Oil Rises Modestly After Israeli Strike on Qatar

Oil prices closed higher on Tuesday after Israel carried out a strike on Hamas leadership in Doha, Qatar, with Brent crude up $0.37 to $66.39 a barrel and WTI also rising $0.37 to $62.63. Initial gains of nearly 2% were pared as the U.S. assured Qatar that further escalation would be avoided, limiting geopolitical risk premiums. Analysts noted that the attack did not cause immediate supply disruptions, and physical oil markets showed signs of softness, indicating weak demand. Prices had already been supported by a smaller-than-expected OPEC+ output increase, continued Chinese stockpiling, and potential new sanctions on Russia. Additional downward pressure on oil is expected from rising global inventories and anticipations of U.S. Federal Reserve interest rate cuts, which could stimulate economic activity but also signal slower near-term demand.

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Trump Proposes New Tariffs on China and India to Pressure Russia

President Donald Trump indicated he is willing to impose additional tariffs on China and India to pressure Russia into negotiations with Ukraine, contingent on EU nations taking similar actions. The proposal comes amid stalled bilateral talks with President Vladimir Putin and continued Russian attacks in Ukraine. Potential US and EU measures under discussion also include sanctions on Russia’s shadow fleet, banks, and major oil companies. Trump has already doubled tariffs on India to 50% over its continued purchases of Russian oil and continues negotiations with Indian officials to address trade barriers. The discussions coincided with a 19th EU sanctions package review, highlighting efforts to target Moscow’s revenue sources and weaken its war capacity.

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France and Germany Push EU to Sanction Russian Oil Giants in 19th Sanctions Package

France and Germany are pressing the EU to sanction Russian oil majors such as Lukoil and Litasco in the bloc’s 19th sanctions package to tighten pressure on Moscow’s oil exports. The proposal also seeks tougher measures against Russia’s “shadow fleet” of tankers and traders in third countries that help circumvent sanctions, with coordination expected alongside the US. Washington is considering parallel actions, including sanctions on Rosneft, Lukoil, and covert Russian shipping, though final decisions rest with President Trump, who has so far avoided direct sanctions on Moscow. The EU package also aims to increase restrictions on financial and logistical schemes used by Russia to bypass sanctions and target civilian sectors tied to the military industry. However, unanimous approval is required, and past attempts to sanction energy firms have been blocked by countries such as Hungary.

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US Forecasts Global Oil Glut Arriving Sooner Than Expected

The US Energy Information Administration (EIA) reports that a global oil glut is already underway, with inventories projected to grow by over 2 million bpd in the current quarter, earlier than previously expected. This outlook does not yet factor in the recent OPEC+ production increase, which comes as demand faces uncertainty due to trade tensions and slowing economic growth. The EIA predicts Brent crude will average $51 a barrel in 2026, down from around $66.50 currently, as rising supply weighs on prices. US crude production is forecast to rise slightly to 13.44 million bpd in 2025, but a decline is expected in 2026, marking the first annual drop since 2021. Shale drillers are retrenching as the number of drilled but uncompleted wells hits a decade-low, limiting the ability to quickly ramp up output.

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California Considers Paying Valero Millions to Prevent Benicia Refinery Closure

California legislators are negotiating with Valero Energy Corp. to provide $80 million to $200 million for maintenance costs to keep the Benicia refinery open, which is currently slated to close by April. Maintenance costs, especially major overhauls every four to five years, are a key factor influencing refinery closures. Talks are part of Governor Gavin Newsom’s broader effort to maintain fuel supplies in a state with some of the highest gasoline prices in the U.S. and follow the California Energy Commission’s rollback of a proposed profit cap on refiners. The closure would also impact the local economy, as the municipality of Benicia faces a $10 million budget shortfall if the plant shuts down. Valero shares initially fell on the news but later recovered, rising 2.8% to $161.77, making it the day’s top-performing S&P 500 oil stock.

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China’s Refining Overcapacity Cuts May Take Up to Five Years, Rongsheng Warns

China’s plan to reduce oil-refining overcapacity could take three to five years to phase out about 100 million tons of refining capacity, according to Rongsheng Petrochemical. The initiative is part of Beijing’s broader “anti-involution” campaign aimed at easing excessive competition, tackling deflation, and shifting investment toward advanced materials. Smaller and outdated refineries are set to be shut down or upgraded, but progress will be slow due to employment concerns and negotiations between central and local governments. The prolonged adjustment reflects the complexity of balancing industrial restructuring with economic and social stability, especially amid China’s fragile property market. Rongsheng added that trade tariffs distort oil price signals, reducing refinery profitability and likely pushing refiners to cut fuel output while boosting petrochemical production.

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APPEC : US Tariffs Intensify Challenges for Global Petrochemical Trade

U.S. tariffs on Chinese goods are exacerbating difficulties in the global petrochemical sector, with China redirecting exports to Asian markets, executives said at the APPEC conference in Singapore. TotalEnergies warned that if tariffs remain, global petrochemical trading could fall an additional 15% on top of the 34% decline over the past five years, driven by overcapacity and volatility. Trading houses without production assets are struggling to survive, while protectionist policies and disrupted supply chains are complicating short-term investment planning. Petronas Chemicals highlighted that Chinese products are displacing local producers in South and Southeast Asia, prompting the company to diversify into specialty chemicals and acquire European technology firms. Despite challenges, Indian consumption remains stable, providing a rare bright spot in an otherwise strained sector.

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Torm Unaware of Hafnia-Oaktree Deal Talks

Torm management confirmed it was not involved in or aware of the recent discussions between rival Hafnia and private equity investor Oaktree Capital regarding a potential transaction. The deal involves Oaktree pledging a 14.4% stake in Torm to Hafnia for $311 million, a move likely to lead to a full merger creating a $5 billion company with 300 ships. Torm determined that the UK City Code on Takeovers and Mergers does not apply, but it remains subject to Danish takeover rules. Scorpio Tankers, the third major US-listed product tanker company, has confirmed it has no interest in participating in a bidding war for Torm and supports the merger. Oaktree’s supervoting shareholding gives it the ability to facilitate such a deal, similar to past exits it has executed with other shipping companies.

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Chevron Expands Israeli Gas Exports to Egypt Amid $35 Billion Deal

Chevron plans to boost pipeline gas exports from Israel to Egypt, where demand has surged after falling domestic output turned the country into a major LNG importer in 2023. Egypt’s appetite for gas has already doubled imports compared with 2018, supported by new floating LNG import terminals. Chevron operates Israel’s Leviathan field, which temporarily shut down during the Gaza conflict but is now secured under a new long-term supply agreement worth about $35 billion, the largest in Israel’s history. The US energy major is also exploring additional development in Israel and potential US LNG shipments to Egypt, alongside expanding Leviathan with floating LNG (FLNG) technology. Globally, Chevron is considering FLNG opportunities in markets such as Nigeria and Argentina, while it has already contracted 7 million tons of US LNG.

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Exxon Mobil Acquires Kentucky Battery Plant to Advance Synthetic Graphite Production

Exxon Mobil is acquiring a battery materials factory in Hopkinsville, Kentucky, from Superior Graphite as part of its strategy to expand into the fast-growing energy storage market. The company plans to begin commercial production of synthetic graphite by 2029, using refinery byproducts to create advanced battery anodes with faster charging, longer range, and extended lifespan. Exxon will also take over Superior Graphite’s research facilities in Illinois and about 150 employees. The move aligns with CEO’s strategy to diversify into areas where Exxon has a technological edge, such as carbon capture, hydrogen, lithium, and now advanced batteries, rather than wind or solar. Exxon ultimately aims to become a major supplier of both synthetic graphite and mined lithium to the electric vehicle industry by the end of the decade.