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IEA cuts oil demand forecast on recovery uncertainty

  • Spanish Market: Crude oil, Oil products
  • 13/08/20

The IEA has lowered its oil demand projections for the first time in several months, saying that the economic recovery from the Covid-19 pandemic "has plateaued in many regions".

In its latest Oil Market Report (OMR) the IEA forecasts global oil demand to fall by 8.1mn b/d this year to 91.9mn b/d, which is 140,000 b/d lower than it forecast a month ago. It said this reflects "stalling of mobility as the number of Covid-19 cases remains high, and weakness in the aviation sector."

The Paris-based energy watchdog also revised down its 2021 global demand estimate, by 240,000 b/d to 97.1mn b/d, driven by a long road to recovery for the aviation sector. It estimates jet fuel and kerosene demand to fall by 4.8mn b/d — or 39pc — this year compared with 2019, followed by a rise of just below 1mn b/d in 2021.

The IEA now forecasts demand to grow by 5.2mn b/d next year from this year, but it said that global consumption in December 2021 will still be 2pc lower than at the end of 2019.

It sees global oil supply falling by 7.1mn b/d this year and then increasing by 1.6mn b/d in 2021, assuming the Opec+ cuts remain in place as agreed and with full compliance from all participants. It estimates global supply was 90mn b/d last month, up by 2.5mn b/d from a nine-year low in June, with the rise coming as Saudi Arabia ended its voluntary supply cut, the UAE produced in excess of its Opec+ target and as "the US began to reverse steep declines."

"While Opec+ cuts ease by nearly 2mn b/d this month and other producers restore shut-in volume, compensation for earlier Opec+ over-production could keep world supply steady in August," the report said.

"Our balances show that in June demand exceeded supply, and for the rest of the year there is an implied stock draw," the IEA said. It said the amount of crude held in floating storage fell by 35.7mn bl, or 1.15mn b/d, in July from June's all-time high, to 184.4mn bl, although it said much of this moved into onshore storage, sustaining levels in the latter.

"Ongoing uncertainty around demand caused by Covid-19 and the possibility of higher output means that the oil market's re-balancing remains delicate," the IEA said.


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19/02/25

UK Gulfsands Petroleum eyes return to Syria's upstream

UK Gulfsands Petroleum eyes return to Syria's upstream

Dubai, 19 February (Argus) — London-listed Gulfsands Petroleum plans to return to Syria's upstream as soon as sanctions on the country are lifted and "circumstances allow," the company's managing director John Bell said. "Sanctions discussions are occurring not only in the EU, but also in the UK and US," Bell told Argus . "In summary, we view these developments as generally positive. Gulfsands has always intended to return to its operation in Syria when the circumstances allow." Gulfsands holds a 50pc operating stake in two oil fields in Syria's block 26, in the country's northeast near the border with Iraq, an area long controlled by the Kurdish-led Syrian Democratic Forces (SDF). Chinese state-owned Sinochem holds the remaining 50pc. Force majeure was declared in December 2011 with respect to the contract after the introduction of EU sanctions against Syria. The fields were producing 24,000 b/d at the time. Since then, control of the fields has been unclear at times. By 2017 Gulfsands said production was averaging around 15,000-20,000 b/d, although it added that was without its participation. Bell said the company can only return "if the current relevant energy sanctions in the EU, UK and US as revised and hence international companies are permitted to return to their operations, bringing with them vital investment, people, equipment and know-how." In January, the EU's high representative for foreign affairs Kaja Kallas said the bloc would begin easing sanctions against Syria within weeks , starting with economic and energy restrictions. More recently she said the EU would meet on 24 February to discuss the lifting of sanctions on Syria, and told Argus the prospect of this "is looking promising" albeit internal European politics could slow the process. Road to recovery Once a 600,000 b/d-plus producer, Syria's crude output has been on the decline over the past three decades. Just before the start of the civil war in 2011, production had was below 400,000 b/d, and by May 2012 it had fallen to 200,000 b/d, the Syrian government said. Today it is less than 100,000 b/d, with only around 16,000 b/d or so coming from fields in areas under the former Assad government's control. "At the moment, oil production in Syria is largely opaque, illicit, unsafe, destined for the black market and causing enormous environmental damage… [and] production volumes have decreased recently due to these unsustainable practices," Gulfsands' Bell said. Whether Syria can reverse this downward production trend "will depend on the approach taken by the new Syrian government," he said. If they properly leverage existing centralised government institutions and work with returning international energy companies, Bell said he could see crude output returning to not only pre-2011 levels, but even as high as 500,000 b/d "within several years." By Nader Itayim and Rithika Krishna Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Green marine fuel uptake slowed by regulations: GMF


19/02/25
19/02/25

Green marine fuel uptake slowed by regulations: GMF

Singapore, 19 February (Argus) — The global shipping sector requires clearer fuel regulations for widespread adoption of green marine fuels, according to panellists at the opening session of the Argus Green Marine Fuels Asia conference on 18 February. Regulations will be a key driver of fuel adoption in the industry but unclear directives remain a barrier to extensive uptake, said Global Centre for Maritime Decarbonisation's (GCMD) director for research and projects Prapisala Thepsithar. The pricing outlook for low to zero carbon fuels will become clearer only after the global shipping market progresses on a consistent set of regulations. Buyers will have to work with regulators to ensure that the uptake of fuels will be compliant across the value chain, said Baltic and International Maritime Council (BIMCO) regional manager Ashok Srinivasan. Shipowners and charterers would not want to increase bunkering of biofuels and subsequently discover it is not sustainable according to regulatory requirements, Srinivasan said. Market concerns such as fuel feedstock origin and production process, shipping infrastructure and technology, and vessel readiness were also discussed during the panel. The industry should strive towards regulations that are recognised as a global standard to be applied worldwide, said chief technology officer of energy and fuels at Maersk Mc-Kinney Moller Centre for Zero Carbon Shipping (MMMCZCS) Torben Nørgaard. But new regulations on alternative fuels must be aligned with existing ones, or it would be a challenge for the industry to comply, said Srinivasan. The market is looking ahead to the 83rd session of Marine Environment Protection Committee (MEPC) for any potential announcements about global fuel standardisation from the International Maritime Organisation (IMO). MEPC 83 will be held on 7-11 April 2025. The shipping sector expects a multi-fuel future, but more effort and time will be needed to ensure scalable supplies and feasible pricing. Shipping has "no history of being a market maker" that drives energy consumption and the industry will have to look for opportunities in other energy sectors to aggregate demand and pass the cost to customers, said Nørgaard. Fuel pathways are shared across industries and scalability is limited unless there is widespread adoption, added Nørgaard. Current and projected fuel prices are "a major factor" in the uptake of different fuel types, said Srinivasan. By Cassia Teo Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Guyana unfazed by Trump’s ‘drill, baby, drill’ vow


18/02/25
18/02/25

Guyana unfazed by Trump’s ‘drill, baby, drill’ vow

Georgetown, 18 February (Argus) — Guyana, one of the fastest-growing crude producers in the world, sees little threat from US President Donald Trump's pledge to flood global markets with cheap supplies. Despite Trump's vow to scrap a slew of regulations he claims are holding back US oil producers, Guyana's vice president Bharrat Jagdeo does not expect there to be a "major supply response." "If the prices come down, as President Trump wants, then it would also make some of the existing operations in the US — particular with (hydraulic fracturing) fracking — it may make them not feasible," Jagdeo said on the first day of the Guyana Energy Conference and Supply Chain Expo in Georgetown, Guyana, on Tuesday. Guyana's low breakeven costs and the quality of its crude will help it to maintain a competitive advantage going forward, he said. The vice president shrugged off concerns over the oil market as concerns grow over waning demand from China, the top importer. He pointed out that ExxonMobil just started the approval process for its seventh and eighth projects in the giant Stabroek block offshore Guyana, where the discovery of oil in 2015 has transformed the economic fortunes of the tiny South American nation. "They (ExxonMobil) study the oil markets, they probably know the oil markets more than any government official," Jagdeo said. "Clearly they see in the future a demand for fossil fuel, and they believe that in Guyana we have a unique opportunity to supply that market." Demand for fossil fuels is likely to remain "relatively high" for the foreseeable future while renewable sources lag behind, he said. Guyana, located on South America's northern coast bordering Venezuela, Suriname, and Brazil, has become a fast-growing non-Opec supplier since oil was first pumped in 2019. Output has accelerated to 650,000 b/d from zero in the space of around five years. And gross output is seen growing further to 1.3mn b/d by the end of the decade as new projects come online. By Stephen Cunningham Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

US court pauses refiner's biofuel case after EPA shift


18/02/25
18/02/25

US court pauses refiner's biofuel case after EPA shift

New York, 18 February (Argus) — A US federal appeals court has paused the Environmental Protection Agency (EPA)'s rejection of a refiner's request for exemptions from federal biofuel blend mandates, with relief possible for two more refiners as the US reassesses policy under a new administration. A three-judge panel on the US 5th Circuit Court of Appeals last week granted a request from Calumet's 57,000 b/d refinery in Shreveport, Louisiana, to pause a recent EPA action denying the refinery relief from its 2023 obligations under the federal Renewable Fuel Standard. The stay will remain as the court continues reviewing the legality of EPA's rejection, issued in the waning days of President Joe Biden's administration. Under the program, EPA sets annual mandates for blending biofuels into the conventional fuel supply but allows oil refineries that process 75,000 b/d or less to apply for exemptions if they can prove they would suffer "disproportionate" economic hardship. The Biden administration denied these petitions en masse, though most of these rejections were struck down by courts concerned with the government's reasoning. During his first term, President Donald Trump was more generous with refinery relief, which in turn weighed on biofuel demand and the prices of Renewable Identification Number (RIN) credits at the time. Though the 5th Circuit did not explain its decision, EPA had shifted course after the presidential transition, telling the court earlier in the week that it did not oppose Calumet's request for a stay and that it was reconsidering the refiner's earlier exemption petition. The agency said in other court cases that it would not oppose similar pauses on recently issued waiver rejections affecting Calumet's 15,000 b/d oil refinery in Great Falls, Montana, and CVR Energy's 75,000 b/d refinery in Wynnewood, Oklahoma. EPA's ambivalence makes stays more likely, leaving those refiners with little reason for now to enter the market for RIN credits. The agency still says it "takes no position on the merits" as its review of small refinery exemptions continues but the filings at least suggest the possibility of reversing prior rejections. EPA has not yet signaled a more substantive policy around how it will handle similar small refinery requests, which have piled up in recent months. There were 139 pending petitions covering ten compliance years according to the latest program data. By Cole Martin Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Shell starts construction of base oil unit at Wesseling


18/02/25
18/02/25

Shell starts construction of base oil unit at Wesseling

London, 18 February (Argus) — Shell has started construction of a Group III base oil production plant at its Wesseling oil refinery in western Germany, with commissioning scheduled by 2028, the company told Argus today. Two columns of 54 and 37 meters for the base oil conversion unit have been delivered and assembled at the site, Shell said. It announced plans to convert its Wesseling hydrocracker into a Group III base oil production unit at end of January 2024. The unit is anticipated to have a production capacity of 300,000 t/yr. Shell will cease crude distillation by March 2025 at the 147,000 b/d Wesseling refinery, as the company looks to reduce CO2 emissions. The base oil plant will receive vacuum gasoil (VGO) feedstocks from Shell's neighbouring 187,000 b/d Godorf refinery. European Group III prices have dropped on a persistent supply overhang. Argus -assessed prices for fca northwest Europe Group III 4cst with partial or no approvals fell by 23pc on the year to $1,020/t on 7 February. Suppliers in the Mideast Gulf target European buyers with ample spot supplies to capitalise on higher margins. Europe is the most attractive export outlet as it remains dependent on imports of Group III material owing to its smaller Group III production capacity in comparison to other regions. By Christian Hotten Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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