13th January 2025

Happy Monday team. Here’s what went down over the weekend in all things oil, gas, and energy:

• ⏫ Brent breaches $80

• 🥶 Polar vortex

• ⛔ Sanctions futility

• 🦘 Australia’s gas madness

• ➕ plus Just Stop Oil t**ts at it again; rig count slips; Venture shooting for $110bn; Japan’s nuclear renaissance; the “extinction” of UK chemicals; LNG flexibility in action; and barrels more.

Let’s dive in …

📈 THE NUMBERS

Oil prices ripped, with Brent rising above $80/bbl for the first time since October on the news of fresh US sanctions on Russia’s oil tanker sector (more on that below).

US gas prices surged too, thanks to an “Arctic blast” that is enveloping most of the country.

🗞️ WELL-HEADLINES

 🗽 North America

• US gas prices pop ahead of “polar vortex” - wrap up, things are getting chilly across large swathes of the US. Natural gas prices have ripped to $4.2/MMBtu as demand for heating surges.

• Venture shooting for $110bn IPO - the LNG developer is starting to pitch to investors for its upcoming IPO and is hoping the partial listing will give it a huge 12-figure valuation.

• Rig count slips - the fleet of operational oil rigs in the US shrunk by 2 last week to 480, while gas rigs fell by 3 to 100. The oil rig count has been stuck around 480 for months now as it seems the US shale patch may have reached a sort of equilibrium at current oil prices.

• Glenfarne Group unveiled as Alaska LNG developer - it was announced last week that the giant $44bn LNG project had found a lead developer.

🏰 Europe

• Asian LNG cargoes divert to Europe - in the past week, four US LNG cargoes bound for Asia changed course to Europe to take advantage of higher gas prices. Europe needs to replace Russian volumes while demand in Asia is currently subdued.

• UK gas levels “concerningly low” - Centrica, the UK’s largest gas supplier, has made the warning as freezing weather hits and pushes up demand. UK storage sites are around half full, and 26% lower than at the same point last year.

• “Unexploded ordnance device” near Shell pipeline - the coastguard is helping to identify and remove the explosive that Shell found near the FLAGS pipeline, offshore UK.

🕌 The Middle East

• Total breaks ground on $10bn Iraqi project - work has begun at the ArtawiGas25 facility to handle associated gas from Ratawi field. The facility is part of the GGIP project which is a $10bn multi-energy project designed to improve the development of Iraq’s natural resources and improve the country’s electricity supply.

⛩️ Asia & Oceania

• Australia’s gas madness - despite Australia being the third largest LNG exporter in the world, heavily populated southern parts of the country may soon need to import LNG as anti O&G regulation has hit local gas production. Oh the irony. “We don’t want to produce here because we’re so green but, sure, we don’t mind importing what we need”.

• Yinson nears $1bn funding deal - the Malaysian FPSO player is set to close a big funding round with investors including Abu Dhabi. FPSO manufactures are all in need of cash to finance the building of the giant vessels in high demand in offshore provinces like Brazil and Guyana.

🦁 Africa

• Namibia refutes Shell claims - after Shell announced last week that it was writing off an offshore discovery as uneconomic, the wannabe producer country said the decision was “unfortunate” and that it would develop the resources with the “right partner”.

🗿 Central & South America

• A quiet weekend in these parts

🌍 GEOPOLITICS & MACRO

• More futile sanctions - the US imposed its “toughest sanctions yet” on Russia, including on large E&Ps Gazprom Neft and Surgutneftegas and their big fleet of crude tankers.

  • The trouble is, as anyone who understands oil economics knows, that producers make or lose fortunes on price, not volume. And predictably, crude prices shot up on the news of these sanctions.

  • If the West really wanted to hurt Russian coffers it should flood the market with crude to send oil prices to the floor, not choke supply.

• US dollar hits two year highs - a strong dollar, all else being equal, puts downwards pressure on oil prices as it reduces demand from buyers of oil holding non-dollar currency. The dollar is climbing following strong US labor market data that lowers the chances of more interest rate cuts this year.

💨 CARBON, CLIMATE, & OTHER ENERGY STUFF

• Japan returns to nuclear - the Fukushima disaster in 2011 was ground zero for a global wave of nuclear opposition and closures, but the host country of that fateful day has left the incident firmly in the rear-view mirror and has now sensibly restarted most of its reactors. Over to you, Germany.

• “Extinction” for UK chemicals industry - Sir Jim Ratcliffe, CEO of Ineos, said we “are witnessing the extinction of one of our major industries as chemical manufacture has the life squeezed out of it” by rising energy prices and carbon taxes. He accused government energy policy of “de-industrialising” the country and shifting emissions-heavy production overseas. I couldn’t agree more. It’s economic suicide.

• Just Stop Oil vandalize Charles Darwin’s grave - a pair of jobless lunatics spray painted “1.5 is dead” on the tombstone in Westminster Abbey, London. You know what else would be dead without oil? Billions of people.

🛢️ BOTTOM OF THE BARREL

👋 BEFORE YOU GO

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Thanks for reading. Have a day out there. 🛢️🛢️

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