The US Department of Treasury implemented its most sweeping round of sanctions as it OFAC-listed 183 individual oil tankers, doubling the list of ships heretofore targeted by the US, UK, and the European Union.
- Up until now, OFAC had designated 39 tankers that carried Russian oil or products since it started its sanctioning spree in October 2023, with 33 penalized ships failing to lift cargoes since they were lifted.
- With 117 ships out of the 183 specializing in crude supplies, accounting for roughly a quarter of the 430 tankers that were involved in Russian crude exports last year, the sanctions are poised to have a knock-on effect on tanker availability for Iranian and Venezuelan exports, too.
- The biggest disruption seems to be taking place in Russia’s Far Eastern exports of the medium sweet ESPO grade as freight costs have tripled on Monday alone, with a voyage to northeast China rising to 5 million on a lumpsum basis.
Market Movers
- UK energy firm BP (NYSE:BP) has postponed its usual capital markets event after the company’s CEO Murray Auchincloss had to undergo a ‘planned medical procedure’, returning to his job in the second half of February.
- US oil major ExxonMobil (NYSE:XOM) has made a discovery with its first-ever wildcat in offshore Egypt after its Nefertari-1 well in the North Marakia block found commercial reserves of natural gas.
- US nuclear power giant Constellation Energy (NASDAQ:CEG) agreed to buy privately-held natural gas and geothermal firm Calpine Corp for $16.4 billion, turning it into the country’s independent power provider.
Tuesday, January 14, 2025
The sheer scope and ambition of US sanctions on Russia, arguably the last big energy industry move of the Biden Administration before passing the baton to Donald Trump, saw ICE Brent futures settle above $81 per barrel this Monday
. This marks the first time that oil has traded that high since August 26 of last year and even a potential ceasefire in Gaza couldn’t push prices back below the $80 per barrel threshold.
White House Rolls Out Sprawling Russia Sanctions. Global freight rates started to soar after the US Department of Treasury sanctioned 183 tankers that shipped Russian oil along with the OFAC listing of producers Gazprom Neft and Surgutneftegas, a move only reversible by a Congress vote.
LNG Giant Frenzies Market with Monster IPO. Arguably the largest IPO happening this year, US LNG developer Venture Global is seeking up to $110 billion in valuation in its NYSE initial public offering as it plans to raise at least $2.3 billion with the offering of 50 million shares, priced at $40-46 each.
EU Plans Let Gas Price Cap Expire. The European Union intends to let its €180 per MWh natural gas price cap expire as scheduled at the end of this month, first introduced in December 2022 to limit soaring gas prices but now no longer deemed necessary as TTF trends around €50 per MWh.
Ukraine Drones Target Key Pipeline Compressor. The Russian Defence Ministry stated that Ukrainian drones attacked the Russkaya compressor station in the south of the country, incurring minor damage to the 31.5 bcm/year Turkish Stream gas pipeline, accusing it of energy terrorism.
Oil Sands Output Rises to Record Highs. Crude oil production in Alberta reached an all-time high of 4.2 million b/d in November, the most recent month covered by the province’s energy regulator AER, with relatively stagnant oil sands output boosted by rising condensate volumes.
Saudi Arabia Mulls Uranium Enrichment. Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman announced that Riyadh would seek to enrich and market uranium fuel further down the road, raising concerns that their 2018 promise to develop nuclear weapons if Iran did might be true.
Utilities Bear the Blame of LA Fires. A group of homeowners and businesses filed a lawsuit against US utility firm Edison International (NYSE:EIX) for allegedly causing the deadly Eaton Fire due to improper maintenance of power lines, sending the company’s stock plummeting by 25%.
US Steel Finds a New Suitor. US steel manufacturer Cleveland-Cliffs (NYSE:CLF) is reportedly preparing an all-cash bid for US Steel (NYSE:X), teaming up with Nucor (NYSE:NUE) and offering in the high $30s per share, having its previous 2023 takeover bid rejected.
Chinese Mining Giants Eye Mergers. The post-COVID M&A spree has finally reached China as well as the country’s top copper miner Zijin Mining (SHA:601899) is reportedly in talks to purchase a controlling interest in lithium producer Zangge Mining, in a deal worth $6.4 billion.
UK Nuclear Costs Balloon Out of Control. The cost of building Britain’s next nuclear plant, the Sizewell C project in southeast England, could require as much as $49 billion as projected costs of developer EDF have doubled compared to initial estimates, eyeing a 2029 commissioning.
Norway Awards 53 Licenses in 2025 Auction. Norway’s Energy Ministry awarded stakes in 53 offshore oil and gas exploration blocks in its annual licensing round, slightly down compared to last year’s 62 awards, with the country’s major Equinor (NYSE:EQNR) taking a stake in 27 of them.
Mali Starts to Renationalize Metals Industry. The government of Mali has started to enforce its own provisional order to seize all gold inventories owned by Barrick Gold (NYSE:GOLD) at the Loulo-Gounkoto site, marking a new escalation as the cost of seized gold could reach $400 million.
LME Flirts with Idea of Chinese Expansion. The London Metal Exchange is finalizing the procedure of approving Hong Kong as a potential warehouse location for its global storage network, a long-mulled step ever since HKEx bought LME in 2012 as Hong Kong remains the gateway for mainland China.
