Oil prices climbed in the first half of the week over hopes that a trade war could be avoided with the US delaying reciprocal tariffs; however, gains were limited by Ukraine-Russia talks and rising US crude stocks.
BKR Rig Count | The total active drilling rigs in the United States increased by 2 last week, to 588. Oil rigs increased by 1 to 481, and gas rigs increased by 1 to 101. Rig count in the Permian Basin increased by 1 to 304 | Feb 14 | BKR NAM Rig Count
US Crude Inventories, excluding those in the Strategic Petroleum Reserve (SPR), increased by 4.1 MMbbl to 427.9 MMbbl (about 4% below the 5y average for this time of year). On the products side, gasoline decreased by 3.0 MMbbl (1% below the 5y average). Distillate fuels increased by 0.1 MMbbl (11% below the 5y average). Total commercial petroleum inventories increased by 1.2 MMbbl | Feb 7 | EIA Weekly Report
Equinor estimates that even if the Ukraine conflict ends, Russian pipeline gas returning to Europe would be much lower than pre-war levels and insufficient to shift the bloc’s market balance. The Norwegian major argued that not all existing pipeline connections would be brought back into operation, estimating around 35 Bcm of additional Russian pipeline gas may return, on top of the existing flow through the TurkStream pipeline, estimated at 16.7 Bcm to Europe last year | Feb 10 | Upstream
India has agreed to boost oil and gas imports from the US in an effort to reduce the trade imbalance between the two countries and avoid retaliatory tariffs. “I think we purchased about $15 billion in US energy output,” India’s Foreign Secretary Vikram Misri said “There is a good chance that this figure will go up as much as $25 billion.” | Feb 14 | Bloomberg
China’s state-owned oil giants—PetroChina, Sinopec, CNOOC, and Sinochem—are accelerating asset divestments to boost profitability and efficiency as part of their 2024 restructuring efforts. Sinochem has exited Brazil’s Peregrino and Pitangola oilfields and is negotiating the sale of its Wolfcamp shale assets in the US, with plans to divest 32 oil and gas blocks across nine countries to refocus on downstream operations. PetroChina and Sinopec have also offloaded assets, while CNOOC is said to be considering an exit from operations in the UK, Canada and the US over potential sanction concerns. Meanwhile, resource-rich countries in the Middle East, Africa and Latin America have become increasingly receptive to foreign investment, with some offering more favourable contractual terms to Chinese firms | Feb 11 | Upstream
Petrobras Chief Executive Officer Magda Chambriard said the Brazilian oil giant can withstand global prices sliding a little lower under Donald Trump, in part by leaning on its customers in China and India. “Our five-year strategic plan is completely resilient to $65” | Feb 12 | Bloomberg
Two of the US’s biggest utilities (Duke, AEP) said that their data center customers are proceeding “full speed ahead” even after Chinese artificial intelligence company DeepSeek threw questions over the future for power-demand growth. According to the Duke CEO “In our discussions with the hyper scalers, they anticipated efficiency gains so DeepSeek was not a surprise to them.” | Feb 13 | Bloomberg
As China encounters the limits of its shallow and medium oil and gas reservoirs, the country is turning its focus to the deeper, older layers beneath its vast onshore basins and re-exploring ageing fields as part of a strategy to secure its energy future. The National Development & Reform Commission (NDRC), the body responsible for economic planning, has called for intensified efforts in four key areas: Deep reservoirs, deepwater fields, unconventional resources and ageing oilfields. The strategy, described as “two deep, one unconventional and one old”, aims to revitalise China’s upstream prospects through targeted exploration | Feb 11 | Upstream
The US oil industry is confident it can win exemptions from Trump administration tariffs on imported steel and crude, according to the American Petroleum Institute. Tariffs of 10% on Canadian oil and 25% on Mexican cargoes are set to kick in next month, alongside a 25% levy on steel, “There’s a lot of time between now and then for us to make the case” API Chief Executive Officer Mike Sommers said | Feb 13 | Bloomberg
Looking ahead
IEA Oil Market Report - February 2025 | Global oil demand growth is projected to average 1.1 mb/d in 2025, up from 870 kb/d in 2024. Growth in 2025 is led by China, even as its share of the global increase slumps to 19%, compared with 60% in the preceding decade, driven entirely by the petrochemical sector. India and Other Asia provide an increasing share of growth, contributing a combined 500 kb/d. OECD demand is forecast to return to structural decline following a modest increase last year. World oil supply plunged 950 kb/d to 102.7 mb/d in January, as seasonally colder weather hit North American supply, compounding output declines in Nigeria and Libya. Supply was nevertheless 1.9 mb/d higher than a year ago, with gains led by the Americas. Global oil supply is on track to increase by 1.6 mb/d to 104.5 mb/d in 2025, with non-OPEC+ producers accounting for the bulk of the increase if OPEC+ voluntary cuts remain in place. Fresh US sanctions on Russia and Iran roiled markets at the start of the year but they have yet to materially impact global oil supply. Iranian crude oil exports are only marginally lower while Russian flows, so far, continue largely unaffected. At the same time, non-OPEC+ oil supplies, led by the Americas, are set to expand by 1.4 mb/d this year – well above projected demand growth. However, improved OPEC+ compliance with agreed targets is slowly chipping away at this year’s projected supply surplus. The producer alliance confirmed on 3 February it plans to start unwinding voluntary cuts from April, noting that “these additional voluntary production adjustments have ensured the stability of the oil market”. It is still too early to tell how trade flows will respond to new US tariffs or the prospect thereof, and what the impact of the escalation of sanctions on Iran and Russia may be in the longer run. But time and again, oil markets have shown remarkable resilience and adaptability in the face of major challenges – and this time is unlikely to be different | Feb 13 | IEA
Automakers are lobbying against Washington lawmakers ending popular electric-vehicle tax credits that President Donald Trump has railed against, pushing instead for a gradual phase-out over several years if he moves to cut them. General Motors Co. and Ford Motor Co. are among the carmakers and industry lobbying groups making pilgrimages to ask the Trump administration and Republican legislators to preserve some EV incentives in the Inflation Reduction Act passed under Joe Biden, according to people familiar with the effort who weren’t authorized to speak publicly on the matter. Among the options being floated if the Trump administration moves to strike EV incentives is a three-year wind down to allow more time for the companies to adjust their businesses, these people said. To preserve EV subsidies, carmakers are also stressing that a multiyear phase-out period would give them time to drive battery and EV costs down so they can reduce prices and sell electric vehicles without help from the federal government, the people said. Federal support also helps give domestic automakers a chance to build an American-made supply chain to better compete with China. | Feb 11 | Bloomberg
S&P Global Energy Sector Investment to 2050 | S&P indicates that a cumulative investment of $58 trillion (US$ 2023 real) is required from 2024 to 2050 under the Inflections base case. Under the lower-carbon Green Rules scenario, cumulative investment is approximately $60 trillion, despite Green Rules delivering a significantly greater reduction in energy sector emissions. This differential in investment spending is driven by the decreasing unit cost of established renewable energy technologies (wind and solar) and lower overall energy demand. The analysis also indicates that a cumulative investment of between $65 trillion and $69 trillion is required from 2024 to 2050 to deliver an energy sector consistent with net-zero greenhouse gas emissions at the global level. Globally, legacy energy investment (e.g., in upstream oil and gas, coal mining and refining) never returns to prepandemic levels under any outlook. Clean technology investment (e.g., in renewable power capacity, hydrogen and CCS) scales significantly under the Inflections base case but must accelerate rapidly to deliver lower-carbon outcomes, especially the net-zero cases. Power transmission and distribution (T&D) investment rises under all outlooks, although along distinct trajectories correlated to broader investment trends in power generation. The scale and ratio of legacy to cleantech investment is critical to delivering emission reductions. Over 2024–50, the cleantech multiplier, defined as the ratio of combined cleantech and power T&D investment to legacy investment, must exceed 1 to deliver emission reductions for the energy sector at the global level. A cleantech multiplier of 6.0 or higher is sufficient to minimize GHG emissions from the energy sector by 2050, consistent with a net-zero outcome at the global level. A future energy sector consistent with a global warming scenario of below 2 degrees C (Green Rules) can emerge with a cleantech multiplier of approximately 4.0. Capacity build and cost trends are closely aligned in the cleantech space, with learning rates (i.e., technology costs) for wind, solar and battery storage declining most rapidly under scenarios that see greatest capacity build. Asia-Pacific dominates future energy sector investment, regardless of outlook. Under the Accelerated carbon capture and storage (ACCS) net-zero case, cumulative energy sector investment in Asia-Pacific from 2024 to 2050 approaches $34 trillion. Investment in the European energy sector to reach net-zero exceeds $10 trillion | Feb 13 | S&P
