Latest news with #non-OPEC
Focus Malaysia
7 hours ago
- Business
- Focus Malaysia
Local energy sector stays cautious as transition policies dampen investor appetite
AVERAGE Brent crude oil for Jul calendar year 2025 (CY25) slipped -17% year-on-year (yoy) and -0.4% month-on-month (mom) to an average of USD69.55pb. The decline was due to: (i) Increased global supply by non-OPEC+ countries. (ii) OPEC+ unwinding voluntary cuts. (iii) Slow demand growth from economic slowdown, shift towards clean energy and lacklustre consumption in US and China. (iv) Higher oil inventory builds. This was offset by the ongoing geopolitical tensions, with the Iran-Israel conflict temporarily spiking oil prices. However, these are quickly reversed as underlying supply-demand fundamentals were reasserted. The KL Energy Index index's Jul CY25 close was lower by -21.5% yoy but gained +1.8% mom. The Department of Statistics Malaysia reported that PPI for the mining sector fell significantly due to lower prices for crude petroleum and natural gas. This sustained downturn in producer prices likely had a cumulative negative effect on the profitability and market valuation of Malaysian energy companies. The shift towards renewable energy and energy transition policies in Malaysia created a cautious investment environment for traditional fossil fuel companies. 'However, we noted that after dipping to a two-month low in early July CY25, the index experienced a technical rebound, giving its higher monthly close than June CY25,' said MBSB Research. The first half of CY25 is challenging for most of the major players. Most had indicated lower revenue and net income, most notably for the integrated oil and gas companies. ExxonMobil, Chevron and Shell saw substantial declines due to the lower oil prices and the slowdown in global economy that hampered demand for their services and products. Meanwhile, OGSE companies which are tied closely to the upstream division, like Schlumberger, Baker Hughes and Weatherford, faced headwinds. The drop in earnings was a direct consequence of lower upstream investment and capital discipline practiced within these OGSE companies. All in all, we maintain our enutral stance on the sector. The Malaysian oil and gas sector is currently in a state of equilibrium. The negative factors—lower commodity prices, reduced capex, and a challenging services market—are largely counterbalanced by the positive factors—the resilience of the natural gas and LNG sector, stable midstream demand, and a strategic long-term outlook. The sector is not expected to see a significant surge in earnings or valuations in the near term and is highly likely to be selective by divisions. However, the sector also has strong foundational elements that prevent a major collapse, further ensuring that it will perform broadly in line with the wider market, with limited short-term catalysts, barring any events that would warrant a spike in oil and gas prices and further sustain the surge. —Aug 12, 2025 Main image: Future Bridge
India.com
3 days ago
- Business
- India.com
Revealed: This Indian private company bought the most oil from Russia, the name is..., now tariff may affect profit and margin both
Revealed: This Indian private company bought the most oil from Russia, the name is..., now tariff may affect profit and margin both As the Indian government continues to gauge the impact of additional 25 per cent tariff, total 50 per cent, announced by US President Donald Trump, the Indian company, which is the largest buyer of Russian oil, has warned of far reaching consequences of Washington's arbitrary decision. According to a report, Reliance Industries is India's largest buyer of Russian crude oil. Reliance Industries, in its annual report for the year ending March 2025, underlined that global crude oil prices remained volatile due to geopolitical tension in the Middle East, shifting shipping routes, OPEC and non-OPEC output decisions and other reasons. However, the company did not mention US tariff imposition in the report. India historically bought most of its oil from the Middle East, including Iraq and Saudi Arabia. However, things changed when Russia invaded Ukraine in February 2022. India, the world's third-largest crude importer after China and the US, began snapping up Russian oil that was available at a discount after some in the West shunned it as a means to punish Moscow for its invasion of Ukraine. Why has Trump singled out India? Earlier this week, US President Donald Trump on slapped an additional 25 per cent tariff, raising it to 50 per cent, on goods coming from India as penalty for New Delhi's continued purchase of Russian oil, a move that is likely to hit sectors such as textiles, marine and leather exports hard. The United States has imposed this additional tariff or penalty for Russian imports only on India while other buyers such as China and Turkey have so far escaped such measures. The 30 per cent tariff on China and 15 per cent on Turkey is lower than India's 50 per cent. What is Trump's stance? Donald Trump stated that trade negotiations with India will not proceed until the ongoing tariff dispute is resolved, after his administration decided to double tariffs on Indian imports. When pressed by news agency ANI at the Oval Office, whether he expected talks to resume in light of the new 50% tariff. 'No, not until we get it resolved,' he replied.
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Business Standard
5 days ago
- Business
- Business Standard
Reliance flags crude supply risks amid US tariff blow on Indian exports
Reliance warns of refining margin pressure as US doubles tariffs on Indian goods to 50 per cent over Russian oil imports; 25 per cent came into effect on Thursday, second 25 per cent begins August 27 New Delhi Indian oil major Reliance Industries has raised concerns that ongoing global tensions, including tariffs and sanctions, may disrupt oil trade and hit refining margins. In its latest annual report, the Mukesh Ambani-led company pointed to volatile crude prices driven by sanctions, shifting tariff rules, and output decisions by the Organisation of the Petroleum Exporting Countries (OPEC) and non-OPEC countries, news agency Reuters reported Market reaction: Oil stocks slide Shares of oil marketing firms dropped between 0.6 per cent and 2 per cent on Thursday amid a weak broader market. The Nifty 50 index was down 0.6 per cent, and Reliance Industries' stock slipped 1 per cent following new tariff announcements from the United States, Reuters reported. US imposes steep tariffs on India The US has launched a new wave of tariffs targeting dozens of countries, with India facing some of the highest hikes. A 25 per cent tariff on Indian goods came into force on Thursday under a directive signed last week by President Donald Trump. In a further escalation, Trump announced an additional 25 per cent duty specifically targeting India's energy ties with Russia — effectively doubling the tariff burden on Indian exports to 50 per cent. The second round of tariffs is scheduled to take effect on August 27. What's in the executive order? The latest order, titled 'Further Modifying the Reciprocal Tariff Rates', outlines revised duties on exports from nearly 70 countries: • India: 50 per cent (after both rounds) • Laos, Myanmar: 40 per cent • Pakistan: 19 per cent • Sri Lanka: 20 per cent • UK: 10 per cent • Japan: 15 per cent The White House has accused India of violating sanctions through its 'direct or indirect' imports of Russian crude oil, arguing that such trade undermines efforts to isolate Moscow amid the Ukraine war. 'The Government of India is currently directly or indirectly importing Russian Federation oil,' the executive order stated. Trump justified the move under the International Emergency Economic Powers Act, claiming the action is 'necessary and appropriate' to address the threat from Russia and uphold emergency measures first announced in 2022. What's covered and what's exempt Goods that are already shipped or cleared before September 17 will not face the new duties. But for everything else, the 25 per cent surcharge will apply on top of existing tariffs. Economic impact: Growth under stress According to Goldman Sachs, the fresh tariff hike could slow India's economic growth. The firm estimates a 0.3 percentage point drop in annualised GDP growth, in addition to the 0.3 pp hit already expected from the earlier April 2025 tariffs. Once various exemptions are factored in, Goldman projects that the effective average tariff rate on Indian exports to the US will rise to around 32 per cent.
Time of India
5 days ago
- Business
- Time of India
Reliance Industries warns geopolitical tensions, tariffs may threaten global trade
Reliance Industries , led by Chairman Mukesh Ambani , issued a cautionary note in its annual report on Thursday, saying that ongoing geopolitical and tariff-related uncertainties could disrupt global trade flows and impact the demand-supply equilibrium, reports news agency Reuters. The company highlighted the volatility of crude prices, citing evolving sanctions, changing tariff regimes, and production decisions by both OPEC and non-OPEC as key contributing factors. 'If we cave under pressure, we risk losing access to cheaper Russian crude, which could squeeze refining margins. That's a risk for Reliance and oil marketing companies,' said Pramod Gubbi, co-founder at Marcellus Investment Managers. The warning from Reliance comes as oil marketing companies experienced a downturn, trading between 0.6 per cent and 2 per cent lower in a weak market where the benchmark Nifty 50 was down 0.6 per cent. Shares of Reliance Industries were already down one per cent following an announcement from the US President Donald Trump, who doubled down on India tariffs by imposing an additional 25 per cent duty.
Economic Times
6 days ago
- Business
- Economic Times
India caught in a bind on Russian crude after Trump tariff, may look to diversify further
Indian refiners are likely to go slow on import of oil from Russia and may double down on efforts to diversify their import basket further as New Delhi assesses the impact of US President Donald Trump's announcement of additional tariffs Trump issued an executive order on Wednesday doubling tariffs on goods from India to 50 per cent for continuing to import oil from Russia, which purportedly uses that revenue to fund its war with Ukraine. While the government has given oil companies a free hand to plan crude purchases keeping commercial viability in mind, refiners may look to boost imports from the US and other non-OPEC suppliers as a balancing act, three sources with knowledge of the matter said. After the latest tariff order, refiners would be adopting a cautious approach to Russian imports, they said, adding the government has so far not told them to stop or go slow on purchases from Moscow. Soon after Trump's executive order, officials went into a huddle, discussing possible fallout and alternatives. No official comment was immediately available on the latest US tariffs. India buys about 88 per cent of its crude oil, which is converted into fuels like petrol and diesel, from overseas. Russian oil made up for hardly 0.2 per cent of all crude oil that India imported till 2021. After Moscow invaded Ukraine, Russian oil was available at a discount to international benchmarks due to Western sanctions, and was quickly lapped up by Indian refiners. Russia is now India's largest oil supplier. India imports about 5 million barrels of oil a day, of which 1.6 million came from Russia in July. Sources said discounts on Russian oil have shrunk to less than USD 2 per barrel, not offering much economic benefit for buying from Moscow. But it will be near impossible to swiftly unwind the Russian imports given the volumes India now buys, they said, adding Middle East suppliers, which were the main source in the pre-Ukraine war era, may see a resurgence with the largest volumes. India is the largest importer of Russian crude ahead of China and Turkey. The US tariffs follow the European Union ban on the import of petroleum products (fuel) made from Russian crude starting in January 2026. India's Reliance Industries Ltd and Russian oil giant Rosneft-backed Nayara Energy Ltd will be those hit hard by the sanctions. The two, particularly Reliance, were the biggest exporters of fuel from India to Europe. India historically bought most of its oil from the Middle East, including Iraq and Saudi Arabia. However, things changed when Russia invaded Ukraine in February 2022. India, the world's third-largest crude importer after China and the US, began snapping up Russian oil that was available at a discount after some in the West shunned it as a means to punish Moscow for its invasion of Ukraine. From a market share of just 0.2 per cent in India's import basket before the start of the Russia-Ukraine conflict, Russia overtook Iraq and Saudi Arabia to become India's No.1 supplier, with a share as high as 40 per cent at one point of time. Last month, Russia supplied more than a third of all crude oil imported by India. India bought 68,000 barrels per day of crude oil from Russia in January 2022, according to global real-time data and analytics provider Kpler. That month, Indian imports from Iraq were 1.23 million bpd and 883,000 bpd from Saudi Arabia. In June 2022, Russia overtook Iraq to become India's largest oil supplier. Russian imports peaked at 2.15 million bpd in May 2023 and have varied - depending upon the discount at which the oil was available. But the volumes never slipped below 1.4 million bpd since then, which is more than what India was buying from its top supplier Iraq before the Russia-Ukraine conflict. G7 countries in December 2022 imposed a USD 60 per barrel price cap on Russian crude. Under the mechanism, European companies were permitted to transport and insure shipments of Russian oil to third countries as long as it is sold below the capped price -- an effort to limit the impact of the sanctions on global oil flows but ensure Russia earns less from the trade. Last month, the European Union decided to lower the price cap to USD 47.6 and introduced an automatic and dynamic mechanism for its review in the future. The idea is to keep the cap at 15 per cent lower than the average market price. In addition to stoking India's economy, cheap Russian oil gave refiners lucrative business -- refining that crude and exporting the products to deficit countries. These included the European Union, which had banned direct crude oil purchases from Russia. The bulk of the crude that goes to India from Russia arrives at ports in Gujarat, where Reliance Industries Ltd's Jamnagar refinery, the largest in the world, and Nayara Energy-owned India's second-largest refinery, less than 10 miles away at Vadinar, turned them into fuel.
