7th April 2025

Good morning team - this is Both Barrels. Your daily dose of all things oil, gas, and energy. Here’s what hit the wires today:

• ⁉️ Fight or fold?

• 😬 US drillers under pressure

• 📉 The rout continues

• 💸 A $740m clean up bill

• ➕ plus China’s US LNG dry patch; Woodside sells $5.7bn Louisiana LNG stake; rig count rises; Shell and SLB’s digital partnership; Kurdistan saga drags on; Petrobras builds an animal center; and barrels more.

Let’s go.

📈 THE NUMBERS

Markets started this week as they finished last: deep in the red. WTI fell by a further 3% this morning to $60/bbl.

Meanwhile, the Chinese stock market saw its single largest daily fall since the financial crisis of 2008. Ooof.

Hold onto your hats. This is going to be a bumpy ride.

🗞️ WELL-HEADLINES

 🗽 North America

• US drillers under pressure - with WTI dropping by over $10/bbl last week, many US drillers will be running at a loss (assuming they haven’t hedged some of their production). As a short cycle, flexible source of production, expect to see US drilling activity slow in the coming months if oil prices don’t recover. This has always been Trump’s energy Catch 22: he wants both low oil prices and rising US shale output, but he can’t have both.

• Woodside sells $5.7bn stake in Louisiana LNG stake to Stonepeak - the huge 27.6 mtpa project is under development, with the first stage alone set to cost ~$16bn. Woodside said it is looking for more partners in the project.

• Chevron slapped with $740m Louisiana clean up bill - a court ordered the US major to pay the amount for allegedly not properly restoring wetlands along southeast Louisiana's coast. The ruling, which Chevron said it would appeal, is from a lawsuit filed back in 2013.

• New contractor lands $1.4bn SPR management gig - the aptly named Strategic Storage Partners will take over from Fluor the management of the US Strategic Petroleum Reserve for at least 5 years from June this year. The SPR is the largest stockpile of crude oil on the planet.

• Bump in US oil rigs - just as the bottom falls out of oil markets, US drillers have added 5 more rigs to the operational fleet, taking the total to 489, its highest level since June. There tends to be a 1-3 month lag between movements in oil prices and the reaction of the rig count.

🏰 Europe

• Shell and SLB sign digital partnership - the supermajor has agreed to roll out SLB’s Petrel software across its assets worldwide which is apparently “powered by advanced AI to deliver seismic interpretation workflows” and will reduce operating costs.

🕌 The Middle East

• Kurdistan export saga drags on - ~500 kb/d of crude exports from Iraqi Kurdistan have been suspended for over two years due a dispute over payments between the Iraqi central government and the Kurdistan government. It had seemed that a deal was reached in February but apparently not, and talks between the two parties have stalled again.

• Jordan investing in flagship gas field - the country’s NOC is preparing a tender for drilling 80 new wells over the next three years at its onshore Risha gasfield. The plan aims to increase production from ~45 mmcf/d today to 200 mmcf/d by 2030.

⛩️ Asia & Oceania

• China’s US LNG dry patch - according to Bloomberg, the world’s largest buyer of LNG hasn’t imported a single cargo of LNG from the world’s largest exporter for 60 days. LNG is a key battleground in the new US / China trade war. And Europe is the winner as more gas is freed up to head to its markets instead.

🦁 Africa

• Nothing much going on here.

🗿 Central & South America

• An animal care center for an offshore permit - Petrobras is nearing an approval to drill in the Foz do Amazonas region of Brazil after finishing the construction of an animal care center designed to assist animals in the event of an oil spill. This was a key demand of the Brazil’s environmental agency. Fair enough - can’t argue against more wildlife protection.

🌍 GEOPOLITICS & MACRO

• Fight or fold? - when the biggest baddest kid in the playground starts throwing his weight around, you can either accept the law of the jungle and pay whatever homage is needed to avoid his ire, or you can try and resist. Over 50 countries, including Taiwan and India, have taken the former option, and have been frantically calling the White House over the weekend to negotiate trade agreements. On the other hand, China has hit back and Europe is lining up retaliatory tariffs targeting a wide array of US goods from meat, to dental floss, to diamonds. Meanwhile, Trump has told American’s to “hang tough” amid the turmoil.

💨 CARBON, CLIMATE, & OTHER ENERGY STUFF

• All quiet here.

🛢️ BOTTOM OF THE BARREL

👋 BEFORE YOU GO

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

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