US starts emergency crude release from SPR

Spanish Market: Crude oil, Oil products
21/03/26

President Donald Trump's administration has started the first shipments of crude released from the US Strategic Petroleum Reserve (SPR) as part of a targeted 172mn bl emergency drawdown of crude from reserves.

The initial crude shipments began on Friday, the same day the US Department of Energy (DOE) awarded contracts to eight companies to take 45.2mn bl of sweet and sour crude from three SPR storage sites in Texas and Louisiana. DOE has scheduled the crude deliveries from 1 April to 31 May, with the possibility of early deliveries.

The drawdown began at "record speeds", nine days after Trump approved the release in coordination with the IEA as part of a global 400mn bl drawdown meant to reduce oil prices, DOE assistant secretary of hydrocarbons Kyle Haustveit said. The contracts will eventually add millions of barrels of crude back to the SPR "at no cost to taxpayers", he said.

Shell, Marathon Petroleum and BP were among the companies that DOE awarded "exchange contracts", a type of loan under which they can take out crude from the SPR in exchange for returning the borrowed amount, plus an in-kind payment. DOE said the companies will return 55mn bl of crude to the SPR under the contracts, nearly 22pc more crude than they borrowed. The contracts are financially viable because crude markets are in backwardation, with WTI crude futures for delivery in April trading close to $98/bl, compared with less than $72/bl in much of 2028.

The administration last week offered to release up to 86mn bl in the initial phase of its drawdown, but DOE on Friday had only awarded contracts for 45.2mn bl, slightly more than half of the volume offered. Although exchange contracts would ensure the SPR will be refilled at a later date, their complexity can make them slower to execute than emergency sales.

DOE had offered exchanges of sweet and sour crude from three SPR storage sites. The agency fully subscribed its offer to release 10mn bl of sweet crude from the Bayou Choctaw SPR storage site in Louisiana. But out of the 42mn bl and 34mn bl of sour crude offered from the Bryan Mound and West Hackberry SPR storage sites, DOE only awarded contracts for 15.7mn bl and 19.5mn bl of sour crude, respectively, the agency said. DOE has not said when the crude will be returned, but its solicitation allowed for crude to be returned to the SPR from 1 November 2026 through 30 September 2028.

By Chris Knight

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21/03/26

Iran says ready to discuss Hormuz passage with Japan

London, 21 March (Argus) — Tehran is ready to discuss passage through the strait of Hormuz with Japan and other countries that have not attacked Iran, Iranian foreign minister Abbas Araqchi has told Japan's Kyodo News, according to a post on his Telegram channel. "We have not closed this strait," Araqchi said. "From our perspective, the strait is open. It is closed only to the ships of our enemies — the countries that are attacking us. For other countries, ships can pass through the strait. Of course, there is a security issue. We are ready, if contacted, to provide safe passage for them. We will talk with them to find a way to ensure safe transit. We are prepared to provide safe passage. They only need to contact us so that we can discuss how this route can be arranged." Araqchi added that he "certainly" meant Japan when referring to countries whose ships could pass through the strait. Japanese shipowners maintain some of the world's strictest safety standards and were among the first to halt operations in the Mideast Gulf when the war began at the end of February, as well as in the Red Sea when attacks on shipping by Yemen's Houthi rebels started in 2023. In an earlier interview on 15 March with CBS' Face the Nation, Araqchi said Tehran had been approached by "a number of countries" seeking safe passage through the strait. "This is up to our military to decide," he said. In practice, most tankers that have transited the strait in recent weeks have been Iranian. The 296,068 dwt Cuma left the Mideast Gulf fully laden and is signalling China as its destination, according to trade analytics platform Vortexa. It is unclear when the vessel crossed the strait, but its current position suggests it departed Iran after the US–Israeli strikes on 28 February . The 317,534 dwt Stream (Kharg Island–Ningbo), the 317,536 dwt Serena (Kharg Island–Dongjiakou), and the 298,414 dwt Nora (Kharg Island–Ningbo) have also recently passed Hormuz laden with Iranian crude, Vortexa data show. Late on Friday, the US issued a sanctions waiver for Iranian crude , including crude aboard sanctioned vessels, allowing the sale, delivery and offloading of Iranian oil loaded on or before 20 March until 19 April. As most other Mideast Gulf crude shipments remain unable to pass through the strait, Asian buyers are increasingly turning to another recently issued OFAC waiver covering Russian crude . The first Russian cargo since 2021 departed for the Philippines earlier this week. The 115,191 dwt Sara Sky left Kozmino on 16 March carrying Espo Blend crude and is expected to arrive in Bataan on 23 March, according to Kpler and Vortexa. A second Espo cargo left Kozmino for Bataan on 17 March aboard the 109,672 dwt Tiger Wings , although Vortexa notes that Bataan is listed only as a "declared destination". By Andrey Telegin Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

Gulf producers urge US to tackle Hormuz closure head-on

21/03/26

Gulf producers urge US to tackle Hormuz closure head-on

Dubai, 21 March (Argus) — Mideast Gulf oil producers are urging the US to address the disruption to oil flows through the strait of Hormuz "straight on", warning that interim measures such as tapping into Iran's so-called "oil-on-water" risk strengthening Tehran's position while leaving regional producers exposed, senior Gulf officials have told Argus. "The issue is not supply. The 140mn bl figure discussed by US officials on oil-on-water does not indicate the full picture," one senior Gulf official said. "Oil-on-water today includes production from Saudi Arabia, the UAE, Kuwait and Iraq, as well as from our western oil company partners in joint ventures, loaded on tankers stuck within the strait." The US Treasury Department's sanctions enforcement arm, the Office of Foreign Assets Control (OFAC), issued a licence late on Friday allowing the sale, delivery and offloading of Iranian crude loaded into tankers on or before 20 March, until 19 April. The OFAC licence also allows the import of Iranian crude into the US for further resale. There are no conditions attached to payments for such cargoes. US Treasury Secretary Scott Bessent estimated on 19 March there were 140mn barrels of Iranian oil at sea , without providing further detail. These US efforts to stabilise markets by leaning on floating storage volumes are viewed in Mideast Gulf capitals as a temporary fix, senior Gulf officials said, that fails to address directly the core issue — the effective disruption of the world's most critical energy transit chokepoint. Gulf officials warned that such measures risk creating an uneven dynamic in which Iranian crude continues to flow — primarily to China — while exports from US-aligned Gulf producers remain constrained. "China is the most obvious buyer of Iranian crude, but what about Japan, or South Korea — our buyers and US allies?" the senior Gulf official asked, noting that interdicting Iranian flows is not straightforward and that Tehran has developed sufficient mechanisms to bypass sanctions and retain access to revenues. A second senior Gulf official said producers in the region cannot accept an outcome where "Iran takes the strait of Hormuz hostage," describing such a scenario as a structural shift in global energy markets. Gulf capitals are increasingly concerned that Washington could move to wind down the conflict before securing a durable resolution on maritime access, leaving Iran with de facto control over traffic through the strait. "Nobody in the Mideast Gulf asked for this war, but now that we find ourselves in the midst of it, the US should sort this out," the first official said. "The US should finish the job and not forget about its allies in the region," both officials said separately. US president Donald Trump said late on Friday that he has no plans to end the war quickly, telling reporters that "you don't do a ceasefire when you're obliterating the other side." But he also signalled that Washington is "very close" to achieving key military objectives as it considers winding down operations — messaging that has added to unease in Gulf capitals. The comments follow a week of the most extensive damage yet to energy infrastructure across the Mideast Gulf. For Mideast Gulf officials, reopening the strait of Hormuz remains the only viable path to restoring market balance and preventing Iran from exerting sustained influence over global oil prices. "The US needs to find a solution, and it is faced with three options," the first Gulf official said. "A compromise with Iran over freedom of passage, alignment with Iran's dictates, or the use of force." Concern in Gulf capitals is growing, and an outcome in which Iran exercises control over the strait of Hormuz is creating a perception that they have been left behind. This, in turn, could complicate relations between the US and its regional allies, the senior Gulf officials said. By Bachar Halabi Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

US LNG sector sees risks from surge in prices

20/03/26

US LNG sector sees risks from surge in prices

Washington, 20 March (Argus) — The spike in LNG prices triggered by the war in Iran is prompting concerns from export project developers about the possibility of future demand destruction if prospective buyers lose confidence in the fuel. Iranian attacks on ships near the strait of Hormuz and missile strikes on Qatar's 77mn t/yr Ras Laffan LNG export terminal have driven prices up sharply. LNG delivered to northwest Europe in May topped $20/mmBtu this week, more than twice the price from before the war. That could mean a windfall for many LNG producers, but industry officials say the return of price volatility makes it harder to pitch governments on the long-term deals needed for such capital-intensive projects. "The volatility in price is probably the biggest risk for industry," said Ben Dell, managing partner at US private equity firm Kimmeridge on Friday at an event held by the US Trade and Development Agency. LNG prices have yet to hit the record highs seen in 2022 after Russia's invasion of Ukraine, but countries are already taking dramatic steps to reduce energy use in response. The IEA on Friday released recommendations to reduce demand-side energy use, including lower vehicle speed limits, working from home and avoiding jet travel. "If we end up more weeks or months in — we are already cutting bone — we will be cutting really deep bone," US LNG developer Excelerate Energy general counsel Alisa Newman Hood said. "We need LNG to be dependable in order for [governments] to depend on it and not end up in demand destruction." The attacks on the Ras Laffan LNG terminal could increase the value of LNG assets outside of the Middle East that "now appear to have lower operating risk, especially if an ultimate ceasefire agreement appears tenuous", investment bank TD Cowen said in a note to clients on Friday. US gas industry officials believe at least three large-scale LNG projects will soon reach FID but say more capacity may be needed. "I really think we ought to start today with more of a wartime mindset," LNG Allies executive director Fred Hutchison said. President Donald Trump's administration has championed the growth of US LNG, including by tapping federal financing and insurance authorities. The US Export-Import Bank (EXIM) last week said the proposed $14bn Delfin floating LNG project off Louisiana was a "potential" transaction it was reviewing.The US credit export agency has already provided loans and insurance to support US exports for LNG projects in Mozambique and Turkey, but it has yet to extend credit or insurance directly to US LNG export terminals. "We're looking at some potential LNG projects, for example, that will be exporting more cargoes and more molecules abroad," EXIM Bank vice president of global business development Ben Todd said at the event. "One area where EXIM Bank has seen absolutely increased demand is supporting the physical cargoes themselves." By Chris Knight Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

Iraq advises foreign firms to curb output

20/03/26

Iraq advises foreign firms to curb output

Washington, 20 March (Argus) — Iraq on Friday advised international oil companies to curb output at the fields they operate, declaring force majeure because of the disruption to exports from the country's south. Iraq has effectively lost access to the 3.4mn b/d of export capacity through Basrah as a result of the near-halt of transit through the strait of Hormuz. The oil ministry cited crude oil storage reaching its maximum capacity, which it said required a scaleback of production in the oil fields operated by international companies. "We will make every effort to resume exports as soon as possible; however, the situation is unpredictable," the oil ministry told the foreign firms. Invoking force majeure, retroactively to 3 March, allows Baghdad to pause revenue and production sharing contractual arrangements with foreign companies. Baghdad said it has cut its own crude production to 1.5mn-1.6mn b/d to prioritize domestic refining and electricity generation. Argus estimates production at around 1.2mn b/d. Iraq resumed crude exports from its northern Kirkuk fields to Turkey's Ceyhan port on 18 March at an initial rate of 250,000 b/d, according to the oil ministry. International oil companies operating in Iraq's Kurdistan region have already halted production, following repeated missile and drone attacks on energy infrastructure carried out by Iran-aligned Iraqi militia groups after the US and Israel attacked Iran on 28 February. By Haik Gugarats Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

UK clears US to use bases for Hormuz defensive strikes

20/03/26

UK clears US to use bases for Hormuz defensive strikes

London, 20 March (Argus) — The UK has approved the use of British bases for the US to carry out "defensive operations to degrade the missile sites and capabilities" being used by Iran to attack ships in the strait of Hormuz, the government said today following a meeting of cabinet ministers. The UK had previously limited US use of its bases to counter threats directly risking UK lives or interests. Downing Street condemned Iran's widening of targets to international vessels and said the UK is co-ordinating a viable plan with partners to safeguard navigation through the strait. But it reiterated that the UK will not be drawn into the wider conflict. Around 20mn b/d of Middle East crude and refined products — roughly 25pc of global seaborne oil trade — was transported through the Hormuz strait last year. But since the US-Israeli war with Iran began on 28 February, tanker traffic has slumped in the wake of repeated Iranian missile and drone attacks on ships and energy sites in the region. Options to bypass the strait are limited, leading to a sharp spike in oil and gas prices. US president Donald Trump has castigated the UK and other Nato allies for not helping the US to reopen the waterway. By James Keates Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

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