2025.02.03

Trump considers Feb.18 for oil tariffs, plans lower rate for Canada

President Trump plans to impose tariffs on oil and gas imports, potentially reducing the levy on Canadian crude to 10% from 25%. This could greatly impact the U.S. oil industry, as the country imports 4 million barrels of oil per day from Canada. Analysts warn that tariffs could lead to reduced fuel production and higher costs for consumers. Oil refiners such as Phillips 66 and Valero are preparing for the impact of the tariffs, with concerns over changes in oil trade policies.

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Big Oil Pessimistic as Refinery Profits Remain Under Pressure

Big Oil executives are not optimistic about refinery profits improving in the near future, as Chevron, Exxon Mobil, and Shell all reported significant hits to their fourth-quarter earnings due to declining margins for producing fuel. Increased global refining capacity and sluggish demand growth are contributing to the pressure on refining margins. While Chevron, Exxon Mobil, and Shell are focusing on controlling what they can to recover, independent refiners like Phillips 66 and Valero are facing significant declines in profits due to faltering fuel demand in the US and China. Investors are also concerned about potential tariff threats from US President Donald Trump, which could further impact refining costs. TotalEnergies and BP are set to report their fourth-quarter results soon, with BP warning of a potential decrease in profit due to declining refining margins and maintenance activities.

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OPEC+ expected to maintain output plans despite US pressure

OPEC+ is unlikely to increase output beyond existing plans despite pressure from U.S. President Trump. The meeting on Monday is expected to maintain current output levels, with discussions on Trump's efforts to boost U.S. oil production. Oil prices have been volatile, supported by concerns about supply disruptions and economic impacts of tariffs. OPEC+ members are currently holding back output in an effort to stabilize the market, with plans to gradually increase production beginning in April. The group is expected to make a final decision on the April output hike in early March.

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Libya's state oil firm looks to boost output, new chairman says

Libya's National Oil Corporation (NOC), with new chairman Massoud Suleman, aims to increase oil production and transparency in Libya to recover from years of instability. Production has been disrupted since Gaddafi's ousting in 2011. The firm wants to raise production to 2 million bpd with $3-$4 billion, enhancing transparency through operational streamlining. Suleman is working to stop the crude-for-fuel swap program and secure a budget for refined products, despite Libya's OPEC membership exempting it from output cuts.

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Indian refiners seek non-sanctioned Russian oil as discounts narrow

Traders have resumed offering Russian oil to Indian refiners at narrower discounts for March delivery due to U.S. sanctions, despite disruptions in supply. India has become the largest market for discounted Russian oil, with fewer cargoes offered and Urals crude discounts narrowed to $2.50-3 per barrel. Indian refiners are seeking non-sanctioned Russian supplies and requesting more documentation to comply with regulations. India is also mitigating the impact of sanctions on oil imports by managing payment settlements through banks.

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Crude tanker market bounces back with increase in VLCC fixtures

Following a temporary slowdown in the crude tanker market after the New Year, there has been a rebound in activity. Mid-week saw an increase in VLCC fixtures from the US Gulf, with the price spread between Middle Eastern oil and West Texas Intermediate reaching $7 per barrel. This led to a rise in Baltic Exchange's VLCC time-charter equivalent assessment to $41,362 per day. Tankers International data showed an increase in VLCC fixtures, with notable deals including the chartering of the Agios Nikolas for a voyage from the US Gulf to China. Suezmax rates also saw an increase, but market oversupply limited the jump. The suezmax market in the Middle East had some activity, but the tonnage list remained long. Overall, the tanker market seems to be on an upward trajectory, with limited downside potential.

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