As the energy crisis escalates - a view from Hong Kong

The Oilholic has wound up what can only be described as a fruitful, productive, busy, analytical, critical, conversational, argumentative and very frantic week of energy market research out in Far East, rounded off in Hong Kong. 

With the Middle East crisis now past its second week and not (yet) showing signs of easing, near-term implications and geopolitical tussles are becoming fairly apparent.

One look at the newspaper headlines over the past week in this part of the world saw claims of air passenger surcharges hike by regional carriers creep up from 35% to 100%. That's unsurprising, given jet fuel has spiked 140% and rising since the crisis began. 

Overall, the near-term inflationary impact of the oil price spike (currently seesawing either side of $100 using Brent as a benchmark) would likely be bigger in Asia, outages of LPG will play a bigger role in the Indian subcontinent, while the absence of Qatari LNG - triggering a highest bidder takes all mentality in global LNG markets - would hit Europe the hardest. Of course, it is bad news all around in general. 

Most in Asia are preparing for near-term inflation based on the logic that the conflict would end in four to six weeks. That's a punt most traders appear to have taken based on The Oilholic's conversations in Singapore, Tokyo as well as here. But beyond that all bets would likely be off. 

Few other chains of thought also emerged over the course of the past week. First, people in this part of the world are surprised over the complete lack of leadership from Europe during such a profound crisis. Most here see the Europeans as sniping from the sidelines so far. 

Secondly, no one buys that China is only unhappy with the US and Israel for having started the crisis. Beijing is equally miffed with the Iranians. While public condemnation for Israel and US has been coming since the start of the war, on Wednesday, China also directly criticised Iran for disrupting global crude supplies via the Strait of Hormuz, something it had been doing via private diplomatic channels. Whether or not, Iran's oil is reaching China won't move Beijing. Iran only services a small portion of China's demand bulk of which is met by other Gulf producers whom Tehran is bombing. 

Thirdly, how does it all come to an end? The answer to that isn't terribly clear just yet, but US attacks on Iran's oil exporting hub Kharg Island as a warning, an offer of both insuring or escorting energy cargoes in the Strait of Hormuz and pushing allies to join in the effort to safeguard shipping shows the White House is pushing things towards the "business end" of the conflict. 

Of course, should all of this come to a conclusion or some ceasefire of sorts be achieved say within six weeks from the starting date of hostilities on February 28, it will take better parts of another four to six months for global energy flows to normalise. 

The Oilholic discussed these various permutations in interviews and market commentary with the BBC and TRT World while out in Hong Kong. Yours truly also spoke on an Energy Connects webinar with fellow panellists Joe McMonigle, President & CEO of Global Center for Energy Analysis and former Secretary General of International Energy Forum (IEF), Simon Flowers, Chairman and Chief Analyst, Wood Mackenzie, and Chiranjib Sengupta, Editor-in-Chief of Energy Connects. And then rounded-off the week by speaking in a podcast with Gulf Intelligence. . 

These are trying times indeed. The global economy is facing a geopolitical and military crisis that may upend the energy market over the near-term, cause medium-term ripple effects and perhaps bake a $5-10 barrel risk premium in oil prices for the remainder of the year, even after the current crisis ends. 

On that note, it's time to bid goodbye to Hong Kong and Asia Pacific for now. It was great to be back in the region. More musings to follow soon. Keep reading, keep it here, keep it 'crude'! 

To follow The Oilholic on Twitter click here.

To follow The Oilholic on Forbes click here.

To follow The Oilholic on Energy Connects click here.

To email: journalist_gsharma@yahoo.co.uk  

© Gaurav Sharma 2026. Photo I: A view of Hong Kong from Victoria Peak © Gaurav Sharma, March 2026. Photo II: Gaurav Sharma, energy market analyst, Oilholics Synonymous, speak on the BBC, March 11, 2026. © BBC, March 2026.

On OPEC's higher output, no peak demand & no access

OPEC's two-day biennial 9th International Seminar came to a conclusion on Thursday after its key voices roundly declared the world simply needed more oil, there was no prospect of peak demand any time soon and denied half the world's scribes an opportunity to forensically question that assertion. 

More on the latter point later, but as The Oilholic noted in an overnight Forbes missive, the Saudi energy minister and de facto OPEC leader Prince Abdulaziz bin Salman warned against hurting global economic growth and people's "affordability" in the name of energy transition, multiple attendees confirmed to the Oilholic. 

The minister also said Wednesday that as renewable energy sources continue to grow, hydrocarbons will remain “indispensable” in supporting the economic progress of developing countries, and ensuring mission critical hard-to-abate sectors like heavy industry, aviation and haulage keep going.

And on Thursday - the second and final day of the OPEC Seminar - OPEC published its World Oil Outlook report claiming that crude demand will average 105 million barrels per day (bpd) this year. The producers' group expects demand to grow to average 106.3 million bpd in 2026 and then rise to 111.6 million bpd in 2029, and as high as 123 million bpd by 2050. To be read as - there's not going to be a peak demand scenario any time soon.

Now speaking of being reliant on third parties and quotes of seminar attendees to bring you these snippets dear readers, you may be wondering what's afoot. Well, for the first time since September 2004, OPEC turned down the Oilholic's request to attend, write op-eds for Forbes and blogs from the seminar.

Yours truly wasn't alone. It also withheld access to a number of global newswires, WSJ and FT, among many others. And for good measure, the event management company was instructed to tell all "non-partner media" journalists that the venue was full to capacity in case they turned up at the registration desk unannounced. 

There's not much one can do about this, but it didn't stop The Oilholic from flagging the goings-on at the event, and meeting and greeting familiar friends and faces from our 'crude' world. 

Still not sure what triggered but if it has something to do with objective reporting and searching questions - that ain't getting compromised folks, not now, not ever!

Non-access also meant that market commentary had to be done offsite, including with Asharq Business with Bloomberg TV. Yours truly discussed Brent crude touching $70 per barrel intraday on Wednesday with Senior Business News Anchor Nour Amache, and why near-term market sentiment was being impacted by lower inventories and anticipated higher summer demand in the Northern Hemisphere.

Furthermore, OPEC may have raised its output, but the hikes have already largely been factored in by traders. So, the move is currently not serving as a drag on prices. However, it would be interesting to note what happens when summer demand tails off, and the fourth quarter approaches with more OPEC+ barrels and hedged US / non-OPEC crude on the market. 

That will likely create a surplus, especially for light sweet crude, thereby potentially driving prices lower. Who knows, it may even convince US President Donald Trump to perhaps top up his country's strategic reserves. It seems we're heading for an interesting second half of the year. 

Well that's all from Vienna folks. More market musings to follow soon. Keep reading, keep it here, keep it 'crude'! 

To follow The Oilholic on Twitter click here.

To follow The Oilholic on Forbes click here.

To follow The Oilholic on Energy Connects click here.

To email: journalist_gsharma@yahoo.co.uk  

© Gaurav Sharma, July 2025. Photo I: Gaurav Sharma, energy analyst outside OPEC International Seminar venue at Hofburg Palace in Vienna, Austria on July 9, 2025 © Gaurav Sharma, July 2025. Photo II: Gaurav Sharma offers oil market commentary on Asharq Business with Bloomberg TV, July 9, 2025. © Asharq Business with Bloomberg TV, July 9, 2025.

Do sub $60 oil prices beckon in H2 2025?

The second half of the current crude oil trading year was ushered in by a larger-than-expected output hike by OPEC+ over the weekend, just ahead of the first week's trades in Asia. The market was largely pricing in a 411,000 bpd hike like the previous month, but got a whopping 548,000 bpd uptick instead. 

The latest addition effectively unwinds nearly 90% of the "voluntary" OPEC+ cuts in place since 2022. Here is the Oilholic's take on it via a column for Forbes. Unmistakably, this is a very bearish development. But it is also a statement of intent that OPEC is more than willing to take the fight to non-OPEC producers in a bid for a higher market share. 

Of course, non-OPEC production - especially that of the US - continues to go from strength-to-strength, at least for now, until production hedges unwind in the next 12 to 18 months. Until then it might well be a buyers' market with likely lower, even sub $60 per barrel Brent prices in a glut-ridden market. 

And speaking of the US, here is yours truly's latest Energy Connects column on how that record high US production has effectively reset the global energy market's risk premiums, as recent events in the Middle East have demonstrated.   

The said events, i.e. the Israel-Iran conflict and the bombing of Iran's nuclear facilities by the US, were the subject of The Oilholic's most recent appearance on TRT World's Round Table programme. Escalating tensions brought home long-held market anxieties - about energy cargoes in the Strait being disrupted as well as higher risk premiums - to the fore once again. 

Together with fellow guests on the programme, yours truly discussed why the closure of the Strait would be an act of self-harm for Iran, why Tehran simply won't (and didn't) do it, and ultimately why oil prices failed to hold on to the gains following a cessation of hostilities, courtesy of a well-supplied market and lacklustre demand growth. 

Here's an upload of the broadcast via TRT World's YouTube stream. Have a listen in if interested. Well that's all for the moment folks! More musings to follow soon. Keep reading, keep it here, keep it 'crude'! 

To follow The Oilholic on Twitter click here.

To follow The Oilholic on Forbes click here.

To follow The Oilholic on Energy Connects click here.

To email: journalist_gsharma@yahoo.co.uk  

© Gaurav Sharma 2025. Photo: Gaurav Sharma on TRTWorld's Round Table programme in June 2025 © TRT World, 2025.

A crude view from Abu Dhabi as oil price spike cools

As the Oilholic hopped across from Doha to Abu Dhabi on Monday it became evident that a further (read dramatic) spike in oil prices was not going to materialize.

It was helped in no small part by a report in the Wall Street Journal claiming that the Iranians - battered by precision Israeli bombing that began on Friday - were keen to get back to the negotiating table to end hostilities and resume discussions over their nuclear program. 

It meant the Brent futures rally slowed quite significantly with the global proxy benchmark sliding below $75 per barrel instead of heading toward $80-levels. The report was met with some scepticism but it needn't have been. 

In fact, informed sources both in Qatar as well as the UAE tell yours truly that Tehran is asking its Arab intermediaries to broker a cooling down of the daily barrage of attacks with much more fervor than the story suggests, provided the US doesn't join Israel in its campaign against Iran.  

Traders took the cue from that, much to the consternation of market bulls. That's because were market sentiment to switch from "Israel is now attacking Iran's oil facilities" back to the negotiating table, normal market fundamentals would start applying, and that would mean even $70 levels would not be worth holding on to. 

More musings to follow soon folks. Keep reading, keep it here, keep it 'crude'! 

To follow The Oilholic on Twitter click here.

To follow The Oilholic on Forbes click here.

To follow The Oilholic on Energy Connects click here.

To email: journalist_gsharma@yahoo.co.uk  

© Gaurav Sharma 2025. Photo: A view of Abu Dhabi from Qatar Airways QR 1044 © Gaurav Sharma, June 2025. 

What oil price would Trump want for US consumers?

US President Donald Trump makes no secret of his pro oil and gas credentials. It is also widely understood that the President seeks lower crude prices for the American consumer. 

Ideally, US shale producers would prefer oil prices north of $75 per barrel. That isn't exactly low enough for the President. 

Thanks to an uncertain macroeconomic climate, the kerfuffle caused by his trade tariffs and OPEC+ opting to bring more barrels on to an already well supplied market - prices have recently slumped down to $60-65 per barrel. But is that range now low enough for the President? Perhaps not, say many, including global investment bank Goldman Sachs. 

Apparently, after a forensic analysis of the President's social media posts, analysts at the bank have concluded that his preference would be for a $40-50 per barrel West Texas Intermediate range. The US benchmark is trading at ~$3 per barrel discount to the global proxy benchmark Brent at the time of writing.

Quoting parts of a Goldman Sachs report to clients, Bloomberg recently noted it as having observed that Trump's "inferred preference for WTI appears to be around $40 to $50 a barrel, where his propensity to post about oil prices bottoms.” 

He also “tends to call for lower prices (or celebrate falling prices) when WTI is greater than $50,” Goldman analysts added. “In contrast, President Trump has called for higher prices when prices are very low (WTI less than $30) often in the context of supporting US production.”

However, for US shale drillers this blogger has spoken to, that range is a tad too low. Many are presently hedged 12-18 months out on $70-plus prices. When the hedges come off, a low price environment will bite. 

But the President has also been very vocal about US energy dominance - or as Goldman analysts note - tweeting nearly "900 times" about it. Clearly he wants US oil inc. to succeed too. So, where would the happy middle ground be between both sentiment tugs? 

Market forces might well decide that, skewing it to one side or the other. The only confirmed thing is the overwhelmingly bearish climate this may all play out in 2025. That's all for the moment folks. Keep reading, keep it here, keep it 'crude'! 

To follow The Oilholic on Twitter click here.

To follow The Oilholic on Forbes click here.

To follow The Oilholic on Motley Fool click here.

To email: journalist_gsharma@yahoo.co.uk  

© Gaurav Sharma 2025. Photo: US flag. © DWilliam / Pixabay, 2015. 

Driving home for Christmas... (petrol prices edition)

Season's greetings dear readers. Many of you may be driving home for Christmas and looking forward to the New Year, with perhaps that most famous of Chris Rea songs playing on the radio. 

As you fuel up for the journey ahead, it is now pretty certain the current year and its festive season will end with petrol prices (or gasoline if you wish) at their lowest since 2021. 

That's because crude oil prices are at their lowest for nearly three years too, owing to lower demand (mainly from China), higher supply (largely from the US) and a stronger dollar (courtesy of the US Federal Reserve). 

Here are your truly's observations on the current market permutations via Forbes, and why lower prices may last well in to 2025. 

From a UK perspective, at the time of writing this blog, a litre of petrol would set you back on average by 135p (US$1.70), and sub 130p if you happen to a Costco member. In fact, lower prices at the pump are being replicated across Europe.  

And average US prices are pretty low this festive season as well, with a gallon of petrol going for $3.145 this week, counting in regional fluctuations around the mark. That's $0.83 per litre or 66p - a price, as always, many in Europe can only dream of!

On that note, it's time to take your leave for the festive week. The Oilholic will be back in Jan. And wherever you are driving or travelling to (or not driving or travelling at all), be safe and merry. Here's wishing you all a great Christmas & a Happy New Year! The Oilholic will be back in Jan, after the holidays. 

Keep reading, keep it here, keep it 'crude'! 

To follow The Oilholic on Twitter click here.

To follow The Oilholic on Forbes click here.

To follow The Oilholic on Motley Fool click here.

To email: journalist_gsharma@yahoo.co.uk  

© Gaurav Sharma 2024. Photo: Driving in Gloucestershire, UK on December 23, 2024 © Gaurav Sharma 2024. 

OPEC and the oil price floor

The last few weeks have brought range-bound volatility to the oil market with Brent futures oscillating between $70 and $75 per barrel. 

For the Oilholic, the now not-so-new Brent price floor is at $70 that OPEC appears to be protecting, although the producers' group rarely publicly comments on oil prices. 

In the face of subdued global, especially Chinese, demand growth, working to protect a price level rather than market share isn't quite working either. 

Brent has seen a steady decline over the last six months to the end of the year from $85 down to $75 to ultimately encountering resistance at $70. 

The market share versus price quandary is continuing for OPEC+ with no end in sight and perhaps no unanimity within its ranks on how to deal with it. 

All the while rising numbers of non-OPEC, especially US, barrels continue to hit the market. Overall, the situation is that at present, and going well in to H1 2025, there is very little appetite for additional barrels from any source, let alone OPEC+ barrels. 

Chances are OPEC+ will keep its cuts in place for another few months whenever a formal meeting takes place to decide on near-term production levels in December. But while it can potentially avoid actions to oversupply the market, will non-OPEC producers do so? Most likely, no. So, lower for longer does appear to be the order of the day. 

And were OPEC+ and the Saudis to discard their output curbs and trigger a market tussle, a decline to $50 Brent prices cannot be ruled out. 

Brent's price floor might currently be at $70, but it could potentially be... well floored further depending on what happens. 

Moving on from oil market chatter, yours truly recently discussed COP29 shenanigans on TRT World (clip here), wrote concluding thoughts on the climate change conference for Forbes (article here), and offered one's take on London's AIM-listed energy minnow Afentra (LON: AET) for Motley Fool (article here). That's all for the moment folks. Keep reading, keep it here, keep it 'crude'! 

To follow The Oilholic on Twitter click here.

To follow The Oilholic on Forbes click here.

To follow The Oilholic on Motley Fool click here.

To email: journalist_gsharma@yahoo.co.uk  

© Gaurav Sharma 2024. Photo I: Oil pump jack building block model at the AVEVA World 2023 Conference, Moscone Center, San Francisco, US. © Gaurav Sharma, October 2023. Photo II: Gaurav Sharma on TRTWorld, November 2024 © TRT World, November 2024. 

Risk weighting oil in the current climate

The last few weeks have been relentless in terms of geopolitical developments and their impact on the oil market - albeit a somewhat oversupplied one with plenty of barrels to more than meet global demand. 

From the lows of September last seen in December 2021, the Brent front-month contract has ended the current trading week posting its highest weekly rise in almost two years. The reason is a bit more complicated than yet another escalation of tensions in the Middle East.

On Tuesday, Iran hit Israel with a barrage of ballistic missiles in response to its "aggressive acts," including the killing of Hezbollah leader Hassan Nasrallah in Lebanon.

With speculation rife about Israel's impending response to Iran, Brent futures stemmed their decline towards $70 per barrels and started inching up towards $80. The inching quickly turned climbing on Thursday after US President Joe Biden decided to make an "off the cuff" remark about discussing with Israel if it could go after Iran's oil facilities. 

Four key ones spring to the Oilholic's mind as yours truly noted in an article for Forbes. These sites may well have a target on their back but any potential Israeli action does not need to be spelt out by a sitting US President 4 weeks from a presidential election. 

Cue a 5.5% spike in Brent futures on Thursday, followed by another 2% today, bringing prices closer to $80. That prices are still below the $85 level seen at the start of the third quarter last year, as well as earlier this year, is down to the fact there is plenty of crude in the market at a time of uncertain demand. 

So the question is where do we go from here? In that respect, things are pretty much as they were at the start of the week when the Oilholic was interviewed by Reuters, i.e., risk weighting for front-month oil futures is currently contingent upon what Israel might do next and if there is a direct confrontation with Iran.

It is now (almost) guaranteed that such a confrontation is now not a question if but when, as yours truly said on subsequent back-to-back BBC News interviews following Iran's attack on Israel on Tuesday and Biden's astounding intervention on Thursday. 

Now, if its a case of simple mathematics, Iran's 1.7 million barrels per day (bpd) in oil exports, mainly to China, can be taken care off by the rest of the market should they be knocked offline by Israel. Because as things stand, the crude market will likely end this year and start the next with a surplus.

However, should the conflict broaden to engulf the Gulf and hit exports from Saudi Arabia, UAE, Bahrain and Qatar, as well as hold-ups in the Strait of Hormuz, we would almost certainly be looking at an upward lurch to $100 Brent prices. Where this goes is anybody's guess and all eyes are now on Israel. Well that's all for now folks! Keep reading, keep it here, keep it 'crude'! 

To follow The Oilholic on Twitter click here.

To follow The Oilholic on Forbes click here.

To follow The Oilholic on Motley Fool click here.

To email: journalist_gsharma@yahoo.co.uk  

© Gaurav Sharma 2024. Photo I: Oil pump jack building block model at the AVEVA World 2023 Conference, Moscone Center, San Francisco, US. © Gaurav Sharma. Photo II: Gaurav Sharma on BBC News on October 3, 2024 © BBC. 

$80 is looking like Brent's price ceiling not the floor

The second day of the fresh trading week has heaped yet more misery on the oil market. Its the same story as the last week - of declines along familiar lines (global demand, lower Chinese imports, economic uncertainties, oversupply of light crude in particular - the whole works). 

Compared to last week, on Monday the Brent front-month contract ended 8.11% lower while the WTI ended 7.01% lower. 

Having breached $75 per barrel floor, Brent futures are now testing $70 with the WTI having fallen through it some time ago. This is for all intents and purposes a rout based on weaker demand and more than adequate supply. It means that as things stand - at least from the Oilholic's perspective - a $80 oil price is now the ceiling, and not the floor!

The current market sentiment has sent Wall Street banks scrambling to lower their oil price forecasts and market observers to tone down their demand growth forecasts for both this year and the next. This blogger has long been suggesting that 2024 will end in an oversupply of light sweet crude. But as it appears, the whole market might well be in surplus regardless. 

Away from pricing, here's yours truly latest missive for Energy Connects on M&A activity in the sector which appears to be pretty buoyant. Looks like the low price climate has seemingly narrowed the buyer-seller disconnect.

More musings to follow soon. Keep reading, keep it here, keep it 'crude'! 

To follow The Oilholic on Twitter click here.

To follow The Oilholic on Forbes click here.

To follow The Oilholic on Motley Fool click here.

To email: journalist_gsharma@yahoo.co.uk  

© Gaurav Sharma 2024. Photo: Oil production site. © Jplenio / Pixabay, 2018. 

Third successive weekly loss for crude oil futures

As another trading week came to a close on Friday, oil futures posted their third successive weekly loss. That's the first such occurrence since early June and the Brent front-month contract is now down below $80 per barrel, having spent much of the month of July in the red. It seems no matter what the market is presented with inventory-wise, concerns over demand - especially China's demand - continue to weigh on trading sentiment.

The long ongoing divergence in global demand growth forecasts between the IEA and OPEC adds to the element of uncertainty, with the former keeping its projections for 2024 below 1 million barrels per day (bpd) and the latter maintaining them above 2 million bpd. 

And some in the market are factoring in an unwinding of OPEC cuts later this year, even though the Saudi oil minister has been on record saying the producers' group will react otherwise should conditions merit it. It looks like they do! 

Furthermore, for major buyers such as China and India the availability of discounted crude, however nominal that discount maybe, remains as yours truly noted in an interview with Asharq Bloomberg on July 17.

Overall, in a market that's seeking direction and looking at summer demand in the Northern Hemisphere, things have turned south given the absence of clear signals. As things stand, the first month of a pivotal third quarter of oil trading - ahead of a peaking of refinery demand in August - has turned out to be a damp squib for crude market bulls.

But it is (so far) looking like OPEC is not going to do much at its next meeting, Brent remains in backwardation and many are joining the IEA in predicting an oil market surplus toward the end of the year and early next year. Last week, investment bank Morgan Stanley became the latest to do so (For The Oilholic's Forbes post on the subject, click here). Oil is a story of demand too, so supply-side measures can only do so much in terms of impact in prices. 

Generally speaking, most contacts in the market envisage lower crude prices in Q1 2025, and much of the year-end surplus to be in light sweet crude, boosted undoubtedly by relatively higher US production. So the pipe dream of $90 Brent oil prices this year, remains just that - a pipe dream. That's all for the moment folks. More musings to follow soon. Keep reading, keep it here, keep it 'crude'! 

To follow The Oilholic on Twitter click here.

To follow The Oilholic on Forbes click here.

To follow The Oilholic on Motley Fool click here.

To email: journalist_gsharma@yahoo.co.uk  

© Gaurav Sharma 2024. Photo: Gaurav Sharma on Asharq Bloomberg TV © Asharq Bloomberg TV, July 17, 2024. 

Oil heading to $90, renewables in Japan & more

It's been a hectic few weeks in the energy markets over the course of which oil prices have acquired a bit of buoyancy. Its something they briefly lost last month following the OPEC+ meeting. Brent crude futures currently sit just a few dollars south of $90 per barrel level, having dropped below $80 in early June. 

While global crude demand permutations haven't materially altered, there is renewed optimism over lower interest rates in key markets. That and higher demand projections in Asian markets, especially India, appear to be supporting prices. This sets the stall for relatively higher crude prices as we enter the first month of the second half of the year. 

All things staying even, the Oilholic would argue there is now a near-term case for $90 Brent crude prices. However, defending price upticks beyond the level would prove tricky, given the fact that crude supplies, especially those of light sweet non-OPEC crude, remain on a solid footing.  

Away from the oil market, yours truly was interviewed by the BBC on Japan's and wider East Asia's renewable energy landscape. The Oilholic spoke about a call by the country's private sector to triple its renewables capacity by 2035. 

This kerfuffle over Japan's future energy mix has been going on since the Fukushima tragedy in 2011, and has been further complicated by readily available and competitively priced LNG. 

Japan continues to trail the G7 in terms of renewables. However, while still using coal as a power generation source, Japan is not expanding usage in the same way as India and China are. Overall, a renewables capacity target in excess of 360GW by 2035 looks very ambitious. However, never discount Japanese ingenuity for getting things done! 

Elsewhere, here is one of the Oilholic's missives from late June on why the world needs to nurture sustainable entrepreneurship for Forbes (click here), and another one on why green hydrogen's fate in a net zero economy hinges on upscaling for Energy Connects (click here).

Finally, on the eve of the UK's general election, here are this blogger's thoughts on how the outcome will impact the country's energy industry. Regardless of whoever wins, looks like UK Energy Inc may be stuck between a rock and hard place! That's all for the moment folks. More musings to follow soon. Keep reading, keep it here, keep it 'crude'! 

To follow The Oilholic on Twitter click here.

To follow The Oilholic on Forbes click here.

To follow The Oilholic on Motley Fool click here.

To email: journalist_gsharma@yahoo.co.uk  

© Gaurav Sharma 2024. Photo: Gaurav Sharma on BBC World © BBC, June 25, 2024. 

The mad first month of crude trading year 2024

As the first month of the current oil trading year nears its end, the Oilholic's thoughts on the direction of crude prices hasn't materially altered. We're likely to see prices oscillate in the range of $70 and $85 per barrel in 2024, using Brent as a benchmark. And that's because the bearish bias in wider market fundamentals remains the same in a different trading year, despite all the geopolitical flare-ups we've seen October. We'll touch on those later in this blog. However, admittedly it has been the maddest possible start to trading. 

Feeling the pulse of the market and tepid demand, the Saudis made two profound short- and medium-term decisions. The first came early in the month after Aramco - the Saudi state-owned behemoth - announced a cut to official selling prices (OSPs) for all regions, including lucrative Asian markets, for several crude grades. These included Aramco's flagship Arab Light crude oil. Aramco said cuts in Asia would be as high as $2 per barrel versus the Dubai Oman regional crude benchmark from January levels. 

Prices for Europe would be down by $1.50-$2 per barrel versus Brent January prices, while North American exports would see a drop of $2 per barrel versus the Argus Sour Crude Index (ASCI) used to benchmark U.S. Gulf Coast sour grades. The move weighed on oil prices and seemed like a logical one. 

The Saudis, having voluntarily cut their headline production down to 9 million barrels per day (bpd), want to make sure every single drop of it gets sold in a competitive market receiving plenty of barrels, especially of US light crude. 

The second move came late-January, after Aramco said it was stopping its expansion plans and concentrating on a maximum sustained capacity of 12 million bpd. This immediately generated headlines along the lines of the Saudis acknowledging the end of oil, which, as the Oilholic said via market commentary on several broadcasters, is a load of rubbish. 

Aramco plans to finish the oilfields it has started - namely Berri (250,000 bpd), Dammam (75,000 bpd), Marjan (300,000 bpd) and Zuluf (600,000 bpd). There's only one project cancellation and the company intends to let some other existing fields decline. So with respect, it is nothing more than a pragmatic business move faced with changing medium- to long-term demand in a market the Saudis hope to tap with aplomb for as long as they can.

Away from Saudi moves there were geopolitical flash points aplenty. But none of these managed to move the oil price quite like they used to back when US crude barrels weren't keeping the global markets honest. Following weeks of attacks by Yemen's Iran-backed Houthi rebels on energy and commercial shipping in the Red Sea, the US and UK pounded Houthi positions and infrastructure. The Houthis vowed a response and their sporadic attacks on shipping continued. 

Then on January 28, after over 170 drone and missile attacks on US bases in Syria, Jordan and Iraq since October by Iran-backed proxies in the Middle East, one got through and killed three service personnel. The US' imminent response is to be expected and could mark a dangerous escalation. Where this goes is anybody's guess. But an attack by the US on Iranian soil appears unlikely. (Should it happen, and its hasn't since the 1980s, we could see crude prices around the $90s).

As things stand, crude prices remain range bound. January offered precious little to alter this despite it being one of the most volatile starts to a trading year. Well that's all for now folks. More market thoughts to follow. Keep reading, keep it here, keep it 'crude'! 

To follow The Oilholic on Twitter click here.

To follow The Oilholic on Forbes click here.

To follow The Oilholic on Motley Fool click here.

To follow The Oilholic on Rigzone click here.

To email: journalist_gsharma@yahoo.co.uk  

© Gaurav Sharma 2024. Photo: Gaurav Sharma on Asharq Business with Bloomberg TV in January 2024 © Asharq Business with Bloomberg TV.

Can oil really hit $150? (And more!)

As the current crude oil trading year enters its final two months marked by festive breaks and potentially higher consumer demand as the Northern Hemisphere's winter approaches - thoughts inevitably turn to what price levels we will likely encounter in 2024.

With hostilities in the Middle East failing to lift crude prices despite all the talk of risk premiums and potential supply disruptions, being bullish about oil early in 2024 is proving hard. That's because concerns over crude demand are outweighing concerns over supply. 

We're talking muted demand from the economic powerhouses of Germany and China, lower consumer confidence levels in key OECD markets and elevated interest rate levels kept there by major global central banks, especially the US Federal Reserve. 

It therefore came as a surprise to The Oilholic when the World Bank opined that crude prices could hit $150 if hostilities in the Middle East escalate! Here are this blogger's thoughts on that via Forbes. Simply put - don't hold your breath! 

And let's not forget, Brent hasn't even capped a more realistic $100 per barrel level the bulls crave. The benchmark's January 2024 contract is barely higher than current levels, and contracts further out into the summer of next year are even lower. That implies Brent remains in backwardation mode.

Away from the crude price, the latest quarterly earnings posted by energy majors provided plenty of talking points. More so, after the return of megadeals as ExxonMobil swooped for Pioneer Natural Resources and Chevron swooped for Hess Corp. 

Other deals may follow as the energy majors fish for viable plays. It's led many, including this blogger, to wonder if a supermajor itself could be vulnerable? The prime candidate for finding itself in this position is BP; a chronically undervalued supermajor in the Oilholic's opinion. More on the subject here via Forbes. 

Is it possible? Yes, especially in a industry built on big ticket deals. Will it happen? Probably no, not least down to BP's $100 billion plus valuation (however discounted that may appear to some). But as yours truly noted on Forbes - that the company has had to bat away questions about being a takeover target is pretty extraordinary and indicative of how far it has fallen. Well that's all for now folks. Keep reading, keep it here, keep it 'crude'!

To follow The Oilholic on Twitter click here.

To follow The Oilholic on Forbes click here.

To follow The Oilholic on Motley Fool click here.

To follow The Oilholic on Rigzone click here.

To email: journalist_gsharma@yahoo.co.uk  

© Gaurav Sharma 2023. Photo: Oil pump jack model at the AVEVA World 2023 Conference, Moscone Center, San Francisco, US. © Gaurav Sharma October 2023. 

ADIPEC Day I: "Decarbonising. Faster. Together"

The Oilholic is delighted to be back at ADIPEC 2023 after a gap of four years, and one virtual ADIPEC (2020) during the Covid pandemic. The tagline this year is rather unique "Decarbonising. Faster. Together" - and one that yours truly, and one suspects 160,000-plus delegates who'd be visiting the event are unlikely to miss. 

It's on banners, flags, posters, flyers, magazines, websites and broadcasts - in short if you are in town, you are unlikely to miss it. 

But what does it all mean? For Sultan Ahmed Al Jaber - ADNOC's boss and the country's Minister of Energy and Advanced Technology, and one might add the President-designate of COP28 - it all about an energy transition that's "just, orderly, equitable and responsible." More on that here via this blogger's latest Forbes post. But kudos from a branding perspective as "Decarbonising. Faster. Together" is just as catchy in 2023, as "Oil and Gas 4.0" was back in 2019. 

Something's of course never change. China has yet again sent a humongous delegation to town with a number of exhibitors, major energy outfits, businesspersons, subject matter experts and dignitaries whose presence you simply cannot miss. 

There are also another 29 country pavilions to visit. Around 1,600 speakers are in town, present company included, and 10 parallel conference streams, two of which the Oilholic will have four sessions in (More details here). The "Make It In The Emirates" theme - encouraging the UAE's domestic industry and manufacturing - also looms large and proud around ADIPEC corridors. 

This blogger also hosted the first of his panel sessions at ADIPEC 2023, titled: "The twin transition: policy alignment between the green and digital agendas," i.e. the simultaneous shift towards a more sustainable and digital economy. 

This engaging discussion included panellists Andrei Covatariu, Co-Chair, Task Force on “Digitalization in Energy” and Vice-Chair of the Group of Experts on Energy Efficiency, United Nations Economic Commission for Europe; Allyson Anderson Book, Chief Sustainability Officer, Baker Hughes and Leonid Zhukov, VP of Data Science, BCG-X and Director of BCG Global AI Institute. 

That's all for the moment folks as we're just getting started in Abu Dhabi. More to follow soon! Keep reading, keep it 'crude'!

To follow The Oilholic on Twitter click here.

To follow The Oilholic on Forbes click here.

To follow The Oilholic on Rigzone click here.

To email: journalist_gsharma@yahoo.co.uk  

© Gaurav Sharma 2023. Photo: (1) Entrance to ADIPEC 2023, Abu Dhabi, UAE, (2) Pavilions of companies from China. © Gaurav Sharma 2023.

Oil in the $90s, Reimagining BP without Looney & more

What a difference a fortnight makes - for this blogger was musing end-August on how oil benchmarks were pretty much staying rangebound in the absence of drivers and looking for direction. That driver arrived in the shape of an extension of Saudi-Russian output cuts till the end of 2023 merely a few weeks later. 

Whatever their motivation might be, Riyadh and Moscow have decided that they will not let the market go into surplus mode as the Northern Hemisphere's winter approaches. End result - even the WTI front-month futures contract is finding support above $90 per barrel, and for its part Brent is flirting with $94/95 levels. 

Should we therefore conclude that a return of $100 oil prices is imminent for the first time since July 2022 despite a high interest rate climate, tepid economic activity in China and wider consumer anxiety? The short answer is - yes (barring an unforeseen macroeconomic upheaval), and particularly so, for global proxy benchmark Brent.

In fact, the question right now shouldn't be whether oil will get to $100 levels, but rather whether it would stay there? Of that, one is not too sure. Current price levels of futures contracts six month out point to a different story, and different a demand (and supply) dynamic for Q2 2024. Here are the Oilholic's thoughts on market direction via Forbes. 

Away from the direction of the oil price, the market for blue chip energy stocks got a shock after BP's social media loving CEO Bernard Looney suddenly resigned late on Sept 12 over his failure to fully disclose details of "past relationships" with colleagues! What might follow next for BP could be pivotal - will it continue down the path set by Looney or mark a return in focus to core oil and gas operations? (More here.)

Finally, this blogger also found the chance for two exclusive Forbes interviews earlier this month with Jim Johnson, CEO of engineering group Hunting Plc, and Christopher Hudson, President of dmg events. Click on the hyperlinks above should you wish to read these. But that’s all for now, for the moment folks! Keep reading, keep it crude!

To follow The Oilholic on Twitter click here.

To follow The Oilholic on Forbes click here.

To follow The Oilholic on Rigzone click here.

To email: journalist_gsharma@yahoo.co.uk  

© Gaurav Sharma 2023. Photo: Kristina Kasputienė from Pixabay2

View on a 'crude' few days from Houston

The Oilholic is glad to be back in Houston, Texas, US for yet another visit. However, in many ways the latest outing marks several first instances. It is this blogger's first instance of arriving in America's oil and gas capital right after an OPEC summit, the first immediately following a mammoth oil price crash, and the first when several events yours truly was planning on attending, including IHS CERAWeek have been cancelled due to the coronavirus outbreak that is wrecking the global economy. 

Yours truly promised some considered viewpoints 'to follow' while scrambling out of Vienna, to get here via London following the collapse of OPEC+, and here they are - thoughts on why $30 oil prices could be the short-term norm, and in fact $20 could follow via Forbes, thoughts on the shocking but inevitable collapse of OPEC+ via Rigzone, and why the recovery since Monday's (March 9) oil price slump is not a profound change to where the market stands, again via Forbes. 

Interspersed will penning thoughts for publications, the Oilholic met some familiar trading contacts in H-Town (you all know who you are), and met two new crude souls via mutual contacts too. Most seem surprised by the level of Aramco's discounts for April cargoes, and opined that they were three times over their expectations. 

The Saudis certainly mean business, and what was a crisis of demand following the coronavirus outbreak that has crippled China; has Iran, Italy and South Korea in its grip; and has seen emergency protocols being activated from California, US to Hokkaido, Japan now has a new dimension. It is now a crisis of demand coupled with a supply glut as OPEC and non-OPEC producers tough it out in a race to the bottom of the barrel. That's all from Houston, for the moment folks! More soon. For now, keep reading! Keep it 'crude'!

To follow The Oilholic on Twitter click here.

To follow The Oilholic on Forbes click here.

To email: gaurav.sharma@oilholicssynonymous.com

© Gaurav Sharma 2020. Photo: Downtown Houston, Texas, US © Gaurav Sharma, March 10, 2020.

Ten years of 'crude' blogging & a big thank you!

Its a day to say thanks and feel a tad nostalgic, as the Oilholic woke up this Christmas eve morning to the realization that today marks 10 years of this oil and gas market blog's appearance on cyberspace!

Boy does time fly! When yours took this blog live and put his first post up on December 24, 2009, Barack Obama had been in the White House for less than a year; Gordon Brown was still in Downing Street; the global economy was limping back from the financial crisis; the US shale revolution's impact hadn't been felt; OPEC had held its latest minister's meeting in Luanda, Angola instead of its secretariat in Vienna, Austria; and Brent and WTI futures closed at $76.31 and $78.05 per barrel respectively, with a premium in the latter's favour! That's a 10-year decline of $9.84 (-12.9%) for Brent and $17.5 (-22.42%) for WTI versus this European morning's prices in Asia.  

Back then, all this blog had was a handful of readers comprising of mutual acquaintances in the trading community who had been providing tips and invaluable feedback since 2007, when yours truly was working on concepts, and a trail site/domain. The subsequent blogging journey began on Christmas eve of 2009 when the Oilholic registered the www.oilholicssynonymous.com domain, and it has been quite a ride, and more, ever since. 

The blog underwent a complete template overhaul in 2011 as the readership started gaining traction. Well past its millionth pageview, it currently averages 12,000 reads a month. 

Well above average readership points are often brought about by posts on energy sector developments and events such as IPWeek, CERAWeek, OPEC and ADIPEC, where this blogger often takes speaking engagements at, resulting in monthly pageviews jumping above 100,000 reads a month. 

As in previous years, bulk of the readers who browse and read this blog in 2019 have come from the US, UK, Norway, Germany and China in that order, with American and British readers leading the pack by some distance. 

Many have logged in from some 127 countries week in, week out. So a massive thank you to all of you because without your readership, feedback and support this blog wouldn't be here. Alongside regular readers who find this blog via established routes, analytics also reveal the impact of Google, where many of you find your way to the Oilholic alongside LinkedIn, Twitter and Forbes.

What this blog has been about over the last 10 years is what it will be about in the future, carrying the Oilholic's analysis, thoughts, rants, musings and social media flags, about past events, developments and emerging scenarios in the sector, and the comments of fellow market experts one is able to interact with. 

It'll also continue to complement the Oilholic's analysis and media career, speaking circuit engagements, serve as a published clippings portfolio hub, broadcast commentary, work undertaken over the last 20 years (and counting), some favourite photographs and a selection of book reviews.

As the years go by, here's hoping this blog is (and will be) as much fun for those reading it as it is for the one writing it. So keep reading, keep it 'crude' and once again thank you for all your support.

To follow The Oilholic on Twitter click here.

To follow The Oilholic on Forbes click here.

To email: gaurav.sharma@oilholicssynonymous.com

© Gaurav Sharma 2019. Photo: Screenshot of Oilholics Synonymous Report's homepage in 2010 © Gaurav Sharma.

OPEC+ announces deeper cuts of 500kbpd

It's official - OPEC+ has decided to "deepen its cuts" by ~500,000 barrels per day (bpd), thereby upping its output reduction from 1.2 million bpd, 1.7 million bpd.

And if the new chief OPEC powerbroker Prince Abdulaziz bin Salman is to be believed, and every participant well...err....participates, the market could well be looking at a real terms cut of 2.1 million bpd. 

That is wishful thinking and will be severely tested as the Saudis say OPEC+ compliance would be keen monitored. To this effect, OPEC will have an extraordinary meeting of ministers in March 2020, on top of its regular meeting in June. 

For its part Saudi Arabia will up its cuts "voluntarily" to 400,000 bpd (+167,000 bpd) bringing its headline production down to 9.744 million bpd. Errant Iraq has promised to cut 50,000 bpd. Nigeria, Libya and Iraq remain exempt, but Nigerian Minister Timipre Marlin Sylva said his country would be cutting production "voluntarily."

There seems to be no shortage of volunteers. Here are two other key quotes:

• "Signal we want market to take is that we are collectively showing readiness to rebalance the market, prevent heavy inventory buildup in Q1 2020," - Abdulaziz bin Salman.
• "Russia wants to avoid any oil market turbulence in 2020. We are not concerned with US shale, seeing signs of shale slowdown," - Russian Oil Minister Alexander Novak. 

Finally, the Saudi Minister sounded pretty peeved about getting a "battering from the media" about the Saudi Aramco IPO, adding that the company's valuation would hit $2 trillion very soon. And that's that; more composed thoughts upon the Oilholic's return to London, but that's all for the moment from OPEC folks! Keep reading, keep it 'crude'!

To follow The Oilholic on Twitter click here.

To follow The Oilholic on Forbes click here.

To email: gaurav.sharma@oilholicssynonymous.com

© Gaurav Sharma 2019. Photo: Saudi Oil Minister Abdulaziz bin Salman speaks at the conclusion of the OPEC+ meeting in Vienna, Austria © Gaurav Sharma December 6, 2019.