Oil Prices Dip as Ukraine Peace Talks Counteract Middle East Supply Fears

Oil prices fell by about 1% as U.S. President Donald Trump and Russian President Vladimir Putin discussed ending the Ukraine conflict, potentially easing sanctions on Russian fuel exports, with Brent crude dropping to $70.56 per barrel and WTI to $66.90 per barrel. Russia’s oil production stood at 9.2 million bpd in 2024, down from 10.6 million bpd in 2016, and analysts expect a slow recovery even if sanctions are lifted. Economic concerns weighed on prices as the OECD warned that U.S. tariffs would slow North American growth and cut global energy demand, with analysts at Wood Mackenzie projecting Brent crude to average $73 per barrel in 2025, down $7 from 2024. Meanwhile, geopolitical risks remain as the U.S. vowed continued strikes against Yemen’s Iran-backed Houthis unless Red Sea attacks stop, and Israeli airstrikes in Gaza killed over 400 people, ending a temporary ceasefire. Iran, producing 3.3 million bpd in 2024, maintained stable crude exports at 1.7 million bpd despite sanctions, while fears persist that regional conflicts could disrupt global supplies. In the U.S., oil inventories are expected to rise by 0.9 million barrels, contrasting with a 2.0 million-barrel decline last year, as diplomatic progress in Ukraine and economic uncertainty offset supply fears.

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China's Gasoline Exports Drop to 12-Year Low Amid Lower Production and Slimmer Margins

China's gasoline exports in February plummeted to their lowest level in over 12 years, dropping 73% year-on-year to 200,000 metric tons (1.69 million barrels), according to customs data. The decline was driven by lower refinery output, particularly from independent "teapot" refiners, and strong domestic demand during the Spring Festival travel season. Other refined fuel exports, including diesel and aviation fuel, also weakened, with total exports of refined oil products falling 18% compared to the previous year. Additionally, weak Asian margins, the export tax effective from January, and tight export quotas further limited the potential for increased exports. For January-February, gasoline exports dropped 56%, diesel exports fell 42%, and aviation fuel exports decreased by 5%. Meanwhile, imports of liquefied natural gas (LNG) also declined by 19%.

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Bimco Warns Proposed Port Fees on Chinese Ships Could Hurt US Economy

Bimco, a shipowners' group, has warned that proposed port fees targeting Chinese-linked vessels could negatively impact the US economy by increasing shipping costs and causing congestion. Lars Robert Pedersen, Bimco’s deputy secretary general, stated that these fees would likely inflate transportation costs by $1 million to $1.5 million per port call, or up to $1,000 per net tonne. For example, a VLCC would be required to pay $100 million per port call at that rate. Pedersen argued that the fees would shift vessels around but not resolve the underlying issue, leading to inefficiencies. He also noted that these fees would be passed down the supply chain, further increasing costs. Maritime historian Salvatore Mercogliano warned that such a move could weaken the US’s maritime sector and cause economic repercussions similar to those seen during the early 20th century, like the economic downturn following World War I.

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Russian Oil Transferred from Sanctioned Tankers Discharged into China, Data Shows

A ship carrying Russian crude oil, transferred from three smaller tankers under U.S. sanctions, discharged its cargo in China last week, marking the end of an unusual month-long voyage. The Panama-flagged vessel Daban, which received two million barrels of Russian Sokol oil, unloaded at Qingdao's Qingdao Haiye Group port on March 13. The oil was transferred from the Aframax-sized tankers Vladimir Arsenyev, Captain Kostichev, and Victor Konetsky, which were sanctioned by the U.S. in January. The Daban's journey, which began in Russia's Far East, took about a month instead of the usual one-week transit time. The ship's operations highlighted efforts to circumvent sanctions and maintain Russian oil exports. Despite sanctions, China has opposed unilateral sanctions and has continued to receive Russian oil, though some Chinese ports, like Yantai in Shandong province, rejected the cargo. This situation underscores the ongoing complexities of Russian oil trade amid global sanctions.

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Russia Sends Crude to Syria via Sanctioned Tanker

A US-sanctioned tanker, the Sabina, carrying over 1 million barrels of Russian crude oil, appears to be headed to Syria's Binyas port. The tanker departed from the FSO Rosneft Umba near Russia’s Murmansk and is estimated to arrive by April 3. This shipment follows a US sanctions waiver allowing Syria to import energy products, but so far, only Russian oil has been imported. The Sabina, previously named the Sable, was sanctioned for trading above the $60 price cap on Russian crude imposed by the G7. Despite the sanctions, Russia continues its relationship with Syria, using oil shipments to maintain its military presence in the region.

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Kazakhstan’s Energy Minister Steps Down Amid OPEC+ Production Disputes

Kazakhstan's energy minister, Almasadam Satkaliyev, will step down to lead the country’s newly created atomic energy agency as the government struggles to persuade U.S. and European oil companies to reduce production that exceeds OPEC+ targets. Kazakhstan’s crude output surged to 1.767 million bpd in February, well above its OPEC+ quota of 1.468 million bpd, largely due to Chevron’s expansion at the Tengiz oilfield. The overproduction has sparked tensions within OPEC+, with Russia’s Deputy Prime Minister Alexander Novak emphasizing that all members must meet their quotas. OPEC+ sources revealed that Kazakhstan’s record output influenced the group’s decision to raise production starting in April. Satkaliyev recently traveled to the U.S. to negotiate production cuts with major oil firms like Chevron, Exxon Mobil, Shell, and Eni, though the results of these discussions remain undisclosed. Meanwhile, Kazakhstan, which holds about 15% of the world’s uranium reserves but lacks nuclear power plants, is shifting its focus towards atomic energy development.

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Nigeria's Trans Niger Pipeline Shut After Blast, Investigation Underway

Nigeria's Trans Niger Pipeline (TNP), a crucial oil pipeline that transports crude to the Bonny export terminal, was shut down following a blast that caused a fire, according to police. The explosion occurred in Rivers State, and the Nigerian oil consortium Renaissance Group, which now owns Shell's former onshore assets, confirmed the incident and sent a team to investigate. The TNP has a capacity of around 450,000 barrels per day and plays a key role in exporting Bonny Light crude. Police have initiated an investigation and detained two individuals for questioning regarding potential sabotage. While the situation is under control, it remains uncertain how long the pipeline will be out of operation. A prolonged shutdown could lead to a force majeure declaration on Bonny Light exports.

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Mexico’s Pemex in Talks with Carlos Slim’s Firms for Ixachi Gas Field Investment

Mexican state energy company Pemex is negotiating with billionaire Carlos Slim’s firms, including Grupo Carso, for investment in the Ixachi natural gas field, President Claudia Sheinbaum confirmed. The proposed mixed contract would allow private firms to partner with Pemex while ensuring the state retains ownership of resources. Pemex, struggling to meet its 1.8 million bpd production target, sees Ixachi as crucial for reducing Mexico’s dependence on U.S. gas imports, which have tripled over the past decade. The company is also discussing a joint operating agreement with Slim’s companies for the Zama deepwater field in the Gulf of Mexico. Despite being Mexico’s most significant gas discovery in over 25 years, much of the country’s natural gas remains unusable due to high nitrogen content, further highlighting the urgency of Pemex’s push for private-sector collaboration.