Latest news with #non-Opec
New Indian Express
4 days ago
- Business
- New Indian Express
Reliance warns of tariff risks weighing on its crude supplies, but sees strong domestic demand
MUMBAI: Reliance Industries, which runs the world's largest single-location oil refinery with 60 million tonnes of refining capacity, has warned that the continuing geopolitical and tariff-related uncertainties could disrupt trade flows and the demand-supply balance in its oil-to-chemicals business. The company, in the FY25 annual report released Thursday, said though it expects crude prices to remain volatile amid evolving sanctions, changing tariff regimes and output decisions by the oil cartel Opec and non-Opec members, oil demand is likely to maintain growth despite growing electric vehicle adoption as the economy is on a strong footing. In its 2025 oil outlook, the company, which closed the year with the highest ever revenue and net income -- Rs 10.71 trillion and Rs 81,309 crore respectively in FY25 -- said the ramp-up of new refineries may lead to weaker product cracks. "But expected closures can create upside potential for refining margins. Domestic fuel demand is expected to remain healthy with increasing economic activity, while domestic demand for downstream chemical products is expected to grow ahead of the GDP growth rate, driven by demand from infrastructure, packaging, automobiles and agriculture," RIL said. The company further said it remains on track to become net carbon zero by 2035 and is progressing rapidly to set up a 30 gwh modular battery gigafactory for cells, packs, containerised BESS (battery energy storage systems), and the backward integration into battery materials. In his address to the shareholders, company chairman Mukesh Ambani said RIL sees the 'breakneck speed with which the world is changing, reshaped by digital disruption, global shifts, and technological breakthroughs, not as a challenge but as an opportunity. We are reimagining our future and reshaping our businesses to become a new-age deep-tech enterprise.' 'From energy to entertainment, from retail to digital services, we are integrating next-generation technologies across every business vertical. Over 1,000 of our in-house scientists are leading cutting-edge research in areas like AI, renewable energy, advanced materials, and digital platforms, while our manufacturing infrastructure is being future-proofed to support the national aspiration of becoming a global manufacturing powerhouse,' Ambani said. Ambani said even amidst extreme external volatility, Reliance delivered a year of solid and balanced growth in FY25: revenue rose 7.1% to a record Rs 10.71 trillion, from which it earned an operating profit of Rs 1.83 trillion which grew 2.9% on-year and a net income of Rs 81,309 crore, which was 2.9% more than it had earned in the previous fiscal.
Business Times
03-08-2025
- Business
- Business Times
Opec+ makes another large oil output hike in market share push
[LONDON] Opec+ agreed on Sunday (Aug 3) to raise oil production by 547,000 barrels per day for September, the latest in a series of accelerated output hikes to regain market share, as concerns mount over potential supply disruptions linked to Russia. The move marks a full and early reversal of Opec+'s largest tranche of output cuts plus a separate increase in output for the United Arab Emirates amounting to about 2.5 million bpd, or about 2.4 per cent of world demand. Eight Opec+ members held a brief virtual meeting, amid increasing US pressure on India to halt Russian oil purchases – part of Washington's efforts to bring Moscow to the negotiating table for a peace deal with Ukraine. President Donald Trump said he wants this by Aug 8. In a statement after the meeting, Opec+ cited a healthy economy and low stocks as reasons behind its decision. Oil prices have remained elevated even as Opec+ has raised output, with Brent crude closing near US$70 a barrel on Friday, up from a 2025 low of near US$58 in April, supported partly by rising seasonal demand. 'Given fairly strong oil prices at around US$70, it does give Opec+ some confidence about market fundamentals,' said Amrita Sen, co-founder of Energy Aspects, adding that the market structure was also indicating tight stocks. The eight countries are scheduled to meet again on Sep 7, when they may consider reinstating another layer of output cuts totalling around 1.65 million bpd, two Opec+ sources said following Sunday's meeting. Those cuts are currently in place until the end of next year. Opec+ in full includes 10 non-Opec oil producing countries, most notably Russia and Kazakhstan. The group, which pumps about half of the world's oil, had been curtailing production for several years to support oil prices. It reversed course this year in a bid to regain market share, spurred in part by calls from Trump for Opec to ramp up production. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up The eight began raising output in April with a modest hike of 138,000 bpd, followed by larger-than-planned hikes of 411,000 bpd in May, June and July, 548,000 bpd in August and now 547,000 bpd for September. 'So far the market has been able to absorb very well those additional barrels also due to stockpiliing activity in China,' said Giovanni Staunovo of UBS. 'All eyes will now shift on the Trump decision on Russia this Friday.' As well as the voluntary cut of about 1.65 million bpd from the eight members, Opec+ still has a 2-million-bpd cut across all members, which also expires at the end of 2026. 'Opec+ has passed the first test,' said Jorge Leon of Rystad Energy and a former Opec official, as it has fully reversed its largest cut without crashing prices. 'But the next task will be even harder: deciding if and when to unwind the remaining 1.66 million barrels, all while navigating geopolitical tension and preserving cohesion.' REUTERS
Business Times
20-07-2025
- Business
- Business Times
Critical minerals are the new battlefront of energy security, says IEA chief
[PARIS] Energy security remains a pressing issue, but the battleground is shifting from oil and gas towards critical minerals, said Fatih Birol, executive director of the International Energy Agency (IEA). Speaking at the Amundi's World Investment Forum in Paris, he noted that oil is tilting towards a situation of oversupply, which has reined in its price even amid war. Weaker oil demand is also due to surging demand for electrification, particularly for data centres – and clean energy sources at that. 'Global electricity demand is growing much faster than in previous decades. A year ago, I said we're entering the age of electricity. Oil demand is slowing considerably.' Three sources are driving electricity demand – increased usage of air-conditioning; electric cars; and the boom in artificial intelligence (AI). In race for AI dominance, access to secure sources of power supply will be key, said Birol. 'There is no AI without electricity. One medium-sized data centre consumes as much electricity as 100,000 households. Technology companies want 24/7 electricity – which we cannot afford. And they want electricity to be as clean as possible.' The price of Brent crude oil spiked in mid-June to US$81 after the US strike on Iran's nuclear facilities. But it has quickly fallen since then, and now hovers at around US$69. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up 'We have a lot of oil in the market, with production coming from US, Canada and Brazil… This is the new reality – a lot of oil supply and more to come, while demand is getting weaker.' The IEA's July oil market report forecast world oil demand growth to rise by 700,000 barrels per day (bpd), its lowest rate since 2009 except for 2020 – during Covid. In contrast, world oil supply is forecast to rise by an average 2.1 million bpd this year to 105.1 million bpd, with non-Opec+ producers dominating growth. Still, the report also pointed out that price indicators belie a 'tighter physical oil market than suggested by the hefty surplus in our balances'. This is due to demand from summer travel and power generation, and the accelerated supply hike from the Organization of the Petroleum Exporting Countries and its allies (Opec+) 'had not had much effect'. Critical minerals the new frontline Birol expects critical minerals to be the new frontline of energy security issues, thanks to the over-concentration of almost all refining supply in less than a handful of countries – the Democratic Republic of Congo for cobalt, Indonesia for nickel and China for graphite and rare earths. According to an IEA critical minerals report, the average market share of the top three mining countries for key energy materials has risen from 73 per cent in 2020 to 77 per cent in 2024. IEA's analysis of 20 energy-related and multi-sectoral minerals used in sectors such as technology and aerospace points to China as the dominant supplier of 19 of the 20 minerals, giving it an average market share of 70 per cent. Birol said in the conference: 'In my view, we cannot solve this problem with market instruments alone. There should be government involvement in terms of using different instruments such as (forms of) guarantees… The over-reliance by the entire world (on a few countries) for critical minerals is the most important energy security issue today.' IEA argues in its report that public financing can help to support new refining projects, but rule-based market mechanisms are also required to support their operation. 'Well-designed price stabilisation schemes, such as contract-for-differences and cap-and-floor models, can help smooth out price volatility and mobilise private investment without imposing excessive fiscal burdens,' it said. For now, markets appear 'well supplied' for critical minerals, but risks are rising due to export restrictions. A sustained supply shock for battery metals could increase global average battery pack prices by as much as 40 to 50 per cent, IEA said. Meanwhile, Birol said, investment in clean energy has more than doubled in the last 10 years, but fossil fuel investment has remained the same. Capital flows into energy is estimated to rise to US$3.3 trillion this year, of which US$2.2 trillion is going into renewables, nuclear, grids, storage, low-emissions fuels, efficiency and electrification; and US$1.1 trillion into oil, natural gas and coal. The outsized share of clean energy investment 'is a benefit of the Paris Agreement', he said. 'But of the US$2 trillion (into clean energy), 85 per cent is happening in the Western countries and China. Only 15 per cent is flowing into the emerging and developing countries which account for two-thirds of global population,' he added. IEA's recently released report Energy and AI projects electricity demand from data centres worldwide to more than double by 2030 to around 945 terawatt-hours (TWh), slightly more than the entire electricity consumption of Japan today. AI is forecast to be the most significant driver of the increase; electricity demand from AI-optimised data centres is expected to more than quadruple by 2030. AI, however, is a double-edged sword. It can help raise the efficiency of electrical grids, increase cost competitiveness and reduce emissions. But it may also raise vulnerabilities to risks such as cyberattacks. 'AI is one of the biggest stories in the energy world today – but until now, policymakers and markets lacked the tools to fully understand the wide-ranging impacts,' Birol said in a statement.
Yahoo
11-07-2025
- Automotive
- Yahoo
China's electric car revolution hammers demand for oil
Demand for oil faces a dramatic slowdown as China's electric car revolution pushes combustion-engine vehicles off the road, the International Energy Agency (IEA) has said. World oil demand will climb by just 700,000 barrels a day in 2025, for a total of just under 103m barrels a day. But even as demand slows, the big producers are hell-bent on ramping up supply. The Organisation of the Petroleum Exporting Countries (Opec), a cartel of oil-producing nations, is on course to pump out an extra 2.1m barrels a day this year, the IEA said, taking their total daily output to 105m. Kieran Tompkins, at Capital Economics, said: 'We are at a really interesting turning point in the market just now. 'Peak oil demand is on the horizon.' Opec has been voluntarily curtailing the oil supply for several years to try to prop up the price. But Saudi Arabia is now leading a push to loosen the spigot, hoping to regain market share lost to the US and other non-Opec producers. The Saudis bumped up their output by 700,000 barrels a day in June, the IEA said, reaching 9.8m barrels a day. The ostensible reason was to get ahead of any potential disruption from Israel's attack on Iran. Suhail al-Mazrouei, the United Arab Emirates' energy minister, said this week that the market was still 'thirsty' for Opec's oil – as shown by the fact that unsold stock had not built up last month as producers began selling more. Opec's own forecast is that demand will increase by 1.3m barrels a day this year. But analysts at Macquarie Group backed the IEA, saying growth will be barely half that. They said the slowing demand and increasing output would create 'cartoonishly large' surpluses this year. The Brent crude oil price climbed back above $69 a barrel on Friday, having shed 2pc the day before, as traders focused on near-term supply tightness over the likely oversupply later in the year. Opec's hopes of finding buyers for its higher output are running up against a steady decline in demand from China, the world's second-largest economy, where electric vehicles (EVs) are quickly pushing combustion-engine cars off the road. EVs accounted for half of Chinese car sales last year, and the IEA has forecast that this will rise to about 60pc this year. One in 10 cars on Chinese roads are now electric, and the 11m sold in China last year exceeded the entire global sales volume just two years earlier. The Chinese truck fleet is also expected to shift quickly from diesel to liquefied natural gas. Macquarie forecasted China's oil demand to increase by just 54,000 barrels a day this year – the slowest growth in almost a decade, except for a couple of outliers during the pandemic and in 2022. 'The oil market's structural headwinds from China have come to the fore a lot more quickly than many people have appreciated,' Mr Tompkins said. In the short term, however, the supply-demand mismatch could be alleviated by Beijing's move to build a stockpile of crude oil to improve its energy security. Chinese entities have snapped up 82m barrels in the past three months to build this inventory, equivalent to the demand of 900,000 barrels a day. 'Chinese companies are expected to continue driving the expansion of inventories, with the pace of stock building over coming months key to the market balance,' the IEA said. Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
The Star
08-07-2025
- Business
- The Star
Malaysia's crude oil supply likely to remain under pressure in 2H25
PETALING JAYA: Malaysia's oil production is expected to remain under pressure in the second half of 2025 (1H25), continuing the soft decline seen in the first quarter where crude oil and condensate production dropped 5.2% year-on-year to 45.5 million barrels. RHB Research said this decline is moderating compared to previous quarters, indicating some stabilisation due to improved field performance and operational efficiencies, especially in mature fields. Natural gas production may also contract slightly in the 2H25, primarily due to planned maintenance shutdowns of key facilities in Sarawak and West Malaysia, as well as moderating demand from major liquefied natural gas importers like Japan, China, and South Korea. RHB Research estimates that the global oil market will narrow its theoretical deficit from 1.5 million barrels per day in 2024 to 0.8 million barrels per day in 2025, mainly due to a moderation in demand growth and higher supply from both the Organisation of the Petroleum Exporting Countries (Opec) and non-Opec producers. It maintains its 2025 to 2026 Brent crude oil price estimates at US$70 to US$68 per barrel. Price of Brent crude oil spiked up to as high as US$78 following the escalation of the Israel-Iran conflict, but the gains were quickly reversed on the expected ceasefire. Its top stock pick for the sector includes Bumi Armada Bhd , MISC Bhd , and Yinson Holdings Bhd . It retains its 'buy' call for the stocks with target prices of 65 sen, RM9.70 and RM3.69 a share, respectively. While there could be some clarity on the overall landscape in Sarawak, it still expects a structural shift in spending pattern by Petroliam Nasional Bhd, which may not be well replaced by Petroleum Sarawak Bhd, at least in the short and medium term. Upstream activities are expected to pick up seasonally in the 2Q25 to 3Q25, post monsoon season. Floating production storage and offloading (FPSO) players are likely to have relatively lower earnings risks under fixed and firm long-term charter contracts. RHB Research believes clients would not cancel these FPSO contracts due to the fluctuation in oil prices, since these contracts are backed by compensation clauses.
