
January 24, 2025/Oilprice.com
Michael Kern
Editor, Oilprice.com
Oil markets have been fully focused on Trump this week, with particular attention being paid to his tariff threats and whether he will follow through with them.
Uncertainty surrounding Trump’s tariff threats on Canada and Mexico has been the key theme this week, with the oil markets awaiting February 1 to see whether it’s all part of a negotiation tactic or might become a reality. The US President has also called on OPEC to immediately increase oil production to lower oil prices, creating another point of contention between the cartel and the White House as ICE Brent ticked lower to $79 per barrel.
Venture Global IPO Disappoints. US LNG developer Venture Global (NYSE:VG) raised $1.75 billion from the first IPO of Donald Trump’s second presidential term, selling 70 million shares at $25 each, notably lower than the $2.3 billion target put forward initially with a $40-46 per share price.
Trump Eyes Venezuela Sanction Snapback. US President Donald Trump announced that his administration would stop buying crude oil from Venezuela, potentially rescinding the 2022 Chevron waiver that allowed the US major to ramp up production to 200,000 b/d across the country.
Bloomberg Steps In to Fund UN Climate Body. Former New York mayor Michael Bloomberg said his philanthropy arm would provide funding to the budget of UNFCCC, the United Nations’ climate body, trying to offset the financing void created by Trump withdrawing the US from the Paris agreement.
Houston Refinery Readies for Full Shutdown. The 263,000 b/d Houston refinery operated by chemicals giant LyondellBasell (NYSE:LYB) will begin the first phase of its permanent closure this coming weekend, seeking to halt operations fully by the end of Q1 2025 as runs in the Gulf Coast are set to decline.
China Hunts for New Downstream Markets. The government of Sri Lanka signed an agreement with Chinese state-controlled oil firm Sinopec (SHA:600028) to expedite the construction of the $3.7 billion 200,000 b/d Hambantota refinery, quadrupling the South Asian country’s refining capacity.
Alberta Quietly Lifts Coal Mining Moratorium. The Alberta government has tacitly rescinded its 2022 moratorium on new coal exploration in the eastern slopes of the Rocky Mountains, reacting to a flurry of lawsuits launched by coal miners that seek a combined $15 billion in lost revenues and sunk costs.
UAE Doubles Down on Shipping Expansion. ADNOC, the national oil company of the UAE, transferred its own tanker fleet to Singapore based shipping giant Navig8 after it bought 80% of the firm for $1.04 billion and committed to purchase the remaining 20% by mid-2027 for $335 million to $450 million.
Service Giants Warn of American Drilling Slowdown. US oil service giant Halliburton (NYSE:HAL) warned of a deceleration in drilling activities across North America as it reported a $615 million profit in Q4 2024, with sales dipping 7% quarter-over-quarter in the United States to $2.2 billion on ‘softer’ demand.
Italy Prepares Full U-Turn on Nuclear. Having banned nuclear energy almost 40 years ago, Italy is now finalizing terms for a full regulatory U-turn by the end of 2027, allowing the use of nuclear power as Rome believes it could save $18 billion in decarbonization costs if it re-introduces nuclear energy.
US Wind Projects Go from Bad to Worse. Danish wind energy major Orsted (CPH:ORSTED) posted an impairment charge of $1.7 billion in Q4 2024, citing ongoing delays and higher US financing costs for its 924 MW Sunrise Wind project, 30 miles east of the New York coastline, now expected to start in late 2027.
LNG Freight Rates Collapse to Historic Lows. An overhang of ballasting LNG carriers and limited cargo availability sent LNG freight to historic lows as Atlantic carrier day rates slumped to $6,500 per day whilst in Asia daily rates garnered $8,000 per day, with no contango in the gas futures curve to support storage.
Burning Gas Stocks, Europe Sticks to Inventory Targets. Whilst EU gas storage sites continue drawing down inventories and are currently 58% full, Brussels has indicated that it would extend binding storage targets for every member country until 2027 in case of further supply shocks.
Trump Goes on the OPEC Offensive. US President Donald Trump called on OPEC to bring down the cost oil and asked the Saudi authorities to invest $1 trillion in the US economy, almost double of the 600 billion that Riyadh planned to invest in 2025-2029.