2025.01.02

China grants 2025 crude import quota to Sinochem and CNOOC

China has issued a 2025 crude oil import quota of 17.12 million metric tons (342,400 barrels per day) to state-run Sinochem Group, potentially allowing its three bankrupt Shandong refineries to resume operations. Weaker fuel demand has pressured refining margins, with Sinochem considering retaining the assets after an unsuccessful auction. State-run CNOOC also received a 3 million metric ton quota for its Ningbo refinery. These allocations contribute to a total 2025 crude quota of 178.45 million tons (3.57 million barrels per day), slightly below last year’s 182.69 million tons. China remains the world's largest oil importer and second-largest consumer.

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Europe ends era of Russian gas with Ukraine transit halt

Russian gas exports through Ukraine stopped on New Year's Day after Kyiv refused to renew a transit agreement, ending decades of Moscow's dominance in Europe’s energy market. The cessation, amid ongoing war, is seen as a major setback for Russia. The EU, prepared for this, has diversified supplies, relying on Norwegian piped gas and LNG imports from Qatar and the U.S. Hungary continues receiving gas via TurkStream, while Moldova's Transdniestria faces heating shortages. Ukraine celebrates the halt as a "historic" move against Russia's influence but faces financial losses, offset by increased domestic gas tariffs. Russian supplier Gazprom and transit countries like Slovakia also face revenue and cost challenges. Europe's infrastructure and new LNG capacities ensure stability despite the shift, marking a decisive break from Russian energy dependence.

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Ukraine strikes Russian oil depot in Smolensk

The Ukrainian military launched an attack on a Russian oil depot in the Smolensk region, igniting oil storage tanks. The depot, reportedly used for military purposes, was targeted in collaboration with drone forces, though the specific weapon used was not disclosed. Smolensk's governor, Vasily Anokhin, confirmed the attack caused a fuel spill and fire. Russian air defenses shot down 10 Ukrainian drones, but one of the wrecked drones hit the facility. The attack led to powerful explosions and thick smoke, but Anokhin stated the situation was "under control."

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Indian refiner turns to costlier Middle Eastern oil amid Russian supply drop

Bharat Petroleum Corp., one of India’s largest refiners, is replacing reduced Russian oil shipments with costlier alternatives from the Middle East, including Iraq and the UAE. The supply shortfall, tied to sanctions on Russia’s tanker fleet and OPEC+ production limits, highlights shifting global oil trade patterns. Russian oil imports to India fell to 1.47 million barrels per day in December 2024, their lowest in a year. While Middle Eastern crude costs $2 more per barrel than Russia's Urals, Bharat Petroleum reports no immediate plans to expand year-long contracts with Middle Eastern producers.

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Iraqi cabinet approves $4.6 billion Basrah-Haditha oil pipeline project

The Iraqi cabinet has approved a $4.6 billion Basrah-Haditha oil pipeline project, costing approximately 5.97 trillion Iraqi dinars. The pipeline, which is set to transport crude oil to Iraq's central and southern regions, has been backed by Iraq's oil ministry. Iraq currently produces around 4 million barrels of oil per day.

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US oil production hits record high in October

U.S. oil production reached a record 13.46 million barrels per day (bpd) in October, rising 260,000 bpd from the previous month, driven by stronger demand, the highest since the pandemic. While the growth in U.S. oil output has slowed compared to 2023, production still increased by 2.3% year-over-year. October also saw a notable rise in total oil demand to 21.01 million bpd, the highest since August 2019, with distillate fuel consumption hitting a one-year peak. Texas led the growth with a record 5.86 million bpd, while the Gulf of Mexico rebounded after hurricane disruptions. Despite weaker-than-expected demand in China, U.S. oil output growth remains strong.

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