2024.12.27

Oil Prices Dip Amid Strong Dollar and China Stimulus Prospects

Oil prices fell slightly on Thursday during thin holiday trading as the strength of the U.S. dollar outweighed optimism about China's fiscal stimulus plans. Brent crude settled at $73.26 per barrel, down 0.43%, while U.S. West Texas Intermediate crude dropped 0.68% to $69.62. China plans to issue 3 trillion yuan ($411 billion) in special treasury bonds to boost its economy, but the World Bank noted lingering challenges such as weak consumer confidence and property sector issues.

Meanwhile, U.S. crude inventories reportedly dropped by 3.2 million barrels last week, according to the API, with the EIA set to confirm this data on Friday. Analysts anticipate a smaller decline of 1.9 million barrels. Elsewhere, traffic in Turkey's Bosphorus Strait resumed after a temporary halt due to a tanker engine failure.

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China's 2025 Fuel Export Quotas Hold Steady

China's first 2025 fuel export quotas for gasoline, diesel, and aviation fuel remain unchanged at 19 million tons, with state-owned Sinopec and CNPC receiving 70%. Low-sulfur marine fuel quotas also stayed flat at 8 million tons. Exports dropped 6.3% in 2024, and further declines are expected as refiners adjust operations. China's oil demand is forecast to peak by 2027, driven by shifts to LNG and electric vehicles.

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Finnish Police Board Shadow Fleet Tanker in Cable Sabotage Investigation

Finnish authorities have boarded the tanker Eagle S, suspected of sabotaging power and communication cables between Finland and Estonia. The Cook Islands-flagged vessel, linked to shadow fleet operations, is owned by Peninsular Maritime of India and operated by UAE-based Caravella LLC-FZ. The incident, occurring in Finnish waters on December 25, poses significant political and environmental risks, according to Finnish Prime Minister Petteri Orpo.

The Finnish army, coastguard, and police collaborated to detain the tanker and question its crew. This marks the second sabotage case in recent months, following similar damage caused by a Chinese vessel in November. Investigations continue as Finland coordinates with regional partners and NATO to address the threat posed by shadow fleet activities in the sensitive Baltic Sea.

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PCL Plans $11 Billion Refinery and Petrochemical Complex in Andhra Pradesh

India's Bharat Petroleum Corp (BPCL) plans to invest $11 billion in a refinery and petrochemical project in Andhra Pradesh to meet rising fuel demand. The facility will include a 9 million metric ton per year refinery and an ethylene cracker, with 35% of output dedicated to petrochemicals. BPCL aims to supply 80% of the complex's output to South India's growing petrochemical and automotive sectors.

This initiative aligns with India's goal to become a major refining hub, as Western nations reduce crude processing capacities. BPCL also plans to expand its renewable energy portfolio to 10 GW by 2035, explore joint ventures for refineries, and advance operations in the $20 billion Mozambique LNG project.

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US Oil Exports to China Halve as Demand Shifts to Other Sources

US crude oil exports to China fell by 46% in 2024, dropping to 81.9 million barrels from 150.6 million the previous year, as China's economic slowdown and increased adoption of electric vehicles and liquefied natural gas reduced its crude demand. China, now the sixth-largest buyer of US oil, imported 26% of its seaborne crude from Russia, Iran, and Venezuela, up from 24% last year, while Middle Eastern oil still dominates at 60%.

In contrast, Europe remains the top destination for US crude for the third consecutive year, with the Netherlands importing 194 million barrels, a 12% increase. South Korea ranked second, importing 166 million barrels, partly offsetting reduced crude supply from Kazakhstan. These shifts highlight changing global oil trade dynamics amid evolving energy consumption patterns.

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Peru Declares Environmental Emergency After Pacific Oil Spill

Peru has declared a 90-day environmental emergency following an oil spill at the Talara refinery, where Petroperu's pre-shipment maneuvers caused crude to contaminate 10,000 square meters of seawater and impact at least seven beaches. The spill has damaged local wildlife, coastal plants, and disrupted fishing activities.

Petroperu deployed clean-up crews, boats, and drones to monitor and mitigate the spill, coordinating with local authorities to maintain economic and tourist activities. However, affected fishermen have reported significant losses and criticized the company's response. The emergency declaration aims to support recovery and remediation efforts to address the environmental damage.