Oil markets will be fully focused on OPEC+ this week after talks between Russia and Ukraine appeared to break down, the U.S. negotiations with Iran stalled, and Trump delayed his trade war with the EU until July.
- As the US hurricane season officially starts June 1, oil markets have been placing their bets on potential supply disruptions as the NOAA predicts the 2025 Atlantic hurricane season to be above normal.
- The agency is forecasting 13 to 19 named storms, of which 3 to 5 are expected to become major hurricanes (winds of 111 mph or higher), citing high heat content in the Atlantic Ocean and reduced trade winds.
- Last year’s largest hurricane, Francine, prompted the shutdown of three major refineries (ExxonMobil’s Baton Rouge, Marathon’s Garyville, and Shell’s Norco), but led to limited equipment damage, allowing for a relatively swift resumption of downstream activities.
- Meanwhile, US gasoline demand as gauged by the Energy Information Administration dipped to a 5-year low, at 8.8 million b/d in the week ending May 16, reversing a streak of four consecutive weekly increases.
Market Movers
- Saudi national oil company Saudi Aramco (TADAWUL:2222) is reportedly exploring asset sales to generate revenue, having bought into US LNG firm MidOcean and Latin American retailers Esmax and Primax in recent months.
- Bahrain is currently negotiating a short-term LNG supply deal with Russia, potentially importing up to 1.5 mtpa of liquefied natural gas from Novatek’s (MCX:NVTK) portfolio.
- Li Zhenguo, founder of China’s largest solar energy manufacturers Longi Green (SHA:601012), will step down as CEO after the company posted a $1.2 billion loss last year and is set so remain negative in 2025, too.
- Meeting with Libya’s Oil Minister Khalifa Abdul Sadiq this week, London-based oil major Shell (LON:SHEL) is looking to regain its footprint in Libya after it divested all its assets in Area 89 in May 2012.
Tuesday, May 27, 2025
Last week’s scare of President Trump forcing a US-EU tariff war has subsided after the mulled 50% tariff was postponed until at least July 9, keeping ICE Brent relatively range-bound at $65 per barrel. With Russia-Ukraine talks failing to achieve anything substantial, and US-Iran negotiations remaining similarly static, OPEC+ will be the main price setter over the next week.
Saturday to Prompt New Oil Price Drop. Eight OPEC+ countries that committed to voluntary production cuts will meet on May 31, one day earlier than previously assumed, as the ‘Great Eight’ is expected to bring back another 411,000 b/d of production into July, the third consecutive month of expedited unwinding.
OPEC’s Hidden Spot to See More Production. The Neutral Zone, an oil-rich territory shared by Saudi Arabia and Kuwait, could see more production very soon after the two countries announced a new oil discovery there north of the Wafra field, the first find since output was resumed in 2020.
Norway’s Gas Woes Lift European Gas. European TTF benchmark gas prices rose to their highest since early April, surpassing €37 per MWh on Monday, after Norway’s largest gas field Troll was forced to extend a partial outage until May 31 due to a compressor failure, cutting 34.6 MCm/day.
Earthquakes Shake Copper Production Outlook. Canadian miner Ivanhoe Mines (TSE:IVN) said that it had suspended its 2025 production guidance of 520,000-580,000 tonnes for the Kamoa-Kakula giant copper mine in the Democratic Republic of Congo, citing underground tremors.
Trump Approves Nippon Steel’s Bid. Reversing Joe Biden’s veto on Nippon Steel’s $14 billion acquisition of US Steel (NYSE:X), President Trump approved the deal in a surprise move, creating the world’s third-largest steel producer, following only China’s Baowu Steel and Luxembourg’s ArcelorMittal.
Libya Halts Pipeline After Desert Oil Leak. Libya’s National Oil Company halted parts of the 300,000 b/d pipeline system bringing crude oil to the country’s largest refinery in Zawiya after a huge oil leak was discovered in the desert just south of Zawiya, seeking to determine the causes of the spillage.
Exxon Moves on With Top Arbitration Deal of 2025. US oil major ExxonMobil (NYSE:XOM) and fellow major Chevron (NYSE:CVX) started their London arbitration process to determine the fate of the $53 billion Chevron-Hess deal, with Exxon claiming first refusal right on Hess’ Guyanese assets.
Pitching a Trade Deal, South Africa Eyes US LNG. South Africa has offered to buy US liquefied natural gas over a 10-year period, a trade flow worth around $1 billion per year, as part of a bid to secure a comprehensive trade deal, having been temporarily hit with a 30% import tariff rate.
EPA to Scrap Greenhouse Gas Plant Limits. The US Environmental Protection Agency, led by Lee Zeldin, has reportedly drafted a plan to eliminate all greenhouse gas emission limits from coal and gas-fired power plants across the country, saying those emissions have no major impact on public health.
Tanzania Readies Huge Licensing Spree. 11 years after Tanzania’s last upstream bidding round was held, the African country is preparing its 5th licensing round, which would see 26 blocks on offer, of which 23 will be located offshore, seeking to resuscitate the stalled $42 billion Tanzania LNG project.
Trump’s Tariffs Add Billions in Customs Revenue. Revenue from US customs duties rose to $16.5 billion in April, effectively doubling the country’s collection of trade levies compared to March, with most of President Trump’s tariff impact coming via the 25% steel and aluminium duty as well as an equivalent levy on imported cars.
Fire Halts Ecuador’s Biggest Refinery. Ecuador declared an emergency and halted all operations at its 110,000 b/d Esmeraldas refinery, the largest in the country, after a fire broke out at a fuel oil storage tank, with national oil firm Petroecuador stating it needed to shut down out of precaution.
Indonesia Still Sees a Future for Its Coal. Indonesia made a U-turn on its previous pledge not to build any new coal-fired power plants with its new 10-year power supply plan, seeking to add 69.5 GW of new generation capacity by the end of 2034, factoring in economic growth of 8% by 2029 compared to the current 5%.
By Michael Kern for Oilprice.com
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