Key Point
- Oil prices climb as sanctions and supply risks increase.
- OPEC cuts 2024 oil demand growth forecast due to lower consumption.
- ExxonMobil targets 5.4 million boe/d production by 2030.
After weeks of stalemate following the OPEC+ conference, oil prices have increased due to fresh geopolitical uncertainties and possible penalties. Brent crude saw its first weekly increase since mid-November, rising back to $74 per barrel.
Oil prices rebound amid new sanctions and supply risks
New G7 penalties on Russia’s “shadow fleet,” worries about China’s oil purchases from Iran, and the possibility of sanctions on Tehran connected to nuclear are all factors in the increase.
For the seventh time this year, OPEC has cut its 2024 and 2025 global oil demand prediction. The majority of the reduction is ascribed to lower Middle Eastern consumption, and the organization now projects that oil demand will increase by 1.45 million barrels per day.
In reaction to Russia’s ongoing war in Ukraine, the European Union has completed its fifteenth set of sanctions against the country.
ExxonMobil boosts production goals after Pioneer acquisition
The production targets of ExxonMobil (NYSE:XOM) have been raised after the company acquired Pioneer Natural Resources. By 2030, the U.S. oil major intends to grow overall output to 5.4 million barrels of oil equivalent per day (boe/d), an 18% increase.
Budget cuts and unpaid obligations to drilling companies have caused Mexico’s oil production to drop to its lowest levels in decades.
Iran has consented to increased nuclear surveillance at its subterranean facility in Fordow.
Former U.S. President Donald Trump has threatened to levy a 25% tariff on Canadian goods, and a number of provincial leaders in Canada are urging Prime Minister Justin Trudeau to respond. Premier of Ontario Doug Ford proposed that if tariffs be applied, exports of electricity and crude oil to the United States be stopped.
Russia’s Rosneft and India’s biggest private refiner, Reliance (NSE:RELI), agreed to buy 500,000 barrels of Russian oil per day for ten years.
Despite regional geopolitical concerns, Shell (LON:SHEL) has inked an offshore exploration agreement with Bulgaria to develop a 4,000 km² zone close to Turkey’s Sakarya gas discovery.
A $4.3 billion lithium iron phosphate (LFP) battery factory will be constructed in Stellantis’ Zaragoza plant in Spain thanks to a partnership with Chinese battery producer CATL.
Gunvor, an energy trading company, has chosen to close its 75,000 barrel per day refinery in Rotterdam due to low refining profits, high operating costs, and growing electricity prices.
With the departure of its CEO, Rahul Dhir, Tullow Oil (LON:TLW) might be a target for takeover. According to reports, Kosmos Energy, an upstream peer, is thinking about purchasing Tullow for all of its shares.
