation – which likely equates to at least some pickup in natural gas demand – drove increases in the cash market midweek and could help send futures back above $9.000 over the next week or two if current wind forecasts pan out, according to Bespoke Weather Services. However, the firm noted that the next round of government inventory data may take priority in the near term, with the market on watch for signs of continued tightness in the market following last week’s bullish surprise. Ahead of the report, analysts were looking for an injection in the 80s Bcf. A Wall Street Journal poll produced estimates ranging from 73 Bcf to 92 Bcf, with an average build of 84 Bcf. A Bloomberg survey had a tighter range of projections and landed at a median injection of 86 Bcf. Reuters polled 14 analysts, whose estimates ranged from injections of 76 Bcf to 93 Bcf, with a median increase of 87 Bcf. Last year, 100 Bcf was added into storage during the similar week, while the five-year average injection also is 100 Bcf. Energy Aspects pointed out that with heat building, particularly in the southern United States, the market may have already seen its peak injection for the season at 89 Bcf. If that proves to be the case, it would mark the first summer without a triple-digit build in six years. Rising exports amid growing summer demand in Asia and an ongoing urgency to replace Russian gas supply in Europe mean the market has few levers to pull to refill stocks.

U.S. natgas slips 2% on big storage build, lower demand forecast (Reuters) - U.S. natural gas futures slid about 2% on Thursday on a slightly bigger than expected storage build and forecasts for lower demand next week than previously expected. Earlier in the day, the contract was up about 3% and on track to close at a 13-year high due to a drop in output in recent days, an increase in the amount of gas flowing to liquefied natural gas (LNG) export plants and record power demand in Texas. Power use in Texas reached the highest level on record for the month of May on Tuesday and will likely break the grid's all-time high early next week, as economic growth boosts overall usage and hot weather causes homes and businesses to crank up their air conditioners. The U.S. Energy Information Administration (EIA) said utilities added 90 billion cubic feet (bcf) of gas to storage during the week ended May 27. That compares with the 86 bcf build analysts forecast in a Reuters poll. It also compares with an increase of 100 bcf in the same week last year, and with a five-year (2017-2021) average increase of 100 bcf. Traders said the build was smaller than usual because power generators burned more gas last week to produce electricity due to high coal prices and a lack of wind power. After dropping about 7% on Tuesday and rising about 7% on Wednesday, front-month gas futures for July delivery fell 21.1 cents, or 2.4%, to settle at $8.485 per million British thermal units (mmBtu). The contract closed at $8.8971 on May 25, its highest settle since August 2008. U.S. gas futures are up about 127% so far this year, as much higher prices in Europe and Asia keep demand for U.S. liquefied natural gas (LNG) exports strong, especially since Russia's Feb. 24 invasion of Ukraine stoked fears that Moscow might cut gas supplies to Europe. Gas was trading around $27 per mmBtu in Europe and $24 in Asia. Data provider Refinitiv said average gas output in the U.S. Lower 48 states fell to 94.5 billion cubic feet per day (bcfd) so far in June from 95.1 bcfd in May. That compares with a monthly record of 96.1 bcfd in December 2021. Refinitiv projected average U.S. gas demand, including exports, would rise from 85.1 bcfd this week to 85.9 bcfd next week. The forecast for this week was higher than Refinitiv's outlook on Wednesday, while the forecast for next week was lower. The average amount of gas flowing to U.S. LNG export plants rose to 12.7 bcfd so far in June from 12.5 bcfd in May. That compares with a monthly record of 12.9 bcfd in March. The United States can turn about 13.6 bcfd of gas into LNG.

Natural Gas Futures Take Breather, but Highs Could Be Tested Again Soon -- Natural gas futures price action quieted down a bit Friday, no doubt with traders’ heads still spinning from the prior day’s wild swings. The July Nymex gas futures contract settled 3.8 cents higher to end the week, at $8.523/MMBtu. August futures picked up 3.6 cents to reach $8.510. Spot gas prices retreated after several days in the green, with a moderate outlook for the three-day period through Monday. NGI’s Spot Gas National Avg. plunged 48.0 cents to $7.895. With weather models trending slightly cooler for next week, it appears that Friday’s modest price rally was likely inspired by the ongoing digestion of the latest storage data. The Energy Information Administration’s (EIA) 90 Bcf injection initially was viewed as bearish versus expectations and helped send futures tumbling on Thursday, but Bespoke Weather Services said the data “was not really bearish when stepping back and looking at the big picture.” After all, supply/demand balances are still tighter than they need to be for the market to have “any true sense of comfort,” according to Bespoke. Furthermore, the weather pattern looks set to move materially hotter around the middle of the month, with gas-weighted degree days moving above normal by around June 13. Although wind output is expected to rise from recent lows, it should remain off the peaks seen in April and May. “In our view, we would not be shocked to see prices test the highs again” over the next week, Bespoke said. Mobius Risk Group agreed the storage situation remains precarious. Regionally, there were notable storage deficit expansions observed in the West and South Central. The Pacific and Mountain regions posted a cumulative build of 9 Bcf, which is 9 Bcf lower than the same week last year. Additionally, this was the ninth straight week in which there has been an increase in the year/year storage deficit, Mobius said. In the South Central region, the weekly inventory report showed almost no change to the year/year storage deficit, which now sits at just over 140 Bcf. Notably, Thursday’s 20 Bcf net injection was inclusive of a 3 Bcf salt withdrawal. “In order to have an adequate pre-winter inventory level, there will be a dire need to refill salt storage, which thus far is not occurring at a substantial rate,” Mobius said. The Schork Group analyst team said “the future is now” for injections. They noted that the month of May is typically when the market sees the largest injection of the year. Storage builds then start to fall in June when air-conditioning demand begins to ramp up in the northern states and ease further as heat intensifies in July and August. Looking ahead to the next EIA report, early estimates are pointing to a build in the high 90s or even low triple-digits. Assuming this stock increase comes to fruition, the cumulative injection for the month of May would be spot on the 30-year mean of 381 Bcf, according to The Schork Group.

Drought Adds To Pressure On US Gas Inventories -- U.S. gas prices have climbed to the highest for more than 13 years as inventories remain well below average while the drought and lack of hydro generation threatens to stretch them even further. Front-month futures prices for gas delivered at Henry Hub in Louisiana have climbed to around $9 per million British thermal units, up from $3 at the same point a year ago. Prices are the highest after adjusting for inflation since October 2008, when the financial crisis was intensifying and the economy was heading deeper into the great recession. In real terms, front-month prices are in the 86th percentile for all months since 1990, signalling the need for significant steps to relieve the gas shortage.Last week, working stocks in underground storage were 348 billion cubic feet (16%) below the pre-pandemic five-year seasonal average (“Weekly natural gas storage report”, Energy Information Administration, May 26).Inventories increased by just 430 bcf between April 1 and May 20, below the pre-pandemic seasonal average of 461 bcf, so the storage deficit is increasing rather than reducing. The result is that the one-year calendar spread has moved into a record backwardation of almost $4 per million British thermal units as traders anticipate stocks will remain tight. High prices signal the need to reduce consumption, including by switching from gas-fired to coal-fired generation as much as possible, while maximising drilling and production. The total number of rigs drilling for gas has climbed to 150, the highest since late 2019, and up from just 100 this time a year ago, according to field services company Baker Hughes. The number of oil rigs, which produce associated gas as a by-product, has climbed to 576, up from 343 a year ago, and the highest since just before the first wave of the pandemic arrived in early 2020.Increased drilling should ensure gas production continues increasing throughout the rest of this year and into the first quarter of 2023.But the last two months have been hotter-than-normal for the time of year boosting air-conditioning and refrigeration demand. The Lower 48 states have experienced a total of 171 population-weighted cooling degree days so far this year compared with a long-term seasonal average of 124.At the same time, the worsening drought across the western states is cutting power generation from hydro-electric sources and increasing reliance on gas-fired generators. In California, drought could cut hydro to just 8% of total generation, from a median of 15% in recent years, according to the EIA.Increased gas-fired generation is likely to make up around half the shortfall (“Drought effects on California electricity generation and western power markets”, EIA, May 2022).Large volumes of gas will also continue to be exported in the form of LNG to Europe and Asia to cover high demand in those regions, especially for alternatives to Russian gas, tightening the market further.Traders expect the market to remain tight, with exceptionally high prices signalling the need for even more drilling and running non-gas generation units for as many hours as possible this summer.

BSEE conducts unannounced oil spill response inspections in Gulf - As part of its mission to ensure that oil and gas companies are prepared to respond quickly and effectively to an offshore oil spill, the Bureau of Safety and Environmental Enforcement held a Government Initiated Unannounced Exercise (GIUE) on May 24, and an equipment deployment June 1, to assess an operator's ability to activate its Incident Management Team in Houston and carry out the procedures described in its approved oil spill response plan. “One of BSEE’s top priorities is to ensure oil and gas companies can respond to offshore oil spills effectively and as quickly as possible,” Eric Miller, chief BSEE Oil Spill Preparedness Division, said in a statement announcing the exercise. “BSEE conducts unannounced exercises on a regular basis to evaluate an operator’s oil spill response plan and gauge their ability to successfully accomplish objectives with a hypothetical oil spill scenario.” The exercise required the operator, Equinor USA E&P Inc., to respond to a simulated discharge of oil resulting from exploration drilling activity in Walker Ridge block 316, about 167 miles off the Louisiana coast. The scenario began with the operator receiving information from the drillship indicating they were having trouble preventing a blow-out from occurring at the well. About an hour after the exercise was initiated, a BSEE controller provided the operator additional information indicating that an uncontrolled discharge of oil was observed on the water below the drillship. Except for regulatory notifications, all response actions were simulated during the exercise. The company was evaluated on its capacity to promptly mobilize a workforce and effectively organize a response. The company had to simulate an oil slick trajectory and develop a plan to secure the source of the spill to meet certain objectives for the exercise. Additionally, BSEE evaluated the operator’s Dispersant Use Plan, drafted by the operator during the exercise, to determine if it included updated monitoring requirements that were officially incorporated into the National Oil and Hazardous Substances Pollution Contingency Plan in January 2022.

The Oil Industry’s Downstream Nightmare Is Here To Stay - Last week, Bloomberg reported, citing anonymous sources, that the Biden administration was looking into the possibility of restarting idled refineries in order to boost fuel production and tame prices. Meanwhile, operating refineries are running at utilization rates of over 90 percent, which, according to industry insiders, is an unsustainable rate. And come hurricane season, if there is refinery damage, things could get really ugly with the fuel supply situation.Welcome to the downstream nightmare of the energy world.The United States has lost around 1 million bpd in refining capacity since 2020, according to a Reuters report that also cited one analyst, Paul Sankey, as saying this meant the country is in what is effectively a structural shortage of such capacity. Globally, refining capacity has shrunk by over 2 million bpd since 2020.According to the International Energy Agency, this is not a problem at all. The IEA estimated that global refining capacity shed 730,000 bpd last year and that, this year, refinery runs would be about 1.3 million bpd lower globally than what they were in 2019. The reason that would be no problem for the IEA is that demand for oil is seen as 1.1 million bpd lower than what it was in 2019.Not everyone is so calm, however, especially in the United States, where retail fuel prices are breaking records while refiners convert their refineries to biofuels production plants.“It’s hard to see that refinery utilization can increase much,” Gary Simmons, chief commercial officer of Valero, told Reuters. “We’ve been at this 93% utilization; generally, you can’t sustain it for long periods of time.”Interestingly enough, despite the imbalance in supply and demand, which has pushed the crack spreads to the highest in years, refiners do not seem to be planning new capacity additions. .“Investors do not want to see companies pouring money into organic oil and gas growth,” In addition to this, building a new refinery is a lengthy and expensive endeavor that few refiners appear to believe is justified despite the record crack spreads. At the same time, demand for refined products remains strong: U.S. fuel exports are running at record rates, a lot of them going to Europe, which, like the U.S., reduced its refining capacity over the last two years but now needs new sources of oil products after it embarked on an emergency course to cut its dependence on Russian oil and fuels.Speaking of Russia, sanctions have resulted in a substantial reduction of refining capacity, with Reuters estimating as much as 30 percent idled, with some 1.2 million bpd in capacity likely to remain offline until the end of the year, according to JP Morgan.Meanwhile, in Asia and the Middle East, refining capacity has been on the rise. In Asia, the new additions have topped 1 million bpd, according to a Bloomberg chart, while in the Middle East, new refining capacity since 2019 has reached about half a million barrels daily.The balance of refining capacity, then, has not just changed but also shifted geographically. The U.S. two weeks ago exported 6 million bpd in refined petroleum products. After the EU approved an embargo on Russian crude and products, albeit “in principle” for now, chances are that demand for imports from the U.S. will rise further, straining U.S. refiners even more.Then it will be time for hurricane season, and even if the Gulf Coast gets lucky this year, refinery closures in anticipation of storms making landfall are pretty much guaranteed, based on what we have seen in the past. This does not bode well for fuel prices, which have become a major issue for governments on both sides of the Atlantic. There is a certain sense of irony in that one, although by no means the only, reason for the capacity imbalance is investors’ focus shift from oil and gas to alternative energy sources.

New Map Shows More People Live within Oil and Gas Threat Radius- -A newly created map reveals more Americans are being exposed to health threats from proximity to oil-and-gas production facilities. The map's release Tuesday comes ahead of new industry safeguards expected from the Environmental Protection Agency. Map co-creator Alan Septoff with the group Earthworks said more than 144,000 New Mexicans live within a "threat radius" of an oil or gas facility - defined as being a half-mile. Since the group's first nationwide analysis in 2017, Septoff said, millions more people have been added to the threat radius map."Seventeen-point-three million people live within the threat radius - up 4.7 million from five years ago," he said. "Almost 4 million kids under 18 live within the threat radius; 3.2 million students go to school at 12,400 schools."New safeguards being considered by the EPA would reduce greenhouse-gas emissions and associated toxic air pollution from new and existing oil-and-gas facilities and address routine flaring. The gases from extraction are known to increase rates of cancer, asthma and other diseases. Earthworks' Andrew Klooster is an optical gas imaging thermographer based in Colorado, a state with some of the strongest regulations in the country. Nonetheless, he said, what's written on paper and what's happening on the ground do not align - because the state doesn't have the capacity to enforce its regulations."In all the states that we work, whether it's Colorado or Texas," he said, "sites are not being inspected frequently enough and regulations are not being enforced as forcefully as they should be."Despite a new reporting program implemented by the New Mexico Oil Conservation Division, quarterly reports show 262 operators did not file information about how much natural gas was lost to venting and flaring. Klooster said that's why new oil-and-gas development is making the problem worse. "The industry, by and large, is still policing itself when it comes to air-quality violations," he said, "and there's a presumption on the part of regulators that they're voluntarily complying with most of the rules that have been adopted. The result of this presumption is pollution that continues to harm communities in all of the states that we work."

To understand the orphan well problem in NM, someone’s going to have to count them - The 50-square-mile stretch of public land known as Glade Run is described on the Bureau of Land Management’s website as a “great spot for the weekend warrior.” Glade Run is punctured by 600 oil and gas wells, connected by hundreds of access roads and an arterial network of buried gathering lines that leave unvegetated, eroded scars on the land. It’s not far from Mike Eisenfeld’s home. He’s the energy and climate program manager for the San Juan Citizens Alliance. He lives in Farmington, N.M, an agricultural community transformed into a center of oil and gas production.“You should be reclaiming and revegetating well pads and pipeline right of ways,” Eisenfeld said, driving past a cleared well pad, his voice sputtering as his truck traversed the washboard roads that have become a popular off-roading venue for locals. “And cleaning up the mess you have created.”The U.S. Senate passed the bipartisan infrastructure package last year with nearly $44 million to plug and reclaim orphaned oil and gas wells in New Mexico. The first round of funding is part of a nationwide push to address growing concerns over abandoned wells’ environmental and health impacts — particularly the release of the potent greenhouse gas methane.“Orphan wells are an enormous source of methane, a greenhouse gas that is 86 times more potent than CO2,” wrote Sen. Martin Heinrich in an emailed statement to Source New Mexico. “These emissions have devastating impacts on our climate and the health of our communities.” While many have lauded the move to identify and plug orphan wells, the true scope of the problem in New Mexico is still poorly understood. On federal lands in New Mexico — where the majority of oil and gas extraction takes place — the number of orphan wells is still unknown. The Bureau of Land Management leases oil and gas permits on such land. Through the agency’s process of reviewing records and inspecting wells deemed high-priority, BLM has not identified any on federal lands in the largest oil and gas region in the state, according to a spokesperson. “BLM New Mexico is not aware of any federally managed orphaned wells residing under its administration within the state of New Mexico,” wrote BLM’s Allison Sandoval in an email to Source New Mexico. Eisenfeld said this is dubious, and that there are likely many on BLM land. Logan Glassenap, a staff attorney for the New Mexico Wilderness Alliance, agrees.“We know there is a problem. We don’t know its scope,” he said. In March, the alliance wrote a letter to BLM requesting an audit of all inactive oil and gas wells.

Settlement jeopardizes nearly all Trump-era oil and gas leases in Wyoming - The Biden administration will redo the environmental review of more than 2,000 Wyoming oil and gas leases sold between 2015 and 2020 — including virtually all of the leases issued under former president Donald Trump — in accordance with atrio of settlement agreements approved Wednesday by a federal judge.None of the leases have been vacated, but their future is uncertain. The Department of the Interior now has to reevaluate and retroactively justify more than two dozen lease sales. If it decides it can’t, or its reasoning doesn’t satisfy the court, the sales could be reversed and any existing permits revoked.Jeremy Nichols, climate and energy program director for plaintiff WildEarth Guardians, said the decision was unprecedented.“This is getting to the heart of the federal oil and gas program,” Nichols said. “The question here will be not whether it’s OK to lease in the Red Desert or the Powder River Basin, but whether the federal oil and gas program even makes sense in the midst of the climate crisis.”Industry responded by asking Congress to play a greater role in decisions affecting the energy sector. “Backroom court settlements like this, negotiated by the Biden Administration and its anti-domestic oil and gas allies, will continue to decide the fate of Wyoming’s primary economic driver until Congress reasserts its control and establishes a coherent national energy policy,” Ryan McConnaughey, communications director for the Petroleum Association of Wyoming, said in an emailed statement.WildEarth Guardians and several other environmental groups filed three lawsuits against the interior department, in 2016, 2020 and 2021, challenging the climate analysis for a total of nearly 4 million acres leased for oil and gas development across Wyoming, Colorado, Montana, New Mexico and Utah.Close to 2.5 million of those leased acres — more than 3,500 square miles — are located in Wyoming.U.S. District Judge Rudolph Contreras ordered the department in 2019 to reassess some of the Wyoming leases. A year and a half later, he declared the agency’s second attempt inadequate.Around the same time, the interior department acknowledged “the same sort of deficiencies” in subsequent sales’ climate analyses, said Kyle Tisdel, senior attorney and climate and energy program director for the Western Environmental Law Center, another plaintiff.If the agency wants future lease sales to hold up in court, Tisdel said, its climate analysis will have to meet the higher bar the cases have established. Federal attorneys have cited Contreras’ decisions and other, similar rulings to explain why it took the Biden administration more than a year to complete the review process for its first round of onshore lease sales.

Undoing Trump, EPA to empower states and tribes to oppose pipelines - The Environmental Protection Agency announced on Thursday it would seek to return authority to states to oppose gas pipelines, coal terminals and other projects that pose a threat to lakes, rivers and streams — reversing a major Trump administration rule. For half a century, states under the Clean Water Act had broad authority to alter or even block many energy projects and other infrastructure that threatened to pollute or harm waterways within their borders. But in 2020, President Donald Trump issued a regulation reining in that power. Now, the EPA is seeking to restore states’ authority, making it easier for local officials, including Native American tribes, to scrutinize proposals to build many highways, hydroelectric dams, shopping malls, housing developments and even wineries and breweries.“For 50 years, the Clean Water Act has protected water resources that are essential to thriving communities, vibrant ecosystems, and sustainable economic growth,” EPA Administrator Michael Regan said in a statement. “EPA’s proposed rule builds on this foundation.”Although the proposed rule does not explicitly target fossil-fuel infrastructure, Democrats may seek to invoke it to reduce emissions contributing to global warming. New York, for instance, once used its power under the Clean Water Act to nix a gas pipeline that it said was “inconsistent” with the state’s climate goals.Under the Clean Water Act, the federal government cannot issue a permit for projects that may harm protected waterways without getting permission from states, territories or tribes. The new rule will give local officials more time and leeway when making those decisions.The agency officials will take public comment on the proposal over the next 60 days, with plans to revise and finalize the rule after getting that feedback by the spring of next year.

Companies pull out of drilling leases at Arctic Wildlife Refuge -Companies are backing out of controversial plans to drill in the Arctic National Wildlife Refuge, which is home to a number of animal species.A company called Regenerate Alaska, which leased more than 23,000 acres in the refuge’s coastal plain at an auction held by the Trump administration last year, has since asked to have the lease rescinded, according to an Interior Department spokesperson. The spokesperson said Thursday that the Bureau of Land Management last month rescinded and canceled the lease, and the Office of Natural Resources Revenue refunded the company’s bonus bid and first year rentals. The sale last year, in which Regenerate had won its lease, earned much less than its Republican proponents had predicted. The Biden administration has suspended leases at the refuge as it takes a second look at the Trump-era decision to open it up. A Chevron spokesperson also confirmed Thursday that earlier this year the company pulled out of a lease on land owned by an Alaska Native corporation inside the refuge. “Chevron’s decision to formally relinquish its legacy lease position was driven by the goal of prioritizing and focusing our exploration capital in a disciplined manner in the context of our entire portfolio of opportunities,” said company spokesperson Deena McMullen.The Anchorage Daily News, which first reported the cancellations, also reported that Hilcorp Energy Company also pulled out of a lease on land owned by the Alaska Native corporation. Leasing at the refuge is controversial because it is home to grizzly bears, polar bears, gray wolves and more than 200 species of birds. It also contains land considered sacred by the Gwich’in people.

These Public Oil Companies Are Joining Forces With Bitcoin-Miners To Reshape The Industry - In the news media and general discourse, the focus on partnerships between miners and oil companies has primarily centered on North America. Most of this attention is being paid here for good reason as several of the biggest names in the oil industry are working with North American miners.In 2021, ExxonMobil reported annual revenue of more than $285 billion with global daily production during the same period reaching more than two million barrels per day of oil and gas. This titan of the oil industry is also reportedly working with a bitcoin mining company in North Dakota to turn otherwise wasted gas into energy for mining operations. This news spread like wildfire through the Bitcoin community when it was first published, but some off-grid mining teams already knew of Exxon’s relationships with miners. In August 2021, for example, Giga Energy co-founder Matt Lohstroh said Exxon was already selling some gas to miners.But as the premise of this article suggests, Exxon is far from the only oil company dealing with miners.

• ConocoPhillips is also supplying gas to bitcoin miners, which has been widely reported by various mainstream media outlets, including CNBC and Bloomberg.
• Marathon Oil, a multi-billion-dollar oil company based in Houston, also powers co-located bitcoin mining operations with its gas. On its website’s page about emissions control, Marathon indicates it uses gas “that would otherwise be flared due to lack of a gas connection or gas takeaway capacity constraints [to] generate electricity to power co-located computing and data centers used for Bitcoin mining.”
• EOG Resources, another American oil company, is also rumored to be dealing with miners by members of the industry, although official deals have not yet been reported.
• And Texas Pacific Land recently signed a deal with two mining companies, Mawson and JAI Energy, to begin what JAI Energy co-founder Ryan Leachman called “the biggest bitcoin related announcement in oil and gas to date.”

US Nat Gas Prices Have Exploded Thanks To Soaring LNG Exports To Europe - Regular readers will be aware of our view regarding the soaring US nat gas price, which we have repeatedly said is to a large extent a function of US nat gas exports to Europe, meant to ease Europe's historic natgas shortage which is the direct result of the Ukraine war (as Putin turns the screws on European nat gas exports) and Europe's disastrous "green" policies which virtually assured that the continent would have a historic energy crisis. Indeed, as we noted a few days ago in "US NatGas Prices Top $9, Hit 2008 Highs As EU 'Convergence' Accelerates", when addressing a recent Pew Poll which found that "61% of Americans would favor exporting large amounts of natural gas to Europe", we doubt 61% would be supportive of such policies if they knew they are behind the historic spike in domestic nat gas prices. Today, none other than Reuters' senior energy analyst John Kemp confirms that behind the surge in US nat gas prices are LNG exports to Europe, writing that "US natural gas production will have to accelerate significantly if the country is to keep growing record export volumes without creating shortages for consumers at home." And while we may avoid shortages, we certainly will have much, much higher prices to look forward to before the European nat gas crisis "converges" with the US.According to Kemp, gas exports in the form of LNG were up by 674 billion cubic feet or 87% in the first three months of 2022 compared with the same period in 2019. Domestic consumption was flat over the same period, selected to span the pandemic, according to the latest monthly data compiled by the U.S. Energy Information Administration.But domestic production increased by only 433 billion cubic feet (5%), mostly as a result of low prices and consolidation within the industry. In consequence, LNG exports have grown to around 12% of domestic gas production, up from 4% in 2019, and the proportion is set to increase further. Net exports in all forms, by pipeline as well as LNG, hit a record 377 billion cubic feet in March 2022, up from just 121 billion in March 2019. Rapid growth in LNG exports, in excess of domestic production, has put increasing downward pressure on gas inventories and upward pressure on prices. At the end of March, working stocks in underground storage were 318 billion cubic feet below the pre-pandemic five-year average. After adjusting for inflation, front-month futures prices climbed in May to their highest since November 2008, on the eve of the financial crisis and great recession. In order to keep Europeans warm or cool, and avoid having them pay too high prices for Russian gas, real US prices are in the 83rd percentile for all months since 1990, up from the 8th percentile three years ago, signalling the need for more production and discouraging consumption. Reflecting the anticipated shortage of gas, futures prices for the current year compared with one-year forward have moved into a record backwardation. There are, however, signs that domestic producers are starting to respond to the strong price incentive to raise output. The number of rigs drilling specifically for gas has increased by 50% over the last six months, albeit from a low base, which should ensure output grows faster over the next year than in the last one. The increase in the number of rigs drilling for oil should also help by increasing the amount of associated gas production. The U.S. gas industry has been very successful in marketing its production to consumers in Europe and Asia who are anxious to diversify their sourcing and lock in reliable supplies. Now the industry must show it can produce enough gas to feed the export machine, or else it will be US consumers who are left footing the bill.

Canada ‘Missing the Boat’ on More LNG Export Opportunities, E&P Execs Warn --Canada’s energy industry and the regulators that oversee it need to get serious quickly if the country expects to be a player in the global natural gas market, a panel of exploration and production (E&P) executives said this week at a conference in Vancouver, British Columbia (BC). Countries across the world are scrambling for additional liquefied natural gas (LNG) supplies, especially after Russia invaded Ukraine. Competition has increased and prices have risen.“We always seem to be, quite literally, missing the boat on this opportunity,” Peyto Exploration and Development Corp. CEO Darren Gee said Tuesday at the Canada Gas & LNG Exhibition and Conference.The industry wants to better capitalize on the country’s prolific natural gas resources, particularly near proposed export projects in the Western Canadian Sedimentary Basin (WCSB) of BC and Alberta. According to the government, 18 LNG export facilities have been proposed in Canada, mostly in BC. The Shell plc-led LNG Canada project north of Vancouver is the only one under construction.“The problem with Canadian LNG projects is we’re in our own way,” Gee said. “We take too long, there is too much bureaucracy, there’s too much regulation, we miss the pricing window, we have cost overruns and the economic advantage that we should have is lost along the way.”The Peyto CEO and others that joined him on the panel noted how quickly the United States has built out LNG export infrastructure. They lamented that Canada now has to compete with dominant players along the Gulf Coast for offtakers. The first LNG exports left the Lower 48 in 2016. American export capacity is expected to reach 13.9 Bcf/d by the end of this year and surpass 16 Bcf/d in 2024 when the eighth U.S. terminal comes online.“If we would just not politicize this and do the best we can to exploit our resources – we have vast resources here in the WCSB – we could help the world,” LNG projects in Canada have moved so slowly that producers are now committing natural gas supply to Gulf Coast projects. Top producers Tourmaline Oil Corp. and Arc Resources Ltd. have signed deals with Cheniere Energy Inc. to capture the upside of overseas benchmarks in deals linked to the Japan-Korea Marker.“As Canadians, we want to keep this resource in Canada and export from Canada,” Gee said. “The last thing we should be doing is paying the U.S. a great big fee to run through all their infrastructure to get it on a boat.” Peyto has operations in the WCBS near LNG Canada and other proposed export terminals in BC.

BC’s Port Edward LNG Project Working to Quickly Move Canadian Natural Gas to Asia - Port Edward LNG Ltd. President Chris Hilliard, who is leading development of a small-scale liquefied natural gas (LNG) facility on the west coast of Canada, believes the project has unique advantages to become one of the country’s first LNG export terminals Hilliard said the 300,000 metric tons/year project could be in service by 2024. Considering development started in 2020, that would be a lightning timeline. However, the project is fully permitted by the British Columbia (BC) Utilities Commission and BC Oil and Gas Commission. It would also be supplied by the Pacific Northern Gas pipeline and electrified by nearby hydropower, leaving little infrastructure to be built.Canada’s oil and gas industry has struggled to get LNG export projects off the ground in the face of regulatory hurdles and prolonged negotiations with Indigenous First Nations. According to the government, 18 larger LNG export facilities have been proposed in Canada, mostly in British Columbia. The massive Shell plc-led LNG Canada project north of Vancouver is the only one under construction. It’s about 60% complete, but it’s not expected to come online until 2025 at the earliest. Hilliard’s $300 million project would have about 1% the capacity of a larger export facility. The plant would be built on a 37-acre site in Port Edward near the city of Prince Rupert, more than 600 miles north of Vancouver. Vessels could reach Asia about a week faster than those carrying LNG from the Gulf Coast, Hilliard said. Under the plans, Port Edward would load 40 ISO, i.e. International Organization for Standardization, containers each day, which would then be trucked to port for shipment overseas.

With Russia's Invasion of Ukraine, Mexico Said Facing 'Historic' Economic Opportunity -The war in Ukraine coupled with supply chain rebalancing brought on by the coronavirus pandemic is creating unique economic opportunities in Mexico, according to energy industry professionals who spoke Wednesday at the Mexico Gas Summit in San Antonio, TX. “It’s a historic opportunity,” said Francisco Acuña, president of Sonora State’s sustainable development committee. But, he said, “this opening is not going to last forever.” The opportunity, according to Acuña, was in the next year and a half. The executive said projects in Sonora were being developed, and natural gas is a key part of competitiveness. Sonora is home to Mexico Pacific Ltd.’s (MPL) planned liquefaction project envisioned for Puerto Libertad. “All the regions in Mexico that have developed economically have access to natural gas,” he said. Bank of America Merrill Lynch Director of Commodities Alfonso Martín said natural gas remains the cheapest molecule of energy globally, even at $9.00/MMBtu. This “creates a lot of opportunities” for Mexico. In Monterrey, in Nuevo Leon, “everyone is growing, everyone is building,” he said. He called manufacturing the “regal engine of growth in Mexico.” Manufacturing is energy intensive and benefits from natural gas across the border. He cited the squeeze industries in Europe were facing with natural gas prices many times higher than in Mexico.Participants expressed the need to develop Mexico’s natural gas resources, particularly its unconventional deposits in the north. Mexico imports as much as 90% of the natural gas it consumes.The Energy Commision of Tamaulipas’ Fernanda Alemán Alcocer, director of projects, said 67% of imported gas in Mexico runs through her state. She said natural gas generates jobs and “there haven’t been negative consequences from developing natural gas infrastructure – the opposite.”But, she said, Winter Storm Uri last year “exposed our vulnerability.” Mexico “is consuming gas that we have beneath our soil… Natural gas is about national security, and we need to pay attention.”

UK windfall tax hits North Sea-focused oil firm valuations— — Oil and gas exploration and production companies in the North Sea are set to miss out on billions of dollars of cash after the UK implemented a windfall tax on energy firms to tackle the rising cost of living. Analysts at Jefferies investment bank lowered price targets for UK-listed Harbour Energy Plc, EnQuest Plc and Serica Energy Plc, estimating that the energy profit levy will cost the companies $3.3 billion through 2025. Despite the hit, the bank retained a buy rating on the firms as higher oil and gas prices still means the three firms’ free cashflow levels will be more than 60% higher than their combined market capitalization based on current commodity forward prices. The UK government announced May 26 that it would impose a 25% windfall tax on oil and gas companies to help those being crippled by soaring energy costs. The measure also includes an 80% new-investment allowance that means energy companies can reduce the amount they pay if they commit to fresh capital expenditure. The North Sea was once dominated by Big Oil firms such as Shell Plc and BP Plc, but these have increasingly retreated from the area’s maturing fields. Private equity-backed firms, including Harbour and NEO Energy, have in turn gained ground, with the former now the biggest producer in the UK North Sea. The impact on Shell and BP will be less severe as their UK North Sea operations represent less than 10% of their operations, Still, BP has said it will review its investment plans in the UK, while Shell said the levy “creates uncertainty about investment in North Sea oil and gas for the coming years.”

Why Britain is spending £37 billion to make its energy-supply crisis worse --As he opened the COP26 climate talks in November, Boris Johnson warned “it’s one minute to midnight” in the race to slash planet-heating carbon emissions. His government has since announced £37 billion of funding focused squarely on subsidizing the consumption of energy -- much of it fossil fuels. The prime minister didn’t come to this point by choice. He’s reacting to a cost-of-living crisis that has impoverished millions of Britons. But his government has been forced to address this problem with tools that are both costly and climate-busting in large part because of past policy failings. Over the last decade, a raft of energy-efficiency measures such as home insulation have been botched or abandoned under successive Conservative prime ministers. The expansion of onshore wind power has also slowed markedly due to their restrictive policies. British consumers’ annual energy bills would be £2.5 billion ($3.2 billion) lower today if those things hadn’t happened, according to an analysis by Carbon Brief. The support for households announced this week was “absolutely necessary and the right thing to do” said Luke Murphy, associate director for energy and climate at the Institute for Public Policy Research, a progressive think tank. “But it should have been accompanied by investment in home insulation and an expansion of onshore wind to lower bills, increase energy security and tackle climate change.” Failure on these policies has left Johnson’s government “lurching from crisis to crisis, coming back with ever greater short-term fixes,” Murphy said. When COP26 concluded Alok Sharma, the conference president and UK cabinet minister, told the nearly 200 national delegations departing Glasgow that he would be pressuring them to stick to their climate promises. Six months later, it’s the hosts themselves rowing back on commitments signed at the United Nations summit.

Gazprom Suspends Gas to Important Energy Supply Link - In a statement posted on its Twitter page on Tuesday, Gazprom announced that it has completely suspended gas supplies to Netherlands’ GasTerra B.V. “due to failure to pay in rubles”. The Twitter statement comes with a link to a press release on the Gazprom website, although Rigzone is currently not able to access Gazprom’s site and has not been able to for some time. In a statement posted on its website on Monday, GasTerra said it had decided not to comply with Gazprom’s “one-sided payment requirements”. “In a decree issued on 31 March, Russian President Putin stated that, from now on, Russian gas would have to be paid for in rubles,” GasTerra said in the statement. “This means that anyone wanting to buy gas would have to open both a euro and a ruble account with Gazprombank in Moscow. GasTerra will not go along with Gazprom’s payment demands. This is because to do so would risk breaching sanctions imposed by the EU and also because there are too many financial and operational risks associated with the required payment route,” GasTerra added in the statement. “In particular, opening accounts in Moscow under Russian law and their control by the Russian regime pose too great a risk for the Groningen company,” GasTerra went on to note. GasTerra highlighted that the cessation of supply by Gazprom means that, between now and October 1, 2022, approximately two billion cubic meters of contracted gas will not be delivered. GasTerra said it has anticipated this by buying gas from other providers. “The European gas market is highly integrated and extensive. However, it is impossible to predict how the lost supply of two billion cubic meters of Russian gas will affect the supply/demand situation and whether the European market can absorb this loss of supply without serious consequences,” GasTerra said in the statement. “GasTerra has repeatedly urged Gazprom to respect the contractually agreed payment structure and supply obligations, but to no avail,” GasTerra added. GasTerra is a wholesaler that buys gas from domestic and foreign producers and on the open gas market. The company describes itself as an important link in the energy supply inside the Netherlands and Western Europe.

Russia expands Europe gas supply cutoffs -Russia is cutting off additional supplies of natural gas to Europe — this time impacting countries including Germany — as the continent moves ahead with its own ban on Russian oil. Russian company Gazprom said in Telegram posts on Tuesday that it would cut off gas supplied under a contract with Shell to Germany and under a contract with Danish company Ørsted and Dutch company GasTerra BV. The cutoffs come after the three companies failed to comply with Russia’s new requirement to pay for gas in Russian rubles, Gazprom said. The announcements represent an escalation in an ongoing energy battle between Russia and Europe as the European Union and its allies continue to sanction Russia over its invasion of Ukraine. A number of countries, including the U.S., have banned Russian oil. On Monday, the European Union agreed to an embargo of most of Russia’s oil imports by the end of the year. The companies all said in statements that they would purchase gas from elsewhere. Shell spokesperson Curtis Smith said via email that the company has “access to a diverse portfolio of gas from which we will continue to supply our customers in Europe.” Ørsted CEO Mads Nipper said the company has been “preparing for this scenario, so we still expect to be able to supply gas to our customers.” Nipper said that there is no gas pipeline that goes directly between Russia and Denmark, so Russia would not be directly cutting of the country’s supply. GasTerra said it “has anticipated this by buying gas from other providers” but also said that it is “impossible to predict” whether the European market can absorb the lost supply without serious consequences. GasTerra also said it would not meet Russia’s demand to pay in rubles because doing so “would risk breaching sanctions imposed by the EU” and cause “financial and operational risks,” such as government control of accounts in Russia. Meanwhile, Ørsted said in a statement that it was “under no obligation” under its contract to pay in rubles and “will continue to pay in euros.”

Russia's Gazprom cuts off some natural gas to Germany after Shell refused to pay for it in rubles - Russian energy-giant Gazprom said it has completely halted natural-gas supply to Shell under a contract that supplies the fuel to Germany, Europe's largest economy. The move came after Shell refused to pay Gazprom in rubles.Gazprom made the announcement on Wednesday — a day after itcut off natural-gas supplies to the Netherlands for the same reason.In a March 31 decree, Russian President Vladimir Putin demanded that natural-gas payments be made in rubles, which would entail opening a euro and ruble account with the country'sGazprombank to process payments.Gazprom said in its Telegram channel on Tuesday that Shell Energy Europe had notified Gazprom "it does not intend to make payments under the contract for the supply of gas to Germany in rubles.""As of the end of the business day on May 31 (the payment deadline stipulated by the contract), Gazprom Export had not received payment from Shell Energy Europe Limited for gas supplies in April," the Russian company wrote."Gazprom Export notified Shell Energy Europe Limited of the suspension of gas supplies under this contract from June 1, 2022" — until payment is made in rubles, the Russian company continued.Contracts for Russian gas to Europe transported via pipelines are typically denominated in euros, according to the Financial Times.Gazprom supplies up to 1.2 billion cubic meters of natural gas a year to Shell. That's just 1.3% of the 95 billion cubic meters of natural gas Germany consumes each year, according to the country's economy ministry.

Gazprom Suspends Gas Supplies to Orsted - Gazprom has announced that it has completely suspended gas supplies to Denmark’s Orsted Salg & Service A/S “due to failure to pay in Rubles”. The announcement was made on the company’s Twitter page and included a link to a press release on the Gazprom website, although Rigzone is currently not able to access Gazprom’s site and has not been able to for some time. In a statement posted on its website on Tuesday, Ørsted announced that Gazprom Export had informed Ørsted that the company would halt the supply of gas to Ørsted on June 1, 2022, at 6:00 CEST. “At Ørsted, we stand firm in our refusal to pay in Rubles, and we’ve been preparing for this scenario, so we still expect to be able to supply gas to our customers,” Mads Nipper, the group president and CEO of Ørsted, said in the statement. “The situation underpins the need of the EU becoming independent of Russian gas by accelerating the build-out of renewable energy,” Nipper added in the statement. In a statement posted on its website on May 30, Ørsted revealed that it had repeatedly informed Gazprom Export that it would not pay for gas supplies in Rubles. The company warned in the statement that there was a risk that Gazprom Export would stop supplying gas to Ørsted. “Since there is no gas pipeline going directly from Russia to Denmark, Russia will not be able to directly cut off the gas supplies to Denmark, and it will thus still be possible for Denmark to get gas,” Ørsted said in the statement. “However, this means that the gas for Denmark must, to a larger extent, be purchased on the European gas market. We expect this to be possible,” Ørsted added. The company outlined in the statement that it had been preparing for this scenario to minimize the risk of its gas customers, which it pointed out are primarily “major” companies in Denmark and Sweden, experiencing shortfalls in gas supplies. “Ørsted has storage capacity in e.g. Denmark and Germany, and we are currently filling up these storage facilities to secure gas supplies to our customers and contribute to the market’s security of supply,” Ørsted said. “We are in ongoing dialogue with the authorities about potential scenarios, and we trust that the authorities, who have the overall overview of the supply situation in Denmark, are prepared for the situation. We will remain in close dialogue with the authorities regarding the situation,” the company added.

Gazprom’s gas exports to Europe via Ukraine remain steady | Hellenic Shipping News Worldwide -- Russian gas producer Gazprom said its supply of gas to Europe through Ukraine via the Sudzha entry point was seen at 42.1 million cubic metres (mcm) on Friday versus 41.81 mcm on Thursday. An application to supply gas via another major entry point, Sokhranovka, was rejected by Ukraine, Gazprom said.

Burning gas to produce electricity is 'stupid,' the CEO of power giant Enel says --The CEO of Italian power firm Enel has cast doubt on the continued benefit of using gas to produce electricity, telling CNBC it is "stupid" and that cheaper and better alternatives are now available. Speaking to CNBC's Steve Sedgwick at the World Economic Forum, Francesco Starace discussed where Europe had sourced its gas from over the years, name-checking both Libya and Russia. Russia was the biggest supplier of petroleum oils and natural gas to the EU last year, according to Eurostat. The bloc is now attempting to wean itself off Russian hydrocarbons following the country's invasion of Ukraine. "I think this is a big wake up call," Starace said, adding that "too much gas" was being used "in a stupid way, because burning gas to produce electricity is, today, stupid." Instead, Starace said there were more attractive alternatives. "You can produce electricity better, cheaper, without using gas ... Gas is a precious molecule and you should leave it for … applications where that is needed," he added. These industrial uses include chemical applications, the paper industry and use in the production of ceramics and glass, he said. "Spare gas for them," Starace said. "Stop using gas for heating, stop using gas for generating electricity when there are alternatives that are better." Alternative methods of electricity generation include wind and solar power, among others. . According to a recent report from Ember, a think tank focused on moving the planet away from coal to what it calls "clean electricity," fossil fuels were responsible for 37% of EU electricity generation in 2021. Breaking down the above figure, Ember's report — published in February — said fossil gas power produced 18% of the EU's electricity, a three-year low. Renewables were responsible for 37%, while nuclear produced 26% of the bloc's electricity last year, Ember said. Across the Atlantic, preliminary figures from the U.S. Energy Administration show that natural gas was used in 38.3% of utility scale electricity generation in the United States in 2021.

Qatar LNG Output Falls As Desperate Market In Crisis Begs For More - LNG production in Qatar has fallen this year, even with increased calls for the fuel amid an energy crisis in Europe as the bloc attempts to wean itself off Russian gas,Bloomberg reported on Friday. Qatar exported less than 35 million tons of LNG from January to May—a loss of 1 million tons from the same period in 2021, according to ship-tracking data compiled by Bloomberg.The news comes just a few short months after Qatar wanted guarantees from Europe—leading up to Russia’s invasion of Ukraine—that the bloc would limit the resale of any LNG cargoes outside Europe on the spot market. Qatar also asked the EU to resolve an investigation dating back to 2018 into the Middle Eastern country’s long-term supply contracts.But even then Qatar wasn’t talking about increasing production. It was considering increasing its shipments to Europe by diverting LNG cargos away from Asia.Germany’s Economy Minister Robert Habeck recently visited Qatar with an eye to securing additional LNG cargo.“Qatar is in the process of increasing its gas extraction and we need more gas in the short term to replace Russian supplies,” Habeck said at the time.In 2021, Qatar made the FID on an LNG expansion project that would increase its annual capacity from 77 million tons to 110 million tons. But the $29 billion project isn’t set to be complete until 2025.According to Bloomberg, Qatar managed to export 84 million tons of LNG last year, despite its stated 77 million ton annual capacity.Germany has plans to build two import terminals to receive shipped LNG when it locates a source. But last month, Germany and Qatar hit a roadblock in their talks over long-term LNG deals. Qatar is looking for long contracts, while Germany is looking to leave room to transition away from fossil fuels.

EU To Block Seaborne Russian Oil Deliveries, Not Pipeline, To Satisfy-Hungary - Last week EU leaders held what was deemed an "awkward" summit, as one diplomat attendee put it, given the don't mention the Russian oil ban elephant in the room. Given Prime Minister Viktor Orban's Hungarian government recently likened a Russian oil ban to dropping a nuclear bomb on its economy (and with some smaller EU countries quietly agreeing with that assessment), there seems a growing consensus - at least behind the scenes - that a total embargo is completely unrealistic and untenable, especially amid steadily ratcheting energy prices.But the European Commission seems to have quickly changed its tune while facing certain 'hard realities', as many predicted, coming off a mere month ago when its head Ursula von der Leyen said, "This will be a complete import ban on all Russian oil, seaborne and pipeline, crude and refined." Now just weeks later, on Saturday the European Commission hinted it will move toward a ban only on seaborne deliveries, but not pipeline supplies as part of its "phased approach".Bloomberg on Saturday cited EU officials privy to the ongoing discussions who pinpointed that this allows a broader ban without significantly impacting Hungary's primary supply, which is transferred through the massive Druzhba pipeline, which is also the world's world's longest oil pipeline.Industry publications point out that in the month prior to the Russian invasion of Ukraine, some 750,000 b/d of Russian crude flowed through the Druzhba to various refineries in Europe.Bloomberg writes of the impending modified oil ban that "The proposal would give extra time to Hungary, which has antagonistic the deal, to discover a technical resolution that satisfies its power wishes. It might additionally cope with the worries of different landlocked nations, together with Slovakia and the Czech Republic."And further, "Bulgaria would get a transition duration till June or December 2024 and Croatia may get an exemption for imports of vacuum fuel oil. The fee additionally proposed proscribing re-exports of Russian oil provided by way of pipeline to different member states or 3rd nations."Hungary's strong resistance is not the only factor driving a compromised "ban" - as Von der Leyen described in an interview days ago with MSNBC that she fears Russia's Vladimir Putin "might be able to take the oil that he does not sell to the EU to the world market, where the prices will increase, and sell it for more – and that would fill his war chests." For example China has reportedly stepped up purchases for its strategic reserves, with India also said to be salivating over more imports.

EU leaders agree to ban 90 percent of Russian oil by year-end (AP) — European Union leaders agreed Monday to embargo most Russian oil imports into the bloc by year-end as part of new sanctions on Moscow worked out at a summit focused on helping Ukraine with a long-delayed package of new financial support. The embargo covers Russian oil brought in by sea, allowing a temporary exemption for imports delivered by pipeline, a move that was crucial to bring landlocked Hungary on board a decision that required consensus. EU Council President Charles Michel said the agreement covers more than two-thirds of oil imports from Russia. Ursula Von der Leyen, the head of the EU’s executive branch, said the punitive move will “effectively cut around 90% of oil imports from Russia to the EU by the end of the year.” Michel said leaders also agreed to provide Ukraine with a 9 billion-euro ($9.7 billion) tranche of assistance to support the war-torn country’s economy. It was unclear whether the money would come in grants or loans. The new package of sanctions will also include an asset freeze and travel ban on individuals, while Russia’s biggest bank, Sberbank, will be excluded from SWIFT, the major global system for financial transfers from which the EU previously banned several smaller Russian banks. Three big Russian state-owned broadcasters will be prevented from distributing their content in the EU. “We want to stop Russia’s war machine,” Michel said, lauding what he called a “remarkable achievement.” “More than ever it’s important to show that we are able to be strong, that we are able to be firm, that we are able to be tough,” he added. Michel said the new sanctions, which needed the support of all 27 member countries, will be legally endorsed by Wednesday. The EU had already imposed five previous rounds of sanctions on Russia over its war. It has targeted more than 1,000 people individually, including Russian President Vladimir Putin and top government officials as well as pro-Kremlin oligarchs, banks, the coal sector and more. But the sixth package of measures announced May 4 had been held up by concerns over oil supplies. The impasse embarrassed the bloc, which was forced to scale down its ambitions to break Hungary’s resistance. When European Commission President Ursula von der Leyen proposed the package, the initial aim was to phase out imports of crude oil within six months and refined products by the end of the year. Both Michel and von der Leyen said leaders will soon return to the issue, seeking to guarantee that Russia’s pipeline oil exports to the EU are banned at a later date. Hungarian Prime minister Viktor Orban had made clear he could support the new sanctions only if his country’s oil supply security was guaranteed. Hungary gets more than 60% of its oil from Russia and depends on crude that comes through the Soviet-era Druzhba pipeline. Von der Leyen had played down the chances of a breakthrough at the summit. But leaders reached a compromise after Ukrainian President Volodymyr Zelenskyy urged them to end “internal arguments that only prompt Russia to put more and more pressure on the whole of Europe.” The EU gets about 40% of its natural gas and 25% of its oil from Russia, and divisions over the issue exposed the limits of the 27-nation trading bloc’s ambitions.

EU Approves New Sanctions Package, Including Partial Russian Oil Ban, After Compromise With Orban - The European Union has once again reportedly backed off a more hardline position in its newest anti-Russia sanctions package based on the objections of Viktor Orban.According to news wires, the sanctions deal has been approved after a measure that imposed individual sanctions on Russian Orthodox Patriarch Kirill has been removed. Hungary's Orban had rejected the move which he argued threatens religious freedom. Importantly, the partial Russian oil embargo has been approved. Bloomberg reports:The European Union approved a sixth package of sanctions including a partial ban on Russian oil imports after Hungary dropped objections that had been holding it up for weeks.EU ambassadors meeting on Thursday backed the measures, which would represent the EU’s toughest yet and are aimed at curbing Russia’s ability to finance the war in Ukraine, according to people familiar with the matter. And more:The measures would forbid the purchase of crude oil from Russia delivered to member states by sea in six months and refined petroleum products in eight months. Pipeline crude would be temporarily spared as a concession to Hungary and other landlocked countries, which rely on Russian supplies through the Druzhba pipeline.Earlier, Politico detailed that Orban has long been on record as saying this is a religious freedom matter, and that the precedent of sanctioning top religious figures cannot be set with the new sanctions package.

IEA: Current Energy Crisis Is “Much Bigger” Than 1970s Oil Crunch - 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.The world, especially Europe, could face a summer of shortages of gasoline, fuel, and jet fuel, the IEA’s Birol told Der Spiegel.Fuel demand is set to rise as the main holiday season in Europe and the United States begins, Birol added.Upended crude oil flows add to reduced global refinery capacity resulting in low inventories of products, including in the United States.Refinery capacity for supply, globally and in the U.S, that is now a few million barrels per day lower than it was before the pandemic.Some 1 million bpd of refinery capacity in the U.S. has been shut permanently since the start of the pandemic, as refiners have opted to either close losing facilities or convert some of them into biofuel production sites. Globally, refinery capacity is also stretched thin, especially after Western buyers—including in the U.S.—are no longer importing Russian vacuum gas oil (VGO) and other intermediate products necessary for refining crude into gasoline, diesel, and jet fuel.The fuel market is extremely tight in Europe, too, and is set to tighten further after the EU ban on most Russian imports.

EXPLAINER: Effects of EU Russia oil ban, Moscow's response - (AP) — The European Union has agreed to slash Russian oil imports in a tough escalation of the bloc's campaign of sanctions to punish Moscow for its invasion of Ukraine. It's a landmark decision that will hit Russian coffers in the long term, but could also hurt consumers across the European continent. The move agreed late Monday at an EU leaders' summit in Brussels comes amid soaring energy prices in Europe and could spark more rises, particularly later this year as nations compete for natural gas supplies to heat homes and fire industries, analysts say. Just hours before U.S. markets opened Wednesday, benchmark U.S. crude had climbed $1.25 to $115.92 per barrel in electronic trading on the New York Mercantile Exchange. Analysts say that amid high oil prices, the sanctions are unlikely to hit Russia hard soon, but they deprive Moscow of one of its most important customers for oil — likely for a long time to come. European Union leaders agreed to cut Russian oil imports by about 90% over the next six months, a dramatic move that was considered unthinkable just months ago. The 27-country bloc relies on Russia for 25% of its oil. The ban applies to all Russian oil delivered by sea. It contains a temporary exemption for oil delivered by the Russian Druzhba pipeline to certain landlocked countries in Central Europe. Germany and Poland have agreed to stop using oil from the northern branch of the pipeline. Russian oil delivered by sea accounts for two-thirds of the EU’s oil imports from Moscow. Russia has the world’s largest natural gas reserves and is the biggest global exporter, according to the International Energy Agency. But don't expect the 27-nation bloc's leaders to sign off on a ban on Russian gas imports any time soon. The bloc imports 40% of its gas — used for everything from generating electricity to heating homes — from Russia, and finding alternative supplies is tougher than for oil. “Russian oil is much easier to compensate for ... gas is completely different, which is why a gas embargo will not be an issue in the next sanctions package,” said Austria’s Chancellor Karl Nehammer. That doesn't mean gas is immune from the geopolitical tensions. Russia is flexing its economic muscle and retaliating to other sanctions by cutting off or restricting gas supplies to some European nations. Russian state energy giant Gazprom said this week it is halting the flow of gas to Dutch trader GasTerra and Denmark’s Oersted company and is also stopping shipments to Shell Energy Europe that were bound for Germany. Germany has other suppliers, and GasTerra and Oersted said they were prepared for a shutoff. Gazprom previously stopped the flow to Bulgaria, Poland and Finland..Amid concerns about the devastating war in Ukraine and moves to punish Russia invading its neighbor, energy bills and gasoline prices have been high for months and governments have been cutting taxes in a bid to spare their citizens.Even so, energy consumers — that's basically everybody who flicks a light switch, takes a shower, looks at their phone screen or fills their car's fuel tank — are feeling the pinch and looking for ways to cut costs where they can.As oil prices rose again Wednesday, motorists in the eastern Netherlands were crossing the border in droves to refuel in neighboring Germany, where government tax cuts have made a liter of gasoline much cheaper than in the Netherlands. Dutch broadcaster NOS showed lines of cars with Dutch license plates waiting outside German gasoline sellers. Short term, the oil ban will likely not hurt Russia too much amid high oil prices that mean Moscow can sell at a discount to clients in Asia and still make a profit, said Chris Weafer, CEO at Macro-Advisory Ltd., a consulting firm. “The financial pain for Russia probably will come more next year or over the next couple of years if it still has to offer discounts,” Weafer told the AP.

EU Continues to Try to Hurt Russia by Shooting Itself in the Foot –Yves Smith - It's hard to make any sense of what EU leaders think they are accomplishing in their latest round of sanctions against Russia. Oh, and in case you lost count, this is the sixth package.German industrialists have to be sweating bullets over the prospects of high energy costs and even shortages making them uncompetitive. Sure, some may be able to use an EU energy train wreck as an excuse to accelerate shifting production to Asia and other cheaper locations outside Europe. But the war-mongering explanation for the US, state capture by arms merchants, isn’t strongly operative there.For the details: this sixth package gets the EU its much-sought-after embargo of Russian oil, although it’s only a partial embargo, thanks to prime minister Viktor Orban acting like a bad Hungarian populist rather than a good European. Orban threatened to veto a full-bore embargo since all of Hungary’s oil comes via the Druzhba pipeline. By contrast, most of the EU’s oil comes by tanker, which as we’ve pointed out and Alexander Mercouris has confirmed, allows for Russian oil to still come to Europe via out and out laundering through cut-outs and mixing with non-Russian source product, albeit at a higher cost. So landlocked countries on a Russian pipeline can’t cheat while the others can. So after weeks of wrangling, the EU relented and voted through the Hungarian scheme. The summary from the Wall Street Journal:The embargo would include an exemption for oil delivered from Russia via pipelines, an amount that makes up one-third of EU oil purchases from Russia. EU officials said that by the end of this year, the embargo would cover 90% of previous Russian oil imports. It would be phased in over several months….The moves include the removal of three Russian banks—including the largest, Sberbank—from the Swift financial-transactions network; a ban on three leading Russian broadcasters in the bloc; and targeted sanctions against Russian military officials and other leading figures.If you think the EU will really, truly, will have cut its imports of Russian oil by 90% in a few months, I have a bridge I’d like to sell you. And yet more sanctioning of individuals is a sign that the EU is hitting the bottom of the barrel.And let us also not forget that the outlook for food this year was bad already between climate change and Covid. France, the number 4 wheat producer v. Ukraine as number 5, had a disastrous year. US output is down. Canada’s will be up but our readers contend the headlines exaggerate by how much. But Russia, the biggest wheat exporter, is set to have a bumper year.So if all these countries really need food, and food scarcities are the number one producer of social upheaval and government overthrow, pray tell how does piling more sanctions onto Russia make sense as they are also asking for more grain and fertilizer? Are they so stuck in their colonialist way of thinking that they think it makes sense to try to harm a country economically while demanding it export to you?The readouts from the Kremlin of the calls were remarkably similar, suggesting that these European big dogs all had pretty much the same talking points, and Putin had to keep repeating the same response. From the readout of the call from Macron and Scholz:Vladimir Putin explained the real reasons for the unstable food supplies, saying that the disruptions were due to Western countries’ erroneous economic and financial policies, as well as their anti-Russia sanctions. He substantiated his statements with evidence and specific data. Russia, on the other hand, is ready to help find options for unhindered grain exports, including the export of Ukrainian grain from the Black Sea ports. Increasing the supplies of Russian fertilisers and agricultural produce will also help reduce tensions in the global food market, but that will definitely require the lifting of the relevant sanctions.Shorter Putin: “What about ‘You have to drop the sanctions’ don’t you understand?”

The EU Needs More Than $1 Trillion For Plan To Ditch Russian Oil And Gas - The European Union’s REPowerEU seeks to reduce the European Union’s dependency on Russian fossil fuels and accelerate the transition away from carbon-intensive energy sources. The European Commission’s cost estimate, however, may fall short as Rystad Energy analysis suggests the plan will require at least €1 trillion in investment to meet the core objective of increasing renewable generation from 40% to 45% of total energy supply by 2030. Additional investment will be required to meet targets, including grid and battery storage developments to ensure a stable supply of energy as the whole European power system will need to be restructured. While the plan defines different angles to tackle the current crisis, the most detailed section outlines the roadmap for solar PV. The strategy aims to bring 320 gigawatts (GW) of solar PV online by 2025 and almost 600 GW by 2030, aiming to displace 9 billion cubic meters (Bcm) of gas demand. Europe currently has around 189 GW of installed solar PV capacity, meaning 131 GW need to be installed by the middle of the decade, or an equivalent of 44 GW per year. This would mean almost doubling the installation rate, which was 24 GW in 2021 and is expected to be 29 GW this year. To reach the targeted 600 GW by 2030, around 56 GW of new solar PV capacity would need to be installed during the following five years.Assuming an average cost for solar PV of €1.1 million per megawatt (MW) of installed capacity, installing 411 GW between now and 2030 would represent an investment of €452 billion. Reaching 45% renewable energy supply by 2030 additionally requires significant investments in wind capacity – for which the plan does not have a lot of detail. Rystad Energy’s estimates suggest another 450-490 GW of wind capacity would need to be installed by 2030 to reach the target of 45% renewable energy supply, requiring an additional €820 billion in investments.Such a transition will require huge investments but thus far the European Commission has been unclear about the total amounts allocated to achieve its goals. Recent announcements and communications mention that €225 billion is already available in loans and that an additional investment of €300 billion could be needed by 2030. Regardless of the total amount being assigned to new renewable energy developments, the figures seem to fall considerably below the required additional investment needed in power transmission, storage, gas infrastructure, and hydrogen production. Furthermore, such a large demand for new capacity will put additional pressure on the supply chain for solar panel and wind turbine manufacturing and could lead to a further increase in costs for these technologies.“The ambition of the REPowerEU plan is huge. Power companies and energy markets will be looking for details on investments and infrastructure. While the targets are achievable, it will require wartime-like planning, levels of investment, construction, and production to meet goals by 2030,” says Carlos Torres Diaz, head of power research at Rystad Energy.

Despite sanctions and boycotts, Russia could still rake in $800 million a day from oil and gas this year — more than it pulled in last year -Russia has been hit with intensifying sanctions ever since it invaded Ukraine — but Moscow could still rake in $800 million a day from oil and gas revenues this year amid soaring energy prices, according to Bloomberg Economics.President Vladimir Putin's regime has been holding up so far as oil prices have risen about 50% this year and are at 13-year highs. The gains could bring Russia's oil and gas sales to total $285 billion this year, Bloomberg forecasts. This is 20% higher than the country's $235.6 billion takings from oil and gas in 2021.The European Union's (EU) reliance on Russian energy is contributing to Moscow's windfall, as the bloc gets about 40% of its natural gas from the country.On Monday, the EU agreed to slash 90% of Russian oil imports to the bloc by the end of 2022 — but some countries in the group, includingGermany, Europe's largest economy, continue to be heavily dependent on Russian gas and have caved in to Putin's demands to pay in rubles. This is in turn driving up demand for the Russian currency, which has become the world's top-performing currencyagainst the US dollar this year so far. Meanwhile, countries like China and India are buying discounted Russian oil, further undermining international sanctions.Notably, that forecast $800 million a day windfall is from energy alone. Russia is also a major producer of other commodities like wheat and metals such as palladium and platinum.The country's earnings from the raw materials trade are likely to exceed $300 billion this year, per Bloomberg Economics. This could offset the same amount in Russia's foreign reserves that have been frozen under international sanctions.Russia's gains from the commodities rally predate the war as prices of raw materials have been on the up due to supply-chain challenges and recovering demand as pandemic restrictions ease. Russia's invasion of Ukraine worsened trade dislocations and pushed up prices even more as the two countries are key commodity exporters.

Why clean fuels won't replace Russian oil in Europe - Europe’s decision to ban the vast majority of Russian oil imports has the potential to remake global markets. What it means for the climate is less certain. Analysts said the announcement this week from the European Commission that it would ban Russian seaborne crude imports has the potential to alter trade flows, hinder Russia’s oil industry and contribute to a sustained period of high crude prices. That level of disruption could prompt serious attempts to green global energy systems. But whether the world takes the opportunity to transition to cleaner fuels is an open question, observers said.In Europe, where leaders have doubled down on their pledge to supercharge deployment of renewables, electric vehicles and heat pumps, countries face urgent logistical and technological challenges to their green ambitions. Siting reform is needed to ensure wind and solar projects can be built. Electric vehicle manufacturing needs to rapidly expand. And new technologies, like green hydrogen, must be perfected to offer alternatives to hard-to-green sectors of the economy like industry.The rest of the world’s challenges may be even more daunting.The United States lacks Europe’s political commitment to climate action, as seen by stalled attempts to pass climate legislation in Congress. Emerging markets face the challenge of rising interest rates and a strengthening dollar, making an already expensive transition even pricier. And while rising oil prices make alternatives more attractive financially, they also make the politics around energy more volatile. Consumers become particularly attuned to perceived increases in energy bills when prices are already high. “High prices tend to expel incumbent politicians faster than they encourage new technology,” Europe’s ban on most Russian oil imports is significant because of its potential role in global oil markets. In 2020, Europe accounted for 14.5 percent of global oil consumption, according to BP PLC’s most recent Statistical Review of World Energy. Much of that oil comes from Russia, which competes with the United States and Saudi Arabia as the world’s leading crude exporter.ClearView estimates roughly 45 percent of Russian oil exports were shipped to Europe in 2021. Seaborne shipments delivered via oil tankers accounted for about two-thirds of Russian exports to Europe.The embargo, part of a sixth round of sanctions aimed at preventing Russia’s ability to finance its war in Ukraine, does exempt oil that arrives via pipeline. But European Commission President Ursula von der Leyen said yesterday she expected the ban would grow to encompass 90 percent of all Russian imports once Germany and Poland cease pipeline deliveries by the end of the year.Europe is served by the Druzhba pipeline, which supplies Russian oil to Germany and Poland in the north, while a southern spur sends oil to Hungary and Slovakia. Oil will continue to flow to those countries for the time being, though how much longer remains to be seen.“This is a topic we will come back to,” von der Leyen said Monday in announcing the embargo. “But it is a big step forward from what we did today.”

G-7 says OPEC has key role to play to ease tight energy markets — The Group of Seven urged OPEC to pump more oil, even as it made new pledges to try to fight climate change. “We call on oil and gas producing countries to act in a responsible manner and to respond to tightening international markets, noting that OPEC has a key role to play,” ministers said in a communique after a meeting in Berlin. OPEC, which has an alliance with Russia known as OPEC+, has so far resisted calls from the U.S. to crank up its production beyond the gradual increases it has long planned. The cartel meets next week and is expected to stick to its plan even as the war in Ukraine is causing a surge in oil and gas prices that’s fueling a cost-of-living crisis for consumers. The G-7 has been a forum for pushing the climate agenda. But the war has made consumer nations reassess their priorities -- with short-term energy security trumping longer-term climate plans. The group recognized that change of priorities, acknowledging that government measures to ease the crunch for consumers -- for example with subsidies for fossil-fuel use -- go against previous climate promises. “Nevertheless, we aim for our relief measures to be temporary and targeted and we reaffirm our commitment to the elimination of inefficient fossil fuel subsidies by 2025,” the communique read. Energy ministers also vowed to end direct public support for foreign fossil-fuel projects by the end of this year -- while allowing for exceptions “defined by each country.” The move was also caveated with the recognition that “advancing national security and geostrategic interests is crucial.

Russian foreign ministry says EU oil sanctions will lead to further price rises - The Russian Foreign Ministry said June 2 that the latest EU sanctions restricting imports of Russian oil and banning shipping insurance, will lead to further price rises. Oil prices have seen major volatility in recent months, as Russia’s invasion of Ukraine raised supply security risks and triggered sanctions and self-sanctions on purchases of Russian oil. Dated Brent was assessed at $100.49/b by S&P Global Commodity Insights on Feb. 23 – the day before Russia invaded Ukraine. It soared to $137.64 March 8 before dropping back down. It was last assessed at $122.96/b on June 1. “The EU’s decisions to partially phase out Russian oil and oil products, as well as to ban the insurance of Russian merchant ships, are highly likely to provoke further price increases, destabilize energy markets, and disrupt supply chains,” the Russian Foreign Ministry said in a statement. On May 30, EU leaders agreed to ban most Russian oil imports. Deliveries via the Druzhba pipeline are excluded from the ban. Platts Analytics estimates the latest EU measures will hit some 1.9 million b/d of Russian crude imports by the year end, with some 300,000 b/d still flowing to Hungary, Slovakia and the Czech Republic via pipeline. Another 1.2 million b/d of refined product imports from Russia would cease by the end of the year. Hungarian imports via Druzhba are currently at around 20,000 mt/day, Peter Szijjarto, Minister of Foreign Affairs and Trade of Hungary said June 2. “We have a very stable supply of that amount of oil on a daily basis, so what we count on is that deliveries will be according to the contract,” Szijjarto said.

Russia hits back at the EU's partial oil embargo, says it will find other importers for its crude - Moscow has pledged to find other importers for its oil shortly after the world's largest trading bloc agreed to impose a partial embargo on Russian crude. The European Union on Monday decided to ban most Russian oil imports by the end of the year as part of new measures designed to punish the Kremlin over its unprovoked invasion of Ukraine. The move was hailed by EU foreign policy chief Josep Borrell as a "landmark decision to cripple [Russian President Vladimir] Putin's war machine." It covers Russian oil brought into the bloc by sea, with an exemption carved out for imports delivered by pipeline following opposition from Hungary. The EU's long-delayed sixth package of sanctions against Russia required approval from all 27 member states and has yet to be formally ratified. Responding to the measures, Mikhail Ulyanov, Russia's permanent representative to international organizations in Vienna, said the oil ban reflects negatively on the bloc. "As she rightly said yesterday, #Russia will find other importers," Ulyanov said via Twitter, referring specifically to European Commission President Ursula von der Leyen. The commission is the executive body of the EU. "Noteworthy that now she contradicts her own yesterday's statement. Very quick change of the mindset indicates that the #EU is not in a good shape," he added. The EU's von der Leyen welcomed the bloc's agreement on oil sanctions against Russia. She said the policy would effectively cut around 90% of oil imports from Russia to the bloc by the end of the year, and soon return to the issue of the remaining 10% of pipeline oil. Roughly 36% of the EU's oil imports come from Russia, a country that plays an outsized role in global oil markets. To be sure, Russia is the world's third-largest oil producer, behind the U.S. and Saudi Arabia, and the world's largest exporter of crude to global markets. It is also a major producer and exporter of natural gas. Ukrainian officials have repeatedly insisted the EU impose a total embargo on Russian oil and gas, with energy-importing countries continuing to top up Putin's war chest on a daily basis. Estonia's prime minister, Kaja Kallas, on Tuesday called for the EU to go even further and discuss the prospect of a Russian gas embargo in the next round of sanctions. Austria's chancellor, Karl Nehammer, abruptly rejected this idea, however, saying it will not be a topic for discussion in the next set of measures. The split comes as Russia's state-owned energy giant Gazprom fully cut off supplies to Dutch gas trader GasTerrra, and as Denmark's Orsted warned it too was facing a halt to supplies. Oil prices jumped on Tuesday afternoon. International benchmark Brent crude futures rose 1.5% to $123.48 a barrel, while U.S. West Texas Intermediate futures climbed 3% to $118.56. European Council President Charles Michel said the compromise on oil sanctions reaffirmed the bloc's unity in response to the Kremlin's onslaught. It had been thought that a failure to secure any type of deal would likely have been heralded as a victory for Putin.

How Russia could try to get around the European Union's oil sanctions - Moscow could respond to European sanctions on Russian oil by seeking other buyers for its crude or cutting production to keep prices high. Its actions would have a global economic impact — unless OPEC intervenes. EU leaders on Monday agreed to ban 90% of Russian crude by the end of the year as part of the bloc's sixth sanctions package on Russia since it invaded Ukraine. "The Russian response obviously will bear close watching," Russia is the world's third-largest oil producer after the U.S. and Saudi Arabia, and the second largest crude oil exporter behind Saudi Arabia, according to the International Energy Agency. "What is going on now will change oil-natural gas trade into the future. Oil prices will not decline any time soon and the fallout of Russian sanctions will be felt for a few years," Whether Russia manages to offload its sanctioned crude and how much it can sell would affect oil prices globally. Roughly 36% of the EU's oil imports coming from Russia. Mikhail Ulyanov, Russia's permanent representative to international organizations in Vienna, said the country will look for other buyers for its oil. "Whether those barrels find homes in India, China, and Turkey could hinge on whether the EU ultimately opts to target shipping and insurance services and whether the US chooses to impose Iran-style secondary sanctions," RBC's Croft wrote. Moscow already has two likely buyers for its crude: China and India. The countries have been buying discounted Russian oil and industry watchers say that looks set to continue. While India traditionally imports very little crude from Russia — only between 2% to 5% a year, according to market watchers — its purchases have soared in recent months. India bought 11 million barrels in March and that figure jumped to 27 million in April and 21 million in May, according to data from commodity data firm Kpler. That's a stark contrast to the 12 million barrels it bought from Russia in all of 2021. China was already the largest single buyer of Russian oil but its oil purchases have also spiked. From March to May, it bought 14.5 million barrels — a three-fold increase from the same period last year, according to Kpler data. Russia could also cut crude production and exports to cushion the blow to its finances. On Sunday, Russian oil firm Lukoil's vice president, Leonid Fedun, said the country should slash oil output by up to 30% to push prices higher and avoid selling barrels at a discount. "Officials in Washington have expressed concern that Moscow might move to upend an orderly year-end wind-down by slashing exports over the summer to inflict maximum economic pain on Europe and test the collective resolve of the member states to defend Ukraine," Croft said on Tuesday. Given the "alarmingly low" inventory and the scarcity of refining capacity, a preemptive Russian cut-off could have a very damaging economic impact this summer, she added. "For Russia, we think the impact of lower export volumes this year will be mostly offset by higher prices," Since the beginning of the Russia-Ukraine war, there have been 180 ownership changes of vessels from Russian entities to non-Russian ones, according to maritime artificial intelligence firm Windward, which cited its own proprietary data.Many of the Russian vessels were sold to firms based mostly in Singapore, Turkey, United Arab Emirates, and Norway, according to Windward.

Russia’s Oil Output Up 5% in May – Vedomosti - Russia's oil production increased by 5% in May after it saw one of its steepest drops the previous month under Western pressure over the war in Ukraine, the Vedomosti business daily reported Friday. Russian crude output last month totaled 43.1 million tons and averaged 10.2 million barrels per day, Vedomosti cited an unnamed industry source as saying. That marked a 5% increase from 10 million bpd extracted in April, when Russia saw one of the sharpest falls since the collapse of the Soviet Union. Vedomosti’s data showed Russian production at 11 million bpd in March and 11.1 million bpd in February. In annual terms, Russia’s May 2022 output dropped 2.5% from May 2021. So far this year, Russia’s crude output totaled 219.9 million tons in January-May, a 3.5% increase over the same period last year. Russia’s Finance Ministry forecasts a 17% decline in oil production this year, averaging an 18-year low of 9.13 million bpd. On Monday, the European Union agreed to ban 90% of Russian crude by the end of 2022 as part of its sixth sanctions package over Russia’s invasion of Ukraine. The embargo includes carve-outs for EU member states most dependent on Russian oil. Experts interviewed by Vedomosti linked last month’s rebound in crude output to new Asian buyers sought after by Russia following U.S. and British sanctions and falling demand in Europe.

Russia Sends Record Volumes Of Oil To India, China -While Europe shuns Russian oil amid sanctions and expectations of an oil embargo on Russian oil imports, India and China have stepped up purchases and are importing record volumes of Russian crude, according to data from energy analytics company Kpler cited by Bloomberg on Friday. Russia had up to 79 million barrels of crude either traveling on tankers or held in floating storage over the past week, Kpler’s estimates have shown. That’s more than double the 27 million barrels of crude Russia had seaborne in February, just before Putin’s invasion of Ukraine.Before the war, Russia was primarily selling its crude to Europe, but this is no longer the case after buyers, governments, international trading houses, and oil majors are all avoiding dealing with Russian oil, all the more so given the EU sanctions ban on bank transactions with the biggest Russian oil producers, including Rosneft. Trade majors have now wound down purchases of Russia’s oil.But China and India aren’t shying away from Russian crude, although some Chinese state giants haven’t ramped up imports of spot cargoes from Russia despite the steep discounts at which Russian oil is selling.In India, cheap Russian crude oil is attracting India’s price-sensitive buyers to the point that Russia became the fourth largest oil supplier to India in April, moving up from the 10^th place in March, according to shipment-tracking data compiled by Reuters.The significant increase in India’s purchases of Russian crude has already drawn the attention of the United States, which has reportedly sent a U.S. federal government official to discuss U.S. sanctions on Russia and try to convince India to reduce its purchases of Russian oil.China, for its part, registered in April its first annual increase in crude oil imports since January as shipments rebounded on the back of higher arrivals from Russia, analysts say.“Some of the interested buyers in Asia are more motivated by economics rather than taking a political stand,” Jane Xie, a senior oil analyst at Kpler in Singapore, told Bloomberg.

Oil imports from Russia likely to go up by 20 per cent in June- Imports of Russian crude by India are likely to grow by 20% month-on-month to 1.05 million barrels per day (bpd) in June, as per the data compiled by commodity analysts Kpler. The data highlighted India imported 840,645 barrels per day (bpd) of Russian crude in May, up from 388,666 bpd in April and 136,774 bpd in May last year. Currently, India requires a total of 5 million barrels oil per day for its usage. It means, considering all these figures, 25% of India’s oil need is fulfilled by Russian crude. India, which usually imports nearly 2% of its oil needs from Russia, has enhanced its imports ever since the war broke out between Russia and Ukraine. Russia is the world’s second-largest oil producer, and it supplies nearly 35% of natural gas to Europe. However, following the war, western countries have put various sanctions on Russia, including banning Russian crude in the European market. These countries are pressuring India not to trade crude from Moscow at ‘cheaper rate’. However, India has refused to do so, and on the contrary, it has raised its crude purchase manifold from Russia. “India will continue to buy crude at competitive prices wherever it may be available across the world to fulfill its requirement for economic growth,” said Gaurav Moda, India energy leader, EY. India is the world’s third-largest oil importer, it imports nearly 80% of its crude requirement. India imports 52.7% from the Middle-East countries,15% from Africa and 14% from the US. It sources nearly 86% of crude oil, 75% of natural gas, and 95% of LPG from members of the OPEC+.

Russia Sanctions: India Profiting From Russian Oil Trade by Exporting Refined Petroleum --India is defying western sanctions to buy millions of barrels of discounted Russian crude oil and exporting refined petroleum products with a big markup to make a huge profit. China has yet to increase its oil imports from Russia, according to news reports. Meanwhile, India's neighbors Bangladesh and Pakistan are abiding by western sanctions and paying much higher market prices to buy oil for their domestic needs, and hurting their people. Such double standards are not going unnoticed. India is importing large amounts of deeply discounted Russian crude, running its refiners well above capacity, and capturing the economic rent of sky-high crack spreads and exporting gasoline and diesel to Europe, according to MarketWatch. “As the EU weans from Russian refined product, we have a growing suspicion that India is becoming the de facto refining hub for Europe,” said Michael Tran, global energy strategist at RBC Capital Markets, in a Tuesday note. Here’s how the puzzle pieces fit together, according to Tran:"India is buying record amounts of severely discounted Russian crude, running its refiners above nameplate capacity, and capturing the economic rent of sky-high crack spreads and exporting gasoline and diesel to Europe. In short, the EU policy of tightening the screws on Russia is a policy win, but the unintended consequence is that Europe is effectively importing inflation to its own citizens. This is not only an economic boon for India, but it also serves as an accelerator for India’s place in the new geopolitically rewritten oil trade map. What we mean is that the EU policy effectively makes India an increasingly vital energy source for Europe. This was historically never the case, and it is why Indian product exports have been clocking in at all-time-high levels over recent months". Bangladesh and Pakistan are afraid to buy Russian oil for fear of western sanctions while American ally India feels free to do so. As Pakistani Finance Minister Miftah Ismail told CNN's Becky Anderson in an interview, “It is very difficult for me to imagine buying Russian oil. At this point I think that it would not be possible for Pakistani banks to open LCs or arrange to buy Russian oil". Similarly, Bangladeshi Foreign Minister AK Abdul Momen told journalists: “You are seeing that they (western nations) keep bossing us and you (journalists) also encourage them. Every day, they come up with new issues. We used to call them development partners. They do not pay for the development but keep giving advice.” “We do not want to get into any problem. We want peace in the world,” Momen added. The West, particularly the United States, is turning a blind eye to India's actions when it comes to busting sanctions on Russia. Indian Prime Minister Narendra is openly funding the war in Ukraine by buying weapons and oil from Russia. At the same time, India's smaller neighbors feel intimidated by the threat of western sanctions if they follow Modi's example. Such double standards are not going unnoticed.

Global refiners struggle to meet global demand amid high prices, shortage -Refiners worldwide are struggling to meet global demand for diesel and gasoline, exacerbating high prices and aggravating shortages from big consumers like the United States and Brazil to smaller countries like war-ravaged Ukraine and Sri Lanka. World fuel demand has rebounded to pre-pandemic levels, but the combination of pandemic closures, sanctions on Russia and export quotas in China are straining refiners' ability to meet demand. China and Russia are two of the three biggest refining countries, after the United States. All three are below peak processing levels, undermining the effort by world governments to lower prices by releasing crude oil from reserves. Global refining capacity fell in 2021 by 730,000 barrels a day, the first decline in 30 years, according to the International Energy Agency. The number of barrels processed daily slumped to 78 million bpd in April, lowest since May 2021, far below the pre-pandemic average of 82.1 million bpd. Fuel stocks have fallen for seven straight quarters. So while the price of crude oil is up 51% this year, U.S. heating oil futures are up 71%, and European gasoline refining margins recently hit a record at $40 a barrel. The United States is "structurally short" on refining capacity for the first time in decades. U.S. capacity is down nearly 1 million barrels from before the pandemic to 17.9 million bpd as of February, the latest federal data available. LyondellBasell recently said it would shut its Houston plant that could process more than 280,000 bpd, citing the high cost of maintenance. Operating U.S. refiners are running full-tilt to meet demand, especially for exports, which have surged to more than 6 million bpd, a record. Capacity use currently exceeds 92%, highest seasonally since 2017. The U.S. ban on Russian imports has left refiners in the northeast United States short of feedstocks needed to make fuel. Phillips 66 has been running its 150,000-bpd catalytic cracker at its New Jersey refinery at reduced rates because it cannot source low-sulfur vacuum gasoil, Russia has idled about 30% of its refining capacity due to sanctions, according to Reuters estimates. Outages are currently about 1.5 million bpd, and 1.3 million bpd will likely stay offline through the end of 2022, China, the second-largest refiner worldwide, has added several million barrels of capacity in the last decade, but in recent months has cut production due to COVID-19 restrictions and capped exports to curb refining activity as part of an effort to cut carbon emissions. China's throughput dropped to 13.1 million bpd in April, the IEA said, down from 14.2 million bpd in 2021. Other countries are also not adding to supply. Eneos Holdings, Japan's largest refiner, does not plan to reopen recently closed refineries, a spokesperson told Reuters. Some new projects worldwide have been hit by delays. A 650,000-bpd refinery in Lagos was supposed to open by the end of 2022 but is now delayed until the end of 2023. A source with direct knowledge said the refinery has not yet hired a company to do commissioning work which will take several months. Diesel users have been squeezed, particularly in agriculture. Ukrainian farmers are short, as supply from Russia and Belarus has been cut off due to the war. Sri Lanka, which is in the midst of a fuel crisis, shut its only refinery in 2021 because it lacked sufficient foreign exchange reserves to buy imported crude. "If refineries in the U.S. get damaged during hurricane season, or anything else contributes to the market's tightness, we could be in real trouble," said a Brazilian refining executive.

Petersburg Oil Terminal completed testing of its floating oil spill containment booms -Petersburg Oil Terminal (POT) says it has successfully completed testing of its floating oil spill containment booms. Sets of booms allow for prompt isolation of oil spill areas within the terminal waters in case of emergency. The length of floating booms is 760 meters. Petersburg Oil Terminal has conducted its annual maintenance of floating booms designed for oil containment during emergency oil spills while handling crude oil/petroleum products tankers. The booms are normally anchored to seabed. When activated they come up to the surface and surround the spill area. “We have been constantly improving environmental safety of POT. Floating booms have been acknowledged to be excellent since 2018 when they were installed in the water area of the terminal. The recent inspection has confirmed the parameters declared by the manufacturer,” said POT. Total length of the boom system is 760 meters. Time needed for activation of the two lines of floating booms is 8 and 15 minutes accordingly. Remote activation of the equipment involves compressor units, air hoses and cable winches. This unique system is the longest in the North-West of Russia and in the countries of the Baltic region. Safety of the terminal is also ensured by the company’s emergency response team set up in 2018. Besides, reconstruction of the terminal is underway to replace obsolete storage facilities of the Soviet time with a modern complex for transshipment of oil products. The new facilities of the same capacity will be built with application of double-wall tank technology virtually eliminating the risk of oil spills.

Libya oil company says broken pipeline causes crude spill - ABC News -- A pipeline rupture in Libya is spewing thousands of barrels of oil into the desert, as workers scramble to seal off the leak, authorities said Wednesday. The damage to a land pipeline linking the Sarir oil field to the Tobruk terminal on the Mediterranean was the latest blow to Libya’s struggling oil industry, as renewed tensions again divide the chaos-stricken country. The Arabian Gulf Oil Company, which operates the pipeline, estimates that some 22,000 barrels a day were being lost from the leak, which started Tuesday. It posted footage of the spill and said efforts to stop it were still underway. The company, which is an affiliate of the state-run National Oil Corporation and based in the eastern city of Benghazi, blamed lack of pipeline maintenance for the leakage. The spill comes as crucial oil facilities including the country’s biggest field were still closed amid a political impasse that threatens a return of violence. Libya’s prized light crude has long featured in the North African country’s civil war, with rival militias and foreign powers jostling for control of Africa’s largest oil reserves. Libya has been wrecked by conflict since the NATO-backed uprising-turned-civil war toppled and later killed longtime dictator Moammar Gadhafi in 2011.

First barge arrives for removal works at Port of Devonport - The first barge has arrived at the Port of Devonport in preparation for the removal of two tugs which sank in a collision and have been spilling oil. The 55m-long receiving barge, the Intan, arrived at the Port of Devonport to remove the wrecks of the York Cove and Campbell Cove tugs from the Mersey River. On 28 January 2022, cement carrier Goliath collided with two berthed TasPorts tugs at the Port of Devonport — York Cove and Campbell Cove. The impact of the collision caused significant damage to the tugs, ultimately causing both vessels to sink. TasPorts responded quickly, deploying oil spill response equipment, and activating its crisis response teams. TasPorts has continued to actively monitor the incident site 24 hours a day, seven days a week since the collision, with a focus on ensuring the integrity of the oil spill containment area and the salvage of hydrocarbons from the wrecks. These activities continue to be supported by the Environmental Protection Authority (EPA). The lifts of the wrecked tugs will commence as soon as the 60m-long lifting barge, the St Vincent, arrives in Devonport from Brisbane. The St Vincent’s departure has been impacted by bad weather. The barge’s owners are waiting for a window in the weather system to start the voyage, expected to be late next week. Keeping the barge safe is of critical importance. Given its size, it has limited flexibility with respect to environmental parameters when transiting in open waters. The crane barge will pick up one tug at a time, lift them clear of the water and lower them into a specially constructed cradle on the receiving barge. The tugs will be sea fastened and transported to Bell Bay for disposal. TasPorts Chief Operating Officer, Stephen Casey, said specialist salvage divers and salvors from United Salvage, the Australian-based company appointed to recover the wrecks, had been working to prepare the tugs for lifting over many weeks. “These significant preparatory works means that the salvage operation proper can commence as soon as possible after both barges arrive at Devonport,” Mr Casey said. Mr Casey said TasPorts had been focused on removing the York Cove and Campbell Cove wrecks and returning all commercial berths at the Port of Devonport to full operations, while at the same time carefully managing environmental and maritime safety matters.

Iran says revenue from energy exports up 60% from last year — Iran’s foreign currency earnings from exports of oil, gas condensate, natural gas and petrochemicals rose more than 60% from March 21 to May 21, compared to the same period last year, the oil ministry’s official news agency, Shana, reported. Export revenues from petrochemicals increased to $2.45 billion in the first two months of the current Iranian calendar year, which started on March 21, Ali Forouzandeh, director of public relations at Iran’s oil ministry was quoted as saying. He said the figures reflected foreign currency transactions on the Central Bank of Iran’s official currency trading platform for exporters and importers, known as NIMA, according to Shana.

Iran's revenue from oil and gas exports has jumped 60% as Russia's war sends energy prices soaring -Iran has seen revenue from energy exports jump 60% year-on-year in the last two months, thanks to a sharp rise in market prices.Russian oil ministry official Ali Forouzandeh said the country is seeing a "dramatic" increase in revenues from the sales of oil and related energy products, despite the tough sanctions on the country, Shana reportedSunday.Forouzandeh told the state news agency that revenues for the first two months of the calendar year, which began March 21, were $2.45 billion. That compares with $1.5 billion in the same period a year earlier. Russia's invasion of Ukraine in late February has pushed global energy prices up sharply. The UK and US have banned oil imports from Russia. Hungary has opposed the European Union's plan to do the same, but many Western companies are "self-sanctioning."Brent crude oil, the international benchmark, traded at around $116 per barrel Monday, up roughly 50% since the start of the year.The rise in energy prices has eased some of the financial pain of sanctions slapped on Russia, and has helped Moscow generate foreign currency.It has also benefited Iran, despite its own tough Western sanctions that limit the country's ability to sell its oil. The latest sanctions were put in place by President Donald Trump, after the US pulled out of the Iran nuclear deal in 2018."The receipt of revenues from the export of oil, gas condensate, natural gas, petroleum products and petrochemical products in the first two months of this year has increased dramatically compared to the same period last year," Forouzandeh said, according to Shana.Saudi Arabia has also received a boost, with oil exports reaching a six-year high of $30 billion in March alone, according to the country's statistics office.

These charts show how Russia's invasion of Ukraine has changed global oil flows - European Union leaders reached an agreement this week to ban the majority of Russian crude oil and petroleum product imports, but nations were already shunning the country's oil, altering global flows for the commodity that powers the world.Russian oil exports had already been hurt by some EU members acting preemptively in anticipation of potential measures, in addition to bans from countries including the United States, according to commodity data firm Kpler.The amount of Russian crude oil that's "on the water" surged to nearly 80 million barrels this month, the firm noted, up from less than 30 million barrels prior to the Ukraine invasion."The rise in the volume of crude on the water is because more barrels are heading further afield —specifically to India and China," "Prior to the invasion of Ukraine, a lot more Russian crude was moving to nearby destinations in Northwest Europe instead," he added.Russia's invasion of Ukraine at the end of February has sent energy markets reeling. Russia is the largest oil and products exporter in the world, and Europe is especially dependent on Russian fuel.EU leaders had been debating a sixth round of sanctions for weeks, but a possible oil embargo became a sticking point. Hungary was among the nations that did not agree to a blanket ban. Prime Minister Viktor Orban, an ally of Russian President Vladimir Putin, said a ban on Russian energy would be an"atomic bomb" for Hungary's economy.Monday's agreement among the bloc's leaders targets Russian seaborne crude, leaving room for countries, including Hungary, to continue importing supplies via pipeline.In March, oil prices surged to the highest level since 2008 as buyers fretted over energy availability, given the market's already tight conditions. Demand has rebounded in the wake of the pandemic, while producers have kept output in check, which means prices were already rising prior to the invasion."Russia's invasion of Ukraine has sparked an unraveling of how the global market historically sourced barrels," RBC said Tuesday in a note to clients.The International Energy Agency said in March that 3 million barrels per dayof Russian oil output was at risk. Those estimates have since been revised lower, but data collected prior to the EU agreeing to ban Russian oil show that exports of Russian fuel into Northwest Europe had already fallen off a cliff.But Russian oil is still finding a buyer, at least for now, as the country's Urals crude trades at a discount to international benchmark Brent crude.More oil than ever is heading to India and China, according to data from Kpler.Wolfe Research echoed this point, saying that while Russian oil production has declined since the start of the war, exports have remained "surprisingly resilient."The firm said that Russia has rerouted exports to places including India, which shows up in vessel traffic through the Suez Canal. Analysts led by Sam Margolin noted that traffic through the key waterway is up 47% in May as compared with this time last year."Rerouting Black Sea tankers down Suez as opposed to Europe is a longer route and therefore inflationary to oil prices, and these 'last resort' trade patterns can portend bigger supply problems in the future because the market is clearly down to its last options to clear," the firm said.

OPEC+ seen sticking with supply plan even as EU sanctions Russia — The OPEC+ coalition will likely hold firm to its oil production plans this week even as the European Union moves to sanction group member Russia, delegates said. Global oil supply and demand levels remain stable, with no severe disruption yet to Russian exports, and thus require little action from the 23-nation alliance, according to the officials. With most members besides Saudi Arabia and its neighbors struggling to increase production, the group’s decisions are in any case becoming largely symbolic. Oil prices continue to climb, surpassing $124 a barrel in London on Tuesday, as the EU’s planned embargo stands to tighten a global market already squeezed by rising fuel consumption and limited supplies. The rally has fed into the inflationary pressure that threatens to tip the global economy into recession, and the cost-of-living crisis hitting consumers around the world. Spiraling costs pose a growing political risk for U.S. President Joe Biden, who has called on the Organization of Petroleum Exporting Countries to open the taps and is mulling a visit to Saudi Arabia to try and repair frayed diplomatic relations. Riyadh and its partners -- who still hold several million barrels of untapped spare capacity -- have so far remained unmoved, however. OPEC has already “done all it can” to stabilize global markets, which face no shortfall of oil, Saudi Foreign Minister Prince Faisal bin Farhan said last week at the World Economic Forum in Davos, Switzerland. Prices are being whipped up not by a shortage of crude, but a lack of refining capacity in consuming nations to produce fuels like gasoline, Saudi Energy Minister Prince Abdulaziz bin Salman said earlier this month. As a result, OPEC+ looks poised to rubber-stamp a modest increase of 430,000 barrels a day for July as the group -- in theory, at least -- revives production halted during the pandemic. Eleven out of 13 traders and analysts surveyed by Bloomberg predicted this status-quo outcome when the alliance convenes online on Thursday. In practice, most expect the group will struggle to deliver half this planned increase -- if any -- as diminished investment and political instability take a toll on the capacity of many members. Angola and Nigeria have suffered some of the most severe output setbacks.

Brent crude breaks $120 a barrel as gas prices soar --Brent crude, the international oil benchmark, has surpassed $120 a barrel, reaching a two-month hgh as gasoline and diesel fuel prices continue to rise. The U.S. oil benchmark, West Texas Intermediate, also rose, reaching more than $116 a barrel. The price spike comes at a time when demand in the United States is expected to rise with the start of the summer driving season and European leaders trying to reach agreement on a Russian oil embargo. The last time Brent crude breached $120 a barrel was in late March, shortly before President Biden authorized the release of 1 million barrels a day for a period of six months from the Strategic Petroleum Reserve. That move sent the price of Brent to as low as $98 a barrel in early April, but it has since climbed back to well over $100 a barrel. European leaders are meeting in Brussels Monday and Tuesday to negotiate a Russian oil embargo, but the talks are being held up by Hungary, a major consumer of Russian oil. Biden signed an executive order in March banning the import of Russian oil, liquefied natural gas and coal, which has contributed to higher energy prices. The national average gas price has reached $4.62 a gallon, according to AAA. The average gas price was $3.00 a gallon a year ago. Economists have attributed rising prices to rising demand and limited supply caused by loosening COVID-19 restrictions in China, the start of the U.S. driving season and disruptions caused by the war in Ukraine.

Oil prices jump after EU leaders agree to ban most Russian crude imports - Oil prices jumped after EU leaders reached an agreement late Monday to ban 90% of Russian crude by the end of the year. U.S. crude futures for July were trading just under 3% higher at $118.46 per barrel by 8 a.m. ET, while Brent crude futures were up 1.44% at $123.42. At one point, U.S. crude rose to $119.42 per barrel — a 12-week high, according to Refinitiv data. Contracts for August also traded higher: WTI crude pared some gains to trade around 3% higher at $115.63, and Brent was up 1.4% at $119.22 per barrel by 8 a.m. ET. The agreement resolves a deadlock after Hungary initially held up talks. Hungary is a major user of Russian oil and its leader, Viktor Orban, has been on friendly terms with Russia's Vladimir Putin. Charles Michel, president of the European Council, said the move would immediately hit 75% of Russian oil imports. The embargo is part of the European Union's sixth sanctions package on Russia since it invaded Ukraine. Talks to impose an oil embargo have been underway since the start of the month. "The European Council agrees that the sixth package of sanctions against Russia will cover crude oil, as well as petroleum products, delivered from Russia into Member States, with a temporary exception for crude oil delivered by pipeline," according to a May 31 statement from the European Council. The European Council added that in case of "sudden interruptions" of supply, "emergency measures" will be introduced to ensure security of supply.That temporary exception covers the remaining Russian oil not yet banned, European Commission President Ursula von der Leyen said in a press conference. "We have agreed that the Council will revert to the topic as soon as possible in one way or the other. So this is a topic where we will come back to and where we will still have to work on, but this is a big step forward, what we did today," she said, referring to the temporary exemption. Von der Leyen explained that the temporary exemption was granted so that Hungary, along with Slovakia and the Czech Republic — all connected to the southern leg of the pipeline — have access which they cannot easily replace. Roughly 36% of the EU's oil imports come from Russia, a country that plays an outsized role in global oil markets.

WTI, Brent Surge 3% After EU Agrees on Russian Oil Ban - Oil futures advanced more than 3% early Tuesday, lifting the international crude benchmark above $124 barrel (bbl) after the European Union agreed to ban all seaborne shipments of Russian crude and petroleum products until the end of the year, accounting for about 90% of all Russian oil exports to the EU.Excluded from the ban are oil shipments through the southern route of the Druzhba pipeline that delivers crude to the landlocked countries of Slovakia, Hungary and Czech Republic. Germany and Poland that receive some of their oil from the northern route of the Druzhba said they have agreed to halt those shipments until the end of the year as a response to Russia's continued aggression in the Ukraine."This immediately covers more than 2/3 of oil imports from Russia, cutting a huge source of financing for its war machine," tweeted President of the European Council Charles Michael. About 2.3 million barrels per day (bpd) of Russian crude and 1.2 million bpd of petroleum products head west through a network of pipelines and ports. Redirecting those flows would be a massive undertaking on the part of Moscow, with analysts now calling for a deeper disruption to Russian oil production this year. International Energy Agency previously forecasted Russia's output could drop as much as 3 million bpd in the second half of the year.Interestingly, some Russian oil executives called on the government of President Vladimir Putin to announce mandatory cuts to oil production in a move that would raise prices further to avoid selling barrels at a discount. Leonid Fedun, vice president of Russian oil company Lukoil said Russia should cut oil production by 20% to 30% this year to 7 million to 8 million bpd to "stay in the business."Based on Bloomberg calculations, Russia's current production is below 10 million bpd at around 9.16 million bpd, and more than 1 million bpd below its quota under an OPEC+ production agreement. IEA Executive Director Fatih Birol said this morning the energy crisis is much bigger than the 1970s oil shocks, and that he expects it to last longer. The Russian oil embargo also heightened concerns over inflation and potential recession across the 27-nation economic bloc. Inflation in the Eurozone surged to a new record high 8.1% in the 12-month period ending in May, up from 7.4% in April and well ahead of analyst forecasts for a rate of 7.7%. The development had been expected after Germany, Spain, and Belgium all reported above-consensus figures Monday. Germany showed a 7.9% spike in consumer prices from a year earlier compared with 7.4% reported in April. Near 7:30 a.m. EDT, U.S. crude benchmark for July delivery rallied $2.83 to trade near a $118.39 barrel (bbl) after trading at a nearly three-month high at $119.43. ICE Brent July futures advanced $2.24 to $121.67 bbl ahead of its expiration this afternoon while rallying to a $124.10 nearly three-month high, with the August contract trading at a $4 bbl discount to the expiring contract. NYMEX RBOB June futures traded at a record high $4.1930 ahead of expiration, with the July contract trading at an 11-cent discount. NYMEX June ULSD futures surged 20.87 cents to $4.2116 gallon, with the next-month ULSD contact trading near $4.1332 gallon.

Oil prices jump after EU leaders agree to ban most Russian crude imports Oil prices surged on Tuesday after EU leaders reached an agreement to ban 90% of Russian crude by the end of the year. However, prices reversed course around 2 p.m. ET Tuesday following a report from The Wall Street Journal that OPEC is considering suspending Russia from the group's output agreement."It could certainly facilitate an early end to the current production agreement and a Saudi/UAE ramp up," said Helima Croft, managing director and head of global commodity strategy at RBC. "However in most cases it is the actual stressed producer that asks for the exemption. An involuntary exemption might mean the breakup of OPEC+," she added.U.S. crude futures ended the day 40 cents, or 0.35%, lower at $114.67 per barrel. Earlier in the session it traded as high as $119.43, a price last seen in early March.Brent crude futures last traded 1% higher at $112.84 per barrel.Oil's jump earlier in the session came after the EU's agreement on an oil embargo, following weeks of deadlock after Hungary initially held up talks. Hungary is a major user of Russian oil and its leader, Viktor Orban, has been on friendly terms with Russia's Vladimir Putin.Charles Michel, president of the European Council, said the move would immediately hit 75% of Russian oil imports.The embargo is part of the European Union's sixth sanctions package on Russia since it invaded Ukraine. Talks to impose an oil embargo have been underway since the start of the month."The European Council agrees that the sixth package of sanctions against Russia will cover crude oil, as well as petroleum products, delivered from Russia into Member States, with a temporary exception for crude oil delivered by pipeline," according to a May 31 statement from the European Council.The European Council added that in case of "sudden interruptions" of supply, "emergency measures" will be introduced to ensure security of supply. That temporary exception covers the remaining Russian oil not yet banned, European Commission President Ursula von der Leyen said in a press conference. "We have agreed that the Council will revert to the topic as soon as possible in one way or the other. So this is a topic where we will come back to and where we will still have to work on, but this is a big step forward, what we did today," she said, referring to the temporary exemption. Von der Leyen explained that the temporary exemption was granted so that Hungary, along with Slovakia and the Czech Republic — all connected to the southern leg of the pipeline — have access which they cannot easily replace. Roughly 36% of the EU's oil imports come from Russia, a country that plays an outsized role in global oil markets.

JPM Sees Oil Rising Up To $136 This Month Depending On What China Does, As Trader Bets Millions On Crude Explosion To $200 - When it comes to forecasts for the price of oil, two distinct camps have emerged on Wall Street. In one, we have Citi, whose chief commodity strategist, Ed Morse, has been pounding the table calling for lower oil and most recently telling BBG TV that the fair value of Brent futures is in the $70 range even though the international benchmark is trading around $120 a barrel. Needless to say, Morse has been dead wrong so far, and anyone who listened to him has suffered catastrophic losses on the short side, although maybe he will be correct in the end: his forecast is predicated on unprecedented demand destruction, with Citi cutting its demand estimate for products to 2.2 million barrels a day, down from 3.6 million barrels at the start of the year. Alas, despite record prices for every energy product, there has so far been zero demand destruction as even Bloomberg's resident in-house commodity expert Javier Blas pointed out earlier today. In the other corner, we have pretty much everyone else, including such commodity bulls as Goldman and JPMorgan, the latter of which just published a note (available to ZH pro subs in the usual place), in which the bank's oil analyst, Natasha Kaneva, writes that while the recent decision by the EU to ban Russian oil as part of its sixth package of sanctions, sent the price of oil to the highest level in two months, "where prices go from here will depend on whether Russia can divert its oil to China." According to JPM, Russia has so far been able to find plenty of willing buyers for its deeply discounted crude oil, and has so far not only been able to fully offset the 0.7 mbd crude export loss to its traditional customers in the US and Europe, but has managed to sell an additional 1.4 mbd to Asia buyers! Accordingly, Russian oil production has stabilized, and after averaging about 1 mbd lower in April, it has increased 200-300 kbd MoM in May, with more volumes expected to be restored next month. While India has been snapping up distressed crude cargoes from Russia to feed its giant refining complexes, the increase to China, the world’s biggest importer, has been more modest—just 165 kbd—and has come chiefly from Eastern Russia ports rather than Russia’s Baltic and Black Sea ports which traditionally fed into Europe. India’s daily shipments from Russia have surged from zero in the weeks prior to the invasion to 953 kbd in April and have come from Western Russia ports, replacing some European demand.What does that mean for the price of oil? Well, according to JPM, given time, and given large discounts to encourage exports to Asia, Russia will be able to redirect most of its exports and peg maximum impact on Russian production at 1.5 mbd (Exhibit 1). As such, the bank maintains its Brent price forecast of $114/bbl for 2Q22, with a peak month average of $122/bbl in June and averaging $104/bbl for 2022. For its view to materialize, the largest US commercial bank assumes India’s purchases of Russian crude will stabilize at a pace of around 500 kbd, and that, as Chinese demand recovers from nearly two months of COVID lockdowns, China would add another 1 mbd to its crude imports of Russian origin.

Oil group OPEC+ reportedly considering suspending Russia from supply deal - Some members of the energy alliance OPEC+ are considering whether to suspend Russia from an oil production deal, The Wall Street Journal reported, citing unnamed OPEC delegates.The news, reported Tuesday, comes at a time when non-OPEC leader Russia, a major player in global energy markets, faces a barrage of Western sanctions and a partial oil ban from the European Union in the wake of the onslaught in Ukraine.OPEC delegates are reportedly concerned about the growing economic pressure on Russia and its ability to pump more crude to cool soaring prices.CNBC has contacted OPEC and a spokesperson for Russia's Energy Ministry and for comment.OPEC and non-OPEC countries are scheduled to discuss the next phase of production policy on Thursday.Oil prices on Tuesday turned negative on the news.International benchmark Brent crude futures rebounded on Wednesday morning, trading up 1.3% at $117.14 a barrel. U.S. West Texas Intermediatefutures rose 1.4% to trade at $116.35 during midmorning deals in London.Read the full Wall Street Journal article here.

No, OPEC+ Isn't About To Break Up And No, Saudis Aren't About To Pump More Crude --Yesterday oil tumbled because, as Bloomberg put it, among the many reverberations from Russia’s invasion of Ukraine another might be an early end to OPEC+'s oil supply pact. The 23-nation alliance, led by Saudi Arabia and Russia, is due to finish restoring production halted during the pandemic by the end of September, but the Wall Street Journal reported - in a report that has not been confirmed anywhere else - that OPEC is contemplating suspending Russia from the coalition’s quota system, as sanctions prevent Moscow from increasing output. The Saudis and the United Arab Emirates might fill the resulting supply gap, the WSJ said, potentially setting in motion a breakdown of the alliance. And even though oil prices slumped following the report, ignoring Europe's all too real (if rather delayed) embargo on Russian oil and focusing on hope that we may get a few hundred thousand extra barrels of Saudi oil supply, none of what the WSJ reported is going to happen, and as Bloomberg's Grant Smith writes this morning, when OPEC+ gathers tomorrow, the agenda will more likely be business as usual.For those who missed it, the WSJ reported that Saudi Arabia and the UAE could fill Russia’s unused quotas, helping to tame inflation and earning President Biden’s appreciation in the process.Well, don't hold your breath: as Smith correctly notes, such a move would be a grave step, rupturing ties between the Gulf nations and the Kremlin and risking the disintegration of the whole OPEC+ network. Delegates across the group don’t consider that imminent... or even realistic.Yes, there are some - such as RBC's Helima Croft - who point out that the Biden administration has been intensifying its diplomatic push to get Riyadh to open the taps, and one option we could see in coming weeks or months is that the kingdom speeds up the return of barrels still offline since the pandemic. But even if such an improbable deal is struck -- and there’s no guarantee it will be, after all the last time Biden called the Saudis, nobody picked up the phone -- it’s too far off to affect deliberations when the OPEC and its partners meet tomorrow. As a result, they’re likely to stick with the script and rubber-stamp another modest supply increase for July.Meanwhile, cementing ties between Moscow and Riyadh, on Wednesday, Russia said Saudi Arabia hailed their oil-market cooperation in the OPEC+ alliance as Foreign Minister Sergei Lavrov visited the kingdom for talks with Gulf officials. The trip comes as Moscow faces growing pressure from the US and its allies over its invasion of Ukraine. Yet despite western pressure, oil-exporting Gulf nations have maintained close ties with Moscow and have ignored sanctions imposed by the US and its allies.Lavrov and his Saudi counterpart, Prince Faisal bin Farhan, “praised the level of cooperation in the OPEC+ format,” the Foreign Ministry in Moscow said in a statement. “They noted the stabilizing effect that tight coordination between Russia and Saudi Arabia in this strategically important area has on the global hydrocarbon market.”

Lavrov Hails OPEC+ Cooperation Russia said Saudi Arabia hailed their oil-market cooperation in the OPEC+ alliance as Foreign Minister Sergei Lavrov visited the kingdom for talks with Gulf officials. The trip comes as Moscow faces growing pressure from the US and its allies over its invasion of Ukraine. Oil-exporting Gulf nations have maintained ties with Moscow and haven’t joined in the sanctions imposed by the US and its allies. Lavrov and his Saudi counterpart, Prince Faisal bin Farhan, “praised the level of cooperation in the OPEC+ format,” the Foreign Ministry in Moscow said in a statement. “They noted the stabilizing effect that tight coordination between Russia and Saudi Arabia in this strategically important area has on the global hydrocarbon market.” Saudi Arabia’s state-run news agency reported the meeting but did not provide a detailed readout. The meeting comes as the European Union this week approved a plan to curtail Russian oil exports to the bloc, ratcheting up sanctions against the Kremlin over President Vladimir Putin’s invasion of Ukraine. Lavrov is scheduled to meet Thursday with his counterparts from around the region at a meeting of the six-nation Gulf Cooperation Council in Riyadh. The GCC includes major OPEC members aside from Saudi Arabia, including the United Arab Emirates and Kuwait. OPEC+ is due to finish restoring production halted during the pandemic by the end of September. But with Russian exports threatened by sanctions, Riyadh could bring back the barrels earlier than scheduled, RBC Capital Markets LLC predicts. The Wall Street Journal reported earlier that OPEC is contemplating an even more radical option: suspending Russia from the coalition’s quota system, as sanctions prevent Moscow from increasing output. Saudi Arabia and the United Arab Emirates would fill the resulting supply gap, the WSJ said.

WTI Holds At Day's Low After Crude Inventory Draw -Oil prices pumped (after OPEC+ rejected WSJ's comments on Russia yesterday and cut its estimate for global year-end over-supply) and dumped to end the day near their lows after the Biden administration said it still hopes to engage with Saudi Arabia. Markets took the headline as a concrete step by the administration to actively fight energy costs, traders said.“Meaningful progress probably takes time to come to fruition but headlines around progress will keep some sort of a governor on crude rallies,” said Rebecca Babin, senior energy trader at CIBC Private Wealth Management Traders were predicting a drop in crude oil inventories, but an increase in gasoline and distillate stockpiles.API

• Crude -1.181mm (-67k exp)
• Cushing +177k
• Gasoline -256k
• Distillates +858k

US crude stocks fell for the 3rd straight week, with a bigger than expected draw last week. Interestingly,. Distillates saw their 3rd straight weekly build...WTI was hovering around $114.75 ahead of the API print, unchanged on the day and didn't move after the data hit. “Oil markets are a dead cert to tighten further following EU’s ban on Russian oil,” PVM Oil Associates analyst Stephen Brennock said in a note. “This, in turn, should ensure further upside in oil prices in the second half of this year. The Russian oil embargo is finally over the line, but more price pain is on the horizon for the EU and its Western partners”The 3-2-1 crack, which approximates turning crude into gasoline and diesel, soared to a new record high of $55.26 today...

Oil Gains After EU, UK Slap Insurance Ban on Russian Oil - Oil futures nearest delivery on the New York Mercantile Exchange and Brent crude traded on the Intercontinental Exchange settled the first trading session of June higher, underpinned by an announcement from the European Union to embargo Russian seaborne oil imports joined by a U.K. ban on providing insurance for waterborne Russian oil cargoes in a move that further limits Moscow's ability to circumvent Western sanctions despite an increasingly tightening global oil market. The United Kingdom and EU have agreed on a coordinated ban to ensure ships carrying Russian oil would be denied insurance coverage from London-based Lloyds, exposing shippers to major losses should they continue to carry Russian oil. The London based insurance giant represents roughly 90% of the global insurance market for shippers, leaving Moscow no alternative but to look for smaller and less developed markets to insure Russian oil cargoes. Russia is the world's largest exporter of petroleum products and the second largest crude oil exporter behind only Saudi Arabia. According to International Energy Agency, Russia exported 7.8 million barrels per day (bpd) of oil and refined products in December 2021, of which crude and condensate accounted for 5 million bpd and oil products accounted for about 2.85 million bpd. The insurance ban would surely have a crippling effect on Russia's oil industry, with analysts estimating the country's oil production already plunged below 10 million bpd in early May from 11.3 million bpd in January. Faced with those headwinds, OPEC+ is reportedly considering an exemption for Russia from an oil production agreement that is unwinding steep production cuts made in April 2020 in gradual monthly installments. Russia has missed its production targets for several months now, with the latest data indicating the country's output is close to 9.7 million bpd -- some 1 million bpd below its allotted quota. "It does not make sense to make them stick to a quota," said one OPEC delegate. Reports of a possible exemption for Russia raised speculation other OPEC+ countries could increase production more aggressively in coming months to offset the loss of Russian barrels on the global market. However, Saudi Arabia, the de facto leader of the cartel, has repeatedly stressed that the group's spare capacity is limited, estimating it at just 2 million bpd. Spare capacity is the amount of untapped production that can be quickly turned on. "You need a resilient and strong spare capacity to make sure that you can absorb any supply shocks," Nasser said last week. At settlement, NYMEX West Texas Intermediate for July delivery gained $0.59 to $115.26 bbl, with the new front-month Brent contract advancing $0.69 to $116.29 bbl. NYMEX RBOB July futures rallied 15.54 cents to $4.0716 gallon and the July ULSD contract surged more than 20 cents to $4.1433 gallon.

Crude oil futures plummet amid reports of extra Saudi supply ahead of OPEC meeting Crude oil futures were sharply lower in mid-morning Asian trade June 2 amid reports that some OPEC producers were prepared to raise output beyond their pledged quotas as the wider OPEC+ group prepares to convene later in the day. At 11:04 am Singapore time (0304 GMT), the ICE August Brent futures contract was down $2.26/b (1.94%) from the previous close at $114.03/b, while the NYMEX July light sweet crude contract fell $2.45/b (2.13%) at $112.81/b. Media reports indicated that Saudi Arabia has told Western leaders that the country is prepared to raise output beyond its pledged quota to make up for the shortfall in Russian supply. This follows on from reports earlier in the week that OPEC delegates were discussing exempting Russia from OPEC+ production quotas, which could potentially pave the way for other members to further raise output. "It seems the ground is being laid for Saudi Arabia and the United Arab Emirates to ramp up production to take the heat out of oil prices," OANDA Senior Market Analyst Jeffrey Halley told S&P Global Commodity Insights. "There could be some back room deals being cut between Saudi/UAE and the US," said Halley, citing extra political impetus from US President Joe Biden due to soaring gasoline prices ahead of the mid-term elections and high oil prices aiding Russia's finances. "This afternoon's OPEC+ meeting is shaping up to be a pivotal event of the week, maybe even the year," he added. The front-month ICE Brent crude marker had plunged by as much as 3% in early-morning trade in response to the reports, though as it has recouped some of its losses since then. While many OPEC producers face difficulties in raising output due to domestic turmoil or lack of investment, analysts noted that several members such as Saudi Arabia or the United Arab Emirates nonetheless still have untapped spare capacity. Oil prices also remained at the mercy of sentiments in the broader financial markets, which have been buffeted in recent days by fresh concerns about a global recession amid a worsening outlook from the US Federal Reserve and bearish comments from Wall Street executives. Dubai crude swaps and intermonth spreads were lower in mid-morning trade in Asia June 2 from the previous close. The August Dubai swap was pegged at $102.89/b at 10 am Singapore time (0200 GMT), down $2.34/b (2.22%) from the June 1 Asian market close. The July-August Dubai swap intermonth spread was pegged at $2.59/b at 10 am, down 30 cents/b over the same period, and the August-September intermonth spread was pegged at $1.96/b, down 33 cents/b. The August Brent/Dubai EFS was pegged at $10.80/b, down $1.09/b.

Oil prices slide after report Saudi Arabia could step up if Russian output dips under sanctions -- OPEC and its oil-producing allies agreed on Thursday to hike output in July and August by a larger-than-expected amount as Russia's invasion of Ukraine wreaks havoc on global energy markets. OPEC+ will increase production by 648,000 barrels per day in both July and August, bringing forward the end of the historic output cuts OPEC+ implemented during the throes of the Covid pandemic. The group has been slowly returning the nearly 10 million barrels per day it agreed to pull from the market in April 2020. In recent months, production has risen between 400,000 and 432,000 barrels per day each month. Oil prices reversed early losses during mid-morning trading, and continued to move higher during the session. By 12 p.m. on Wall Street West Texas Intermediate crude futures, the U.S. oil benchmark, stood 1.3% higher at $116.80 per barrel. International benchmark Brent crude added 1% to trade at $117.53. The decision comes as the world grapples with surging energy prices. Governments, including the Biden administration, have been calling on producers to raise output in an effort to dampen oil's wild ride. White House press secretary Karine Jean-Pierre said the administration welcomed OPEC+'s announcement. "We recognize the role of Saudi Arabia as the chair of OPEC+ and its largest producer in achieving this consensus amongst the group members," she said in a statement, before adding that the "United States will continue to use all tools at [its] disposal to address energy prices pressures." While in theory output will be higher looking forward, OPEC+ has been struggling to meet production quotas. Moreover, the additional barrels slated to hit the market will not make up for the potential loss of more than 1 million barrels per day from Russia as nations around the world ramp up sanctions following the invasion of Ukraine. EU leaders on Monday agreed to ban 90% of Russian crude by the end of the year as part of the bloc's sixth sanctions package on Russia since the late February invasion. In March, crude hit the highest since 2008, and has stayed firmly above $100. The rapid rise is a major contributor to decades-high inflation being seen across economies. On Thursday the national average for a regular gallon of gasoline in the U.S. hit another record high of $4.71. Oil prices had moved lower earlier in the session following a report from the Financial Times, citing sources, that Saudi Arabia was aware of the risks of a supply shortage and that it is "not in their interests to lose control of oil prices." Sources told the FT that Saudi Arabia, OPEC's de facto leader, has not yet seen genuine shortages in the oil markets. But that situation could change as global economies reopen amid the pandemic recovery, driving higher demand for crude. China, the world's largest oil importer, is starting to ease restrictions as daily Covid cases taper off. "Whilst it's not an outright promise, Saudi Arabia [has] seemingly thrown the West a bone,"

Oil Jumps After OPEC+ Agrees To Boost Output By 648K Barrels - After just 11 minutes, a new record for brevity, the OPEC+ minister meeting ended and as noted earlier, concluded by agreeing to a 648K increase for both July and August, the first time that OPEC+ has deviated from its standard monthly increase of 432K since the increments were started last summer. The decision will accelerate the completion of OPEC's reversal of several years of output cuts a month earlier than planned. In the grand scheme of things, the 200K or so increase in output does nothing. Furthermore, as Bloomberg notes, any bigger increase will be shared pro-rata by all participants which is "going to eat into the volume actually delivered by quite a bit."The decision means that Saudi Arabia has finally agreed to Biden's constant pleading for extra barrels, as the president seeks help with runaway crude prices -- and to fill the impending supply gap, not to mention the rapidly depleting US strategist petroleum reserve.According to Bloomberg, the deal would mean Saudi production goes higher earlier than scheduled - with output at 10.957 million barrels a day in August. If demand is continuing to bounce back and sanctions are taking a further toll on Russian exports, will we see the kingdom above 11 million before the summer is over? And how long before Saudis Arabia can't pump any more at a time of peak demand, and a US SPR draining at 1mmb/d. What everyone is asking for! The new quota table ! #OOTT #opec pic.twitter.com/SkITTarZjV The reality is that the actual production delivered to the market will inevitably be much smaller than advertised: As most OPEC+ members are unable to increase output, any additional barrels will need to come from Saudi Arabia, the UAE and Iraq. How much relief consumers feel at the pump is an open question. Judging by the surge in oil prices, not much. More importantly, the strong consensus by all participants confirms that OPEC+ is nowhere near breaking apart, an outcome that would have been catastrophic for oil. As a result, oil has popped to session highs, trading in the mid-$115, and erasing all post FT-article losses.

WTI Extends Gains After Bigger Than Expected Crude Draw - Oil prices are surging higher this morning, erasing overnight losses, despite OPEC+ hiking output (celebrated by The White House) as the 'hope' that the rumors around Russian exemptions from the last couple of days might lead to an OPEC breakup have been been smashed on the shores of reality. It appears the Saudis promised just enough to offer an olive branch for Biden ahead of his visit to The Kingdom but not enough to prompt any impact on the global supply tightness.“This is a pretty minor tweak, but it is a nod toward looming tight balances later this year when the EU sanctions on Russia start having an impact,” said Bill Farren-Price, a director at Enverus Intelligence Research. “The question is whether there is any more in the OPEC tank?”Additionally, as Bloomberg reports, the output increase will be divided proportionally between members in the usual way. Countries that have been unable to raise production, such as Angola, Nigeria and most recently Russia, would still be allocated a higher quota. That could mean that the actual supply boost is smaller than the official figure, as has often been the case in recent months. For now, all eyes are on gasoline data for any signs of demand destruction. DOE

• Crude -5.068mm
• Cushing +245k
• Gasoline -711k
• Distillates -529k

The official DOE data showed crude stocks plunged far more than API reported, drawing down 5.07mm barrels last week...The headline draw in crude stockpiles of 5.4 million barrels was boosted by the withdrawal of more than 5 million barrels of crude from the Strategic Petroleum Reserve last week. Total nationwide crude inventories (including commercial stockpiles and oil held in the SPR) fell by 10.5 million barrels in the week to May 27.

Oil Rallies as OPEC+ New Quotas Disappoint, US Stocks Fall - Oil futures nearest delivery on the New York Mercantile Exchange and Brent crude traded on the Intercontinental Exchange powered higher on Thursday, lifting RBOB futures to a fresh record-high settlement. Futures were spurred by larger-than-expected draws from U.S. oil and petroleum products stocks during the final week of May, while the decision by OPEC+ to increase its production rate by a modest margin this summer failed to relieve concerns over a structural supply shortfall on the global oil market. OPEC+ oil ministers agreed on Thursday to raise their collective oil production for July and August by 648,000 barrels per day (bpd), 216,000 bpd above monthly targets that were planned for this summer. According to OPEC+ delegates, the production increase was made to cover for demand growth this summer rather than to fill in for the loss of Russian oil output. Even though the output hike is larger-than-expected, there is a healthy degree of skepticism in the market as to whether increasing production is possible, with several OPEC+ countries having consistently missed their output targets in recent months. Saudi Arabia and the United Arab Emirates are believed to be the only two members that have enough spare capacity to boost output. On one hand, the decision might suggest Saudi Arabia and the UAE have acknowledged calls from Western nations to deliver more barrels to the market. On the other, it does little to heal a long-term supply shortfall exacerbated by Western sanctions on Russia. As much as 3 million barrels in Russia's daily oil exports are currently at stake as European Union tightens the screws on the Russian oil industry in response to Moscow's aggression in Ukraine. Russia is the world's largest exporter of petroleum products and the second-largest crude oil exporter behind only Saudi Arabia. According to International Energy Agency, Russia exported 7.8 million barrels per day (bpd) of oil and refined products in December 2021, of which crude and condensate accounted for 5 million bpd and oil products accounted for about 2.85 million bpd. Further supporting the oil complex, U.S. Energy Information Administration late morning reported domestic commercial crude oil inventories declined by a massive 5.1 million bbl last week, well above calls for a 500,000-bbl draw. Refiners, meanwhile, processed 236,000 bpd less crude compared to the previous week at 16.03 million bpd. Lower refinery activity came as demand for refined fuels picked up in the final week of May, with gasoline demand in the United States climbing to the second-highest weekly rate this year at 8.977 million bpd. Demand for distillate fuels also edged higher to 3.969 million bpd, up 102,000 bpd. As a result, distillate inventories declined by 529,000 bpd from the previous week to a 17-year low 106.4 million bbl, some 24% below the five-year average. Gasoline inventories also dropped by a larger-than-expected 711,000 bbl to 219 million bbl and are about 9% below the five-year average. At settlement, NYMEX West Texas Intermediate for July delivery rallied $1.61 to $116.87 per bbl, and ICE August Brent futures advanced $1.32 to $117.81 per bbl. NYMEX RBOB July futures surged 11.93 cents to $4.1909 per gallon, and the July ULSD contract rallied to $4.2084 per gallon.

Oil set for sixth weekly gain as OPEC+ supply boost disappoints – Oil headed for a sixth weekly advance after a keenly anticipated OPEC+ meeting delivered only a modest increase in output that failed to assuage concerns over a widening supply deficit. The producer cartel agreed to a hike that amounts to just 0.4 percent of global demand over July and August. There had been speculation the Saudis were preparing to pump significantly more as part of a reset of relations with the US, and there were even suggestions that Russia might be exempted from the alliance’s monthly supply agreements. That didn’t happen, with West Texas Intermediate closing up 1.4 percent after the decision and trading near $117 a barrel in Asia on Friday. A six-month long rally in the US benchmark—the longest such run in more than a decade—now looks set to continue. A report showing American crude stockpiles falling more than twice as much as expected last week at the start of the summer driving season highlighted the growing supply deficit. OPEC+ agreed to production hikes of 648,000 barrels a day for July and August, about 50 percent larger than the increases seen in recent months. The decision came after the European Union approved a partial ban on Russian oil imports and after months of pressure by Washington on Saudi Arabia. There were doubts the group would be able to fully deliver on the pledged increases, given they will be spread across its members, many of whom have struggled to raise output. The decision by OPEC+ could, in practice, mean 132,000 barrels a day each month of actual additional output from Saudi Arabia, the United Arab Emirates, Kuwait, and Iraq, Citigroup Inc. said in a note. Prices have been marching higher in the past week as markets assessed the EU move, Chinese lockdowns were lifted and the US summer driving season got underway, it said. “The agreed supply increases look big on paper, but in reality it is very unlikely the group will manage to hit these production targets,” “Russian output is likely to edge lower in the months ahead as sanctions bite, while there’s limited spare capacity among other members.” ING’s forecast for Brent to average $122 a barrel over the second half remains unchanged, he said. Oil has been driven higher this year on rebounding demand as countries threw off virus restrictions, while Russia’s invasion of Ukraine has reduced supply from one of the world’s three-biggest producers. A potential resurgence in consumption in China, the world’s biggest crude importer, is now threatening to add even more upward pressure to prices. The ramp up in OPEC+ supply wouldn’t be enough to balance a market that’s shifting into deficit due to the demand recovery in China, Goldman Sachs Group Inc. said in a note. The bank said its expectations for output from the alliance are skewed to the downside, given the European ban on Russian imports and a lack of progress on negotiations with Iran. It reiterated its forecast for Brent to average $125 a barrel in the second half. The OPEC+ announcement also didn’t have much impact on oil’s market structure. Brent’s prompt timespread was $2.62 a barrel in backwardation—a bullish pattern where near term prices are higher than those further out—compared with $2.73 at the close on Wednesday. US crude stockpiles fell around 5.1 million barrels last week, more than the median estimate for a decline of 2.1 million barrels, according to an Energy Information Administration report Thursday. New York-area gasoline stockpiles dropped to the lowest level since 2017.

WTI, Brent Advance on China's Reopening, EU Oil Embargo -- Oil futures rallied more than 2% on Friday, with all petroleum contracts posting a seventh consecutive week of steep gains. The gains were spearheaded by China's reopening from draconian lockdowns that strangled its economy for three months and a European Union embargo on Russian oil imports joined with a sweeping ban on insurance coverage for waterborne Russian oil and petroleum products globally. Even news OPEC+ agreed to raise oil production by a larger-than-expected 648,000 barrels per day (bpd) in July and August had a short-lived impact on prices, with both crude benchmarks finishing a volatile week as much as 3% higher. NYMEX West Texas Intermediate for July delivery settled Friday's session at $118.87 per bbl, up $2, with the international crude benchmark Brent contract rallying $2.11 to $119.72 per bbl, with gains accelerating post-settlement. The advance by refined products futures once again outpaced those for the crude complex, with nearby-delivery month RBOB settling the session 6.13 cents higher at a fresh record-high $4.2522 per gallon, and ULSD July futures rallied 7.19 cents or 3.16% to $4.2803 per gallon. Lending upside price pressure for oil products, U.S. Energy Information Administration in its weekly inventory report released Thursday showed a larger-than-expected draw from gasoline and distillate stocks as demand for motor gasoline roared higher. U.S. distillate inventories now stand at their lowest level in 17 years at 106.4 million barrels (bbl), and some 24% below the five-year average. Gasoline inventories also dropped to 219 million bbl and are about 9% below the five-year average. Crude futures also found buying support after EIA reported U.S. commercial crude oil inventories plunged by a massive 5.1 million bbl from the previous week to 15% below the five-year average at 414.7 million bbl compared with expectations for stockpiles to have shed just 500,000 bbl, with the large draw exacerbating concerns over a broadening supply shortfall heading into the summer. Underlining gains in the oil complex this week are two bullish developments that, combined, will likely send prices even higher in the summer months. First, while the agreed-to phased-in EU embargo on Russian oil and products, which joins sanctions by the United States, Canada and United Kingdom, restricts where Moscow can sell its oil, the insurance ban by EU and UK is likely to bite harder. Lloyd's of London covers as much as 90% of waterborne oil deliveries, greatly limiting where Russia and shippers willing to ship Russian oil can turn to for essential liability coverage. As much as 3 million bpd of Russian oil exports could be lost to the global oil market. In Asia, China finally took the initial steps to ease its three-month lockdown in Shanghai, a city of 25 million people, and removed some COVID controls in its capital Beijing. Both megacities allowed for free movement of people and public transport, while also authorizing factories in low-risk areas to operate at 90% of capacity. The encouraging developments fueled investor hopes that the worst of the COVID restrictions that ravaged the regional economies is now over and would lead to a gradual path toward a sustainable reopening.

OPEC+ has ‘kind of broken down’ as Russia loses relevance and group faces tight spare capacity - OPEC+ has "kind of broken down," the lead analyst of an oil research firm said after oil prices rose despite the alliance announcing that it would increase supply more quickly.OPEC and its allies decided to take nearly 10 million barrels off the oil market in 2020 when Covid first hit and demand evaporated.The alliance on Thursday said it would increase production by 648,000 barrels per day in July and August to bring output cuts to an end earlier than previously agreed.Both West Texas Intermediate crude futures and international benchmark Brent crude settled more than 1% higher after the news.The problem is that countries in the OPEC+ alliance have not been meeting their targets, ."The whole system of OPEC has kind of broken down right now," he told CNBC's "Squawk Box Asia" on Friday. OPEC typically can influence oil prices by controlling its output, but Sankey said the market sees oil supply issues persisting despite the announcement. Only two or three countries in OPEC have spare capacity, he said.Saudi Arabia, the kingpin in OPEC and the world's second-largest oil producer, has about a million barrels per day of extra production capacity, but doesn't want to use all of it, said Sankey."Saudi has to make a choice — do we let the price go higher while maintaining a super emergency, super crisis level of spare capacity?" he asked. "Or do we add oil into the market and go to effectively almost zero spare capacity, and then what happens if Libya goes down?"A political deadlock in Libya has led to a partial blockade of oil facilities,Reuters reported in May.The new quota also includes Russian production, which has been constrained by sanctions because of the war in Ukraine, he said. Russian oil output will slowly decline "by default.""It'll become less relevant in this cartel group as Europe and the rest of the world starts to sanction Russia,"

Rapidly Decaying Supertanker Could Explode at Any Time - A rapidly decaying supertanker in the Red Sea could explode at any time, a joint statement from representatives of the U.S. and Netherlands governments has warned. “The Safer is a rapidly decaying and unstable supertanker that contains four times the amount of oil spilled by the Exxon Valdez,” the statement, which was published on the U.S. Department of State’s website late last week, noted. “It could leak, spill, or explode at any time, severely disrupting shipping routes in the Gulf region and other industries across the Red Sea region, unleashing an environmental disaster, and worsening the humanitarian crisis in Yemen,” the statement added. Representatives of the governments of the United States and the Netherlands have partnered to support the UN efforts to address and avert the economic, environmental, and humanitarian threats posed by the Safer oil tanker, the Department of State noted on its site. Last Friday, the Dutch Ambassador to the United States, André Haspels, hosted a meeting joined by U.S. Special Envoy Lenderking, Yemeni Ambassador to the United States Mohammed al-Hadrami, and representatives from the diplomatic community in Washington, D.C., according to the joint statement. They are said to have stressed the importance of raising $144 million to fund the UN’s operational plan, which includes $80 million for an emergency operation to offload the oil from the Safer to a temporary vessel, the statement highlighted. At the pledging event co-hosted by the UN and the Netherlands earlier this month, nearly half the funds required for the emergency operation were raised, but more is urgently needed to move forward, the statement warned. Back in April, U.S. Special Envoy for Yemen Tim Lenderking and Dutch Ambassador to Yemen Peter Derrek Hof joined UN Resident and Humanitarian Coordinator for Yemen David Gressly on a regional trip in the Gulf to increase awareness of the imminent risks the Safer poses to the entire region, the statement outlined. r Due to the ongoing conflict in Yemen, all production and export operations related to the floating storage and offloading (FSO) Safer vessel have been suspended, but nearly 1.1 million barrels of crude oil is estimated to remain onboard, according to an International Maritime Organization (IMO) focus page on the vessel, which was last updated on May 20. The FSO has not been inspected or maintained since 2015 and has been out of class since 2016, leading to serious concerns about its integrity, the focus page notes. It is understood there is currently no oil leaking from the unit, but it is considered that the risk of an oil spill from the FSO Safer is increasing as its structure, equipment and operating systems continue to deteriorate, the focus page adds. “The main risks associated with the FSO are the possible structural failure of the unit due to the lack of maintenance that could result in a leak from storage tanks due to a fracture forming on the hull or as a large release due to an explosion from the build-up of flammable gases,” the IMO page states. “The situation is particularly complex due to conflict in the region and the ongoing Covid-19 pandemic,” the page adds.

Congress begins effort to end US role in Yemen war - Amazingly, after nearly eight years of relentless war, the U.N.-negotiated ceasefire has held up in Yemen for the last two months. As the U.N. Special Envoy begins his effort to extend this temporary truce into a longer-term deescalation, Congress once again has the opportunity to retake its war powers authority and provide the president with a tool to end U.S. involvement. Today, a bipartisan group of House lawmakers, led by Congressional Progressive Caucus Chair Rep. Pramila Jayapal (D-Wash.) and Rep. Peter DeFazio (D-Ore.), introduced a measure to invoke Congress’s war powers “to end unauthorized United States military involvement in Saudi Arabia’s brutal war in Yemen.” Sen. Bernie Sanders will introduce a companion bill when the Senate reconvenes. With the administration and some of itscongressional allies toadying to Saudi Arabia and the United Arab Emirates in a shameless attempt to stabilize international energy markets, this war powers resolution on Yemen couldn’t be more timely. Prior to the current war, most lawmakers (mistakenly) saw Yemen solely through the lens of counterterrorism. Although the conflict is a result of a coup during Yemen’s post-revolutionary transition in September 2014, Washington has largely bought into the false Gulf narrative that the war was instigated by Iran. The Obama administration began backing Saudi Arabia and the UAE’s military coalition, after it intervened in Yemen’s civil war in 2015. Since then, Washington has provided aerial refueling, targeting intelligence, and U.S. advisers without authorization from Congress. Since the March 2015 intervention, the Saudi and Emirati-coalition has conducted an aerial and ground military campaign that has relied heavily on U.S. weapons, as well as American logistical and intelligence support. The coalition has also enforced a siege against rebel-held territory in Yemen by blocking its air and sea ports, which has severely hampered the import-reliant economy and catalyzed the spiral of Yemen’s pre-existing humanitarian crisis into what the United Nations has called “the world’s worst humanitarian crisis.” While Houthi forces abuse those living under their corrupt rule, forcibly recruit child soldiers, and launch mortar shells and missiles into civilian areas, the U.S.-supported, Saudi-led coalition has also engaged in a consistent pattern of airstrikes targeting civilian objects and civilian infrastructure, including a school bus full of children, public markets,weddings, port docks and cranes, funerals, Doctors Without Bordershospitals and other medical facilities, camps for internally displaced people, and boats filled with African refugees. These attacks have a direct correlation to the humanitarian crisis, as the destruction of such vital civilian infrastructure has directly hampered humanitarian and commercial import access to the country, which before the conflict imported nearly 90 percent of its food supply. Civilians have borne the brunt of this crisis, with an estimated 337,000 dead as a result of the fighting, starvation, and disease. Despite progress in gaining humanitarian access to previous frontlines during the current truce, three-quarters of the population, nearly 20 million people, are acutely food insecure. For years, under three administrations, State Department officials havevoiced concern about U.S. complicity, and the potential legal culpability of U.S. personnel in aiding and abetting the coalition’s apparent war crimes. Yet despite the clear humanitarian, strategic, and moral imperatives, three presidents have failed to make meaningful changes to US policy that could help end Yemen’s suffering.

Greece Alerts Its Tankers In Gulf After Iran Threatens More 'Retaliation' Seizures - The government of Greece has issued an alert warning all Greek ships currently sailing in Persian Gulf waters to adapt and remain aware of heightened threats against them following last week's seizure of two Greek oil tankers by Iran's military. Maritime tanker monitors suggest at least a dozen Greek tankers are currently in waters near Iran.The alert told vessels to immediately "adapt to the unacceptable situation and reality created by the Iranian government’s tactic," according government spokesman Ioannis Oikonomou at a Monday press briefing in Athens, per Bloomberg reporting.Tasnim news agency over the weekend threatened that 17 other Greek-flagged tankers in the Persian Gulf risk seizure by the Islamic Republic as further retaliation for the US stealing Iranian oil in the Mediterranean when a Russian-flag tanker carrying Iranian crude was recently seized off Greece. "The vessels were seized a day after Athens assisted the United States in seizing an Iranian oil tanker over alleged sanctions violations," RFERL reported. And Politico noted:Nour News, a website close to Iran’s Supreme National Security Council, had warned earlier on Friday that Tehran planned to take “punitive action” over Greece assisting the U.S.Iran struck an apparent act of 'revenge' last Friday. Greece's foreign ministry confirmed that the Greek-flagged Delta Poseidon was boarded by Iranian militants via helicopter, later identified in international reports as IRGC operatives. The ministry had called the act "piracy" and a "violent taking over of two Greek-flagged ships." At least two Greek citizens were detained in that first boarding."A similar incident was reported on another Greek-flagged ship, carrying seven Greek citizens, off the Iranian coast," the ministry had described of the second ship, identified as Prudent Warrior, which is operated by the Greek company Polembros Shipping.

Iran’s seizure of Greek tankers heightens risk on key oil route — Iran’s seizure of two Greek oil tankers in the Persian Gulf raises the risk of further interruptions to shipments from a region that’s a vital source of global energy supplies.On Friday, Iran diverted two Greek tankers, each loaded with about 1 million barrels of oil, into its territorial waters -- an apparent tit-for-tat for a vessel that the European country seized. Greece is the world’s largest oil tanker-owning nation, making any spat with Iran potentially serious for the global market. Likewise, about one fifth of daily crude supply passes through the Strait of Hormuz, the narrow waterway separating the Persian Gulf from the Indian Ocean and crude buyers all over the world.“Iran are approaching any seizure of their vessels or assets as a quid pro quo,” said Matt Stanley, a trader and broker with Starfuels in Dubai. “Shippers will need to be more vigilant. Iran will be extremely protective of any and all assets.”Greece alerted all vessels from the country to “to adapt to the unacceptable situation” when sailing in the Persian Gulf. About 27% of the global fleet of oil tankers is Greek owned, according to data from Clarkson Research Services Ltd., a unit of the world’s largest shipbroker.The seized tankers, Prudent Warrior and Delta Poseidon, were taken by Iranian forces in the Persian Gulf on Friday, according to the US 5th Fleet in Bahrain. Both are Greek-owned and flagged, and had loaded cargoes in Iraq, according to tanker tracking data compiled by Bloomberg.The Prudent Warrior had been sailed near the Iranian port of Bandar Abbas, just off the country’s coast, as of Monday afternoon, according to tanker tracking data compiled by Bloomberg.Oil prices have surged by more than 50% this year, with Brent crude trading near $120 a barrel after Russia’s invasion of Ukraine roiled global markets for commodities and energy. Consumers were already suffering higher costs for fuels like natural gas and coal as supply shortages hit Europe and Asia during the winter months. With most of the world’s spare oil production capacity held by Gulf producers, the region is key for balancing markets.The seizure of the vessels came not long after Greek authorities, in coordination with US counterparts, stopped an Iranian-flagged tanker and confiscated its cargo.

UN Warns Iran's Enriched Uranium Stockpile Now 18 Times Imposed Limit -- The UN nuclear watchdog International Atomic Energy Agency (IAEA) announced Monday that it estimates Iran's stockpile of enriched uranium has grown to more than 18 times limits put in place by the 2015 JCPOA nuclear deal with world powers, brokered under Obama.This includes uranium enriched up to 20%, with the IAEA in a fresh report saying its monitors "estimated that, as of May 15, 2022, Iran’s total enriched stockpile was 3,809.3 kilograms." The 2015 deal set the ceiling at 300 kilograms. Further the deal, which the US pulled out of in 2018 under the Trump administration, puts enrichment levels at 3.67%.The report further indicates the amount enriched to 60% is now at 43.1 kilograms. To be considered weapons grade, Iran would have to enrich to about 90%.But Tehran has long argued that it's none other than Washington which unilaterally pulled out of the deal, that Iran has held up its end of the bargain. Further Iranian officials argue that its the US side holding up a finalized restored JCPOA. According to the latest statements from Tehran featured in state media:The US shows no action vis-a-vis Vienna talks, Amir Abdollahian said in a meeting with his Finnish counterpart Pekka Olavi Haavisto on Sunday.He stressed that the Islamic Republic of Iran is quite serious in reaching a good, strong and sustainable agreement in Vienna.Earlier this month, the Secretary of Iran's Supreme National Security Council (SNSC) Ali Shamkhani pointed out that the US must urgently drop anti-Iran sanctions if its hopes to finally secure a deal. "The Vienna talks have reached a stage where the knot can only be untied through the adherence of the violator party to Iran's logical and principled approaches,” he said."The US, by breach of promise, and Europe, by inaction, scuttled the opportunity to benefit from Iran's proven goodwill. If they have the will to return, we are ready and an agreement is within reach," Skamkhani added.But recently, the IAEA has voiced that it's "extremely concerned" about lack of Iranian communication over possible undeclared nuclear sites:"I am referring to the fact that we, in the last few months, were able to identify traces of enriched uranium in places that had never been declared by Iran as places where any activity was taking place," IAEA head Rafael Grossi told a European Parliament Committee."The situation does not look very good. Iran, for the time being, has not been forthcoming in the kind of information we need from them… We are extremely concerned about this," Grossi continued.Last week, the Israelis presented what they say is evidence proving a calculated inspections evasion process on the part of the Iranians. A major investigative report in The Wall Street Journal alleges that Iran has been covering up its nuclear weapons aspirations for years by allegedly falsifying a document trail with an eye toward covering up past work on a hidden nuclear weapons program...

Erdogan Announces New Major Military Operation In Northern Syria Against Kurds --Despite recent warnings not to do so from the United States, Turkey's President Recep Tayyip Erdoğan on Wednesday announced a fresh 'special operation' of the Turkish army to clear "terrorist elements" from northern Syria's Tal Rifaat and Manbij areas. The operation hearkens back to when an initial major Turkish offensive kicked off in the region, which is on sovereign Syrian territory south of Turkey's border, in 2019 which earned international outrage and condemnation. "We are taking another step in establishing a 30-kilometer security zone along our southern border. We will clean up Tal Rifaat and Mambij," Erdogan announced, saying that the operation will from there continue to other parts of northern Syria."We are moving to a new phase to create a 30 km deep safe zone," Erdogan said further in making the announcement. "We will clear Tal Rifaat and Manbij from terrorists."And that's when he seemed to poke the West over the ongoing row caused by Ankara's refusal to admit Finland and Sweden into NATO: "Let's see who will support us and who will stand against us," he stressed.According to Turkey's Daily Sabah, the Turkish leader has grown more and more frustrated over US as well as Russian 'inaction' against armed Kurdish groups in northern Syria. In the case of the US, a limited force of some 900 American troops still occupying northeast Syria continues to directly support the Syrian Democratic Forces militarily. The SDF is dominated by the Syrian Kurdish YPG - which Turkey argues is but an extension of the 'terror'-designated PKK: