- U.S. Oil Exports to India Soar Ahead of Sanctions on Iran
U.S. crude oil exports to India hit a record in June and so far this year are almost double last year’s total as the Asian nation’s refiners move to replace supplies from Iran and Venezuela in a win for the Trump administration.
U.S. President Donald Trump’s administration has been pressuring its allies to cut imports of Iranian goods to zero by November and India’s shift advances the U.S. administration efforts to use energy to further its political goals.
The United States has become a major crude exporter, sending 1.76 million barrels per day (bpd) abroad in April, according to the latest government figures.
All told, producers and traders in the United States will send more than 15 million barrels of U.S. crude to India this year through July, compared with 8 million barrels in all of 2017.
The exports to India could go higher if China imposes levies on its U.S. oil imports over the latest round of U.S. tariffs, which could damp Chinese purchases and lead U.S. crude prices lower.
A. K. Sharma, head of finance at Indian Oil Corp (IOC.NS), the country’s top refiner, said U.S. crude is gaining appeal because of its lower cost, and could expand further if China cuts its imports of U.S. energy.
“If China levies a tariff on U.S. oil then U.S. imports to India will probably rise,” he said. “We are looking for a mini-term deal to buy three to four cargoes of U.S. oil over a period of three to six months instead of buying single cargoes.”
OPPORTUNITY FOR U.S.
Last month, India’s oil ministry asked refiners to prepare to limit imports of Iranian oil ahead of U.S. sanctions that take effect in November.
The United States is reimposing sanctions after withdrawing from a 2015 agreement with Iran, Russia, China and several Western European countries where Iran agreed to curtail its nuclear activities in return for the lifting of earlier sanctions.
Venezuelan crude shipments to the Asian country also fell 21 percent in the first half of this year as production has been hampered by inadequate investment, mismanagement and U.S. sanctions.
Adding to its exports crisis, the U.S. has been increasing sanctions on various Venezuelan nationals and companies, part of a campaign to pressure socialist President Nicolas Maduro to make political and market reforms.
Iran and Venezuela are among India’s top five oil suppliers.
Last month, India’s imports of Iranian crude fell by 16 percent from May, paring sharp year-over-year increases during the first half of this year.
The Trump administration plans to send a delegation in the coming months to India to discuss Iran sanctions and oil issues.
“Our focus is to work with those countries importing Iranian crude to get as many of them as possible down to zero by Nov. 4,” a U.S. State Department official said.
The world’s fourth largest refiner by capacity is “cutting back on Iranian crude imports,” said Reid l’Anson, an analyst at cargo tracking firm Kpler. “That’s an opportunity for U.S. producers to sell into the Indian market. Indian demand is quite robust.”
Reuters’ vessel tracking data show three of the eight tankers charted by Swiss and Chinese traders and sent to India in recent weeks were destined for a port near Reliance Industries Ltd (RELI.NS)’s Jamnagar refinery, the world’s largest. Three others are headed for undisclosed ports on India’s west coast from the U.S. Gulf Coast.
Reliance did not respond to a request for comment.
Swiss trader Vitol SA and Chinese oil companies including PetroChina (601857.SS) last month lifted four vessels carrying 6.83 million barrels combined to western India, according to Thomson Reuters trade flow data.
June’s 228,000 bpd of U.S. exports to India are more than double the previous export record of 98,000 bpd last September, according to U.S. Energy Information Administration data.
The FPMC C Melody, a very large crude carrier (VLCC), is scheduled to arrive next month at Sikka, near Jamnagar. It is carrying 1.93 million barrels of U.S. crude, Reuters tracking data shows.
Another Vitol-chartered VLCC, the Maharah, sailed from Galveston last week and was headed to Sikka with 1.98 million barrels of oil.
Two more VLCCs – the Ghinah and the Eagle Victoria – were scheduled to leave the Texas coast for undisclosed ports in India this month, bringing planned U.S. oil exports to India to at least 191,000 bpd for the month.
Vitol and PetroChina declined to comment. A trader familiar with the Chinese company’s purchases confirmed PetroChina is supplying U.S. crude to India.
Some Indian refiners have finished testing runs of U.S. oil this year, often by mixing it with heavier grades those plants typically process, analysts and traders said.
“They really have started to make the shift,” said Olivier Jakob, managing director of energy consultancy PetroMatrix. “India is comfortable with a regular flow from the U.S. now.”
Reliance is blending lighter U.S. oil with heavier crudes from other nations, said a trader familiar with plant operations and trade flows. Indian refiners began testing U.S. crudes last year, and volumes have climbed as they became confident the blends would work.
SEC To Ban Unregistered CMOs From Operating By Month End
The Securities and Exchange Commission (SEC) says it will stop operations of Capital Market Operators (CMOs) that are yet to renew their registration on May 31, 2021.
This was contained in a circular signed by the management of SEC in Abuja on Monday.
On March 23, SEC had informed the general public and CMOs on the reintroduction of the periodic renewal of registration by operators.
The commission noted that the reintroduction of the registration renewal was due to the need to have a reliable data bank of all the CMOs registered and active in the country’s capital market.
“To provide updated information on operators in the Nigerian Capital Market for reference and other official purposes by local and foreign investors, other regulatory agencies and the general public, to increasingly reduce incidences of unethical practices by CMOs such as may affect investors’ confidence and impact negatively on the Nigerian Capital Market and to strengthen supervision and monitoring of CMOs by the Commission,” SEC explained.
According to the circular, the commission said CMOs yet to renew their registration at the expiration of late filing on May 31, would not be eligible to operate in the capital market.
It explained that CMOs were required to have completed the renewal process on or before April 30, however, the commission said late filing for renewal of registration would only be entertained from May 1 to May 31.
SEC also said that asides from barring the CMOs who failed to comply accordingly, their names would be published on its website and national dailies.
It added that names of eligible CMOs would be communicated to the relevant securities exchanges and trade associations.
A Threat to Revenue As Nigeria’s Largest Importer of Crude, India slash Imports By $39.5B
Nigeria’s revenue earning capacity has come under threat following the reduction of importation of crude oil by India.
India, Nigeria’s largest crude oil importer, reduced crude oil imports by $39.5bn in April, compared to the same time the previous year, data from India’s Petroleum Planning & Analysis Cell showed.
According to the Indian High Commission in Nigeria, India’s crude oil imports from Nigeria in 2020 amounted to $10.03bn.
This represented 17 percent of Nigeria’s total crude exports for the year according to the Nigerian National Petroleum Corporation, as quoted by OilPrice.com.
As Nigeria’s largest importer of crude oil, lockdowns in India’s major cities from the COVID-19 surge in April had ripple effects on Nigeria’s oil sales.
The NNPC was prompted to drop the official standard price of its main export streams, Bonny Light, Brass River, Erha, and Qua Iboe, by 61-62 cents per barrel below its April 2021 prices. They traded at $0.9, $0.8, $0.65, $0.97 per barrel respectively, below dated Brent, the international benchmark, as Oilprice.com showed.
India had been buying the not-too-light and not-too-heavy Nigerian crudes that suited its refiners.
Reuters reported that the Indian Oil Corporation’s owned refineries were operating at 95 percent capacity in April, down from 100 percent at the same time the previous month.
An official at the IOC was quoted as saying, “If cases continue to rise and curbs are intensified, we may see cuts in refinery runs and lower demand after a month.” Hundreds of seafarers risked being stuck at sea beyond the expiry of their contracts, a large independent crude ship owner reportedly told Bloomberg.
India reportedly bought more American and Canadian oil at the expense of Africa and the Middle East, reducing purchases from members of the Organisation of the Petroleum Exporting Countries to around 2.86 million barrels per day.
This squeezed the group’s share of imports to 72 percent from around 80 percent previously, as India’s refiners were diversifying purchases to boost margins, according to Reuters.
India also plans to increase local crude oil production and reduce import expenses as its population swells, according to Bloomberg.
A deregulation plan by the Narendra Modi-led government to boost national production to 40 million tonnes of crude oil by 2023/2024, an increase of almost eight million tonnes, had already been initiated.
According to Business Today, an Indian paper, the country currently imports 82 percent of its oil needs, which amounted to $87bn in 2019.
Invest Africa and DLA Piper Partner to Support ESG Best Practice in African Renewable Energy Projects
The global law firm, DLA Piper, has partnered with Invest Africa, the leading trade and investment platform for African markets, to support the development of ESG best practice in African renewable energy projects.
Clear Environmental, Social and Governance (ESG) targets and measurements have become an increasingly important part of fundraising as investors seek to align their portfolios with sustainable growth. For a continent boasting ample natural resources, this presents a significant opportunity for Africa’s green energy sector. However, renewable does not always equal sustainable and developing and articulating ESG metrics can pose a significant challenge to projects as they prepare investment rounds.
The project will assemble experts from the worlds of impact investment, development finance and law. Across a series of online meetings, participants will discuss strategies to improve ESG practices in African renewable projects from both a fundraising and operational perspective.
Amongst those speaking in the inaugural session on Thursday 13th May are Cathy Oxby, Chief Commercial Officer, Africa Greenco, Dr. Valeria Biurrun-Zaumm, Senior Investment Manager, DEG, Orli Arav, Managing Director – Facility For Energy Inclusion (FEI) – Lion’s Head Global Partners, Beatrice Nyabira, Partner, DLA Piper Africa, Kenya (IKM Advocates) and Natasha Luther-Jones, Partner, Global Co-Chair of Energy and Natural Resources, International Co-Head, Sustainability and ESG, DLA Piper.
Veronica Bolton-Smith, COO of Invest Africa said, “Africa is particularly vulnerable to the impact of climate change despite contributing very little to global emissions. As the price of renewables fall, they will form an ever more important part of Africa’s electrification. In this context, it is essential that projects be given the tools to apply best practice in ESG not only from an environmental perspective but also in terms of good governance, fair working conditions and contribution to social inclusion. I look forward to working closely with DLA Piper on this important topic.”
Natasha Luther-Jones, Global Co-Chair Energy and Natural Resources and International Co-Head Sustainability and ESG at DLA Piper also commented, “Climate change is one of the biggest challenges companies, and people, face today and when we look at its reduction – whether that be in how we power our devices, what we eat or how we dress, where we live or how we work – all roads come back to the need to increase the amount of accessible, and affordable, clean energy. However, renewable energy companies are not automatically sustainable as sustainability is a focus on all ESG factors, not just environmental. We know the need for renewable energy is only going to continue to rise, and therefore so will the number and size of renewable energy companies. The additional challenge is to make sure they are truly sustainable organisations and that’s what we’re excited about discussing during the webinar.”
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