OilPrice.com - June 17

[dan_s]

The adoption of the EU oil sanctions appears to have led to Russia retaliating by holding back its natural gas exports. Russian gas flows to Europe have seen hefty drops over the course of this week, with Italy, Germany, and France all receiving less than half of their usual volumes. Russia’s Gazprom blames sanctions that hindered maintenance, whilst European countries see the unexpected declines as a sign that the Kremlin is trying to retaliate for all the past sanctions by limiting gas supply. So now, it is not just oil and oil products that trade way above historical averages, natural gas is way above the norm, too. Meanwhile, oil prices plunged on Friday morning as recession fears soared.

White House Considers Export Caps to Tame Fuel Prices. According to Bloomberg, the Biden Administration is looking into capping fuel exports out of the US, with gasoline outflows already rising to 750,000 b/d this year, a topic that is most probably going to be raised at Energy Secretary Granholm’s meeting with oil refiners next week. < I really hope they think this idea through. It could make supply chain problems worse.

Nord Stream 1 Goes Down with Throughput Issues. Russia’s gas giant Gazprom (MCX:GAZP) declared it had to cut throughput in the Nord Stream 1 pipeline to Europe, saying delays in Siemens equipment repairs force it to run at just 40% capacity, a claim disputed by the German government as spot prices soar.

OPEC+ Admits Huge Underproduction, Again. As reported by Reuters, OPEC+ produced 2.695 million b/d below its production target in May, bringing total levels of deal compliance to 256%, with several African producers stuck in force majeure events and Russia seeing sanctions-driven production declines.

US Pressures Iran By Sanctioning Chinese Firms. For the second time in less than a month, the US Treasury has imposed sanctions on Chinese and Emirati companies that helped export Iran’s petrochemicals, stepping up the pressure on Tehran but also squeezing buying possibilities for Asian buyers.

Freeport LNG Aims for Full Return by Year-End. The largest US LNG liquefaction facility, Freeport LNG, said that it would remain fully offline until September following a pipeline blaze last week, with only partial operation expected through year-end.