2024.07.31

OPEC+ Likely to Maintain Current Output Policy at August 1 JMMC Meeting

An OPEC+ panel is expected to maintain its current production cut policy during the upcoming online joint ministerial monitoring committee (JMMC) meeting on August 1, despite recent oil price declines. Sources from the group indicated that no changes are anticipated in the agreement to start unwinding some cuts from October. The group, which includes OPEC and allies like Russia, is currently cutting 5.86 million barrels per day, roughly 5.7% of global demand. The JMMC, which meets bi-monthly and can recommend policy changes, includes key oil ministers from leading producers.

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Russia Begins 2024 Arctic Route Shipments

Russian shipping company Sovcomflot has commenced transporting Urals crude oil to Asia via the Northern Sea Route (NSR) as melting ice allows transit. This route offers a shorter alternative to the Suez Canal, though it necessitates icebreaker assistance. The NSR, spanning 5,600 km from Murmansk to the Bering Strait, is typically open for shipments from July to October. Due to Western sanctions, Russia seeks alternative shipping routes to Asia. In 2024, Sovcomflot's vessels, including the Aframax vessel Viktor Bakaev, are navigating this route. Demand for the Arctic passage is high, with increased oil volumes expected this year. The route's development is part of Russia's broader strategy to pivot towards Asia amidst strained Western relations.

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Petrobras Reports 2.6% Increase in Second-Quarter Oil Production

Brazilian state-run oil company Petrobras announced a 2.6% rise in crude oil production for the second quarter, reaching 2.16 million barrels per day (bpd) due to the activation of five oil platforms and production commencement in 12 wells. Total production of oil equivalent rose to 2.7 million boepd, a 2.4% increase from the previous year. Growth in the pre-salt fields offset declines in other areas. Sales of oil, gas, and derivatives grew 4% to 2.94 million boepd, with domestic sales down 4.4% but foreign sales up 30%. Total exports increased 36%, with oil exports up 58%. China became the largest export destination, taking 50% of oil exports, followed by Europe at 30%. Full financial results for the quarter are expected on August 8.

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Pemex Crude Exports Drop 37% Year-on-Year in June

Mexico's state energy company Pemex saw a significant decline in crude oil exports, which fell 37% year-on-year in June to 754,367 barrels per day (bpd), down from 1.203 million bpd in June 2023 and 910,791 bpd in May 2024. Liquid hydrocarbon production also hit its lowest rate in 2024 at 1.782 million bpd. Crude oil production alone was 1.50 million bpd, marking the lowest levels in over four decades due to the depletion of key fields. Pemex CEO Octavio Romero plans to reduce fuel imports as local refineries, including the new Olmeca refinery and two coking plants, increase crude processing. The Olmeca refinery is set to process 100,000 bpd in July. Meanwhile, the six older refineries processed 867,615 bpd in June, with gasoline and diesel production increasing from May, though still below the government's target of 1 million bpd.

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Eastern Pacific Expands $8 Billion Orderbook with New Product Tanker Quartet

Eastern Pacific Shipping, backed by Idan Ofer, has added four dual-fuel LR2 product tankers to its $8 billion orderbook, bringing its total to 16 LNG dual-fuel LR2 vessels on order. The Singapore-based company aims to control a 50-vessel product fleet and currently has four LR2 and 16 MR tankers in operation. The new 113,600-dwt product carriers will be built by China's Xiamen Shipbuilding and delivered in 2028. Eastern Pacific's extensive newbuilding program includes over 100 vessels, with diversified types such as container ships, car carriers, and LNG carriers, reflecting its ongoing decarbonization efforts since 2018.