Latest news with #MukeshSahdev
Time of India
24-06-2025
- Business
- Time of India
Iran's oil is stuck, China's refineries are down — Is a global price shock coming?
New Delhi: Oil prices, which had shown signs of spiking amid rising tensions between Iran and Israel, have eased back below $70 per barrel following an unexpected ceasefire announcement. According to energy consultancy Rystad Energy, this truce came earlier than markets anticipated and has shifted the global oil narrative from supply shock fears to questions around long-term price stability. 'Assuming the ceasefire holds, it reinforces our view that de-escalation was more likely than a full blockade of the Strait of Hormuz,' said Mukesh Sahdev, Global Head of Commodity Markets – Oil at Rystad Energy. The Strait of Hormuz is a strategic chokepoint through which about 20 per cent of global oil flows. What does this mean for oil prices going forward? With fears of escalation receding, markets are now focusing on US-Iran negotiations . Rystad expects Brent crude to hover near $70 per barrel, as the market digests how long the ceasefire will hold and whether it leads to a renewed nuclear agreement or easing of sanctions on Iranian crude exports. The key question, Sahdev said, is no longer how high oil can go, but where it will settle — with possibilities ranging between the low $60s and mid-$70s depending on how events unfold. How is Iran connected to oil prices? Iran exports up to 2.2 million barrels of crude per day, with China being its main buyer. Almost all of Iran's oil exports go to China, often at discounted rates. But recent US sanctions on China's teapot refineries (small private players) and some Singapore-based traders have reduced flows by half — down to 1 million barrels per day. Iranian tankers have been seen waiting near Shandong ports, and much of the crude has moved to floating storage, as Chinese demand has slowed due to maintenance outages and subdued refining activity. If the ceasefire holds and sanctions ease, Iranian oil could find new buyers. But if Chinese demand doesn't pick up, Iran would need to diversify its buyers, as it did in 2018, when it exported to more than 10 countries. What's happening in China's oil market? China imported around 11 million barrels per day of crude recently, with Iranian oil accounting for 10-15 per cent of that. However, China's refinery runs in May were at 14.27 million bpd, the lowest this year, due to scheduled maintenance and reduced operations by teapot refiners. Despite this slowdown, China has built up crude stocks in recent months, enough to cover 90–100 days of demand. As a result, analysts say China will not need to engage in panic buying, even if Iranian supply is interrupted. That said, product inventories like gasoline and diesel are at five-year lows, suggesting China will ramp up refining activity between June and September, which could raise demand slightly. Where will Iran's crude go if China slows buying? With production steady at 4.2 million bpd, and about 2 million bpd available for export, Iran would need to redirect volumes if China pulls back. Historically, countries across Asia-Pacific and the EU were buyers, but current sanctions and market dynamics make this difficult. Rystad expects India could become a key buyer of Iranian LPG, if sanctions ease or trade dynamics shift. Iran's medium sour crude matches many global refineries' requirements, and declines in Venezuela and Russia's output could open space for Iranian barrels — provided political roadblocks are cleared. What's the role of OPEC+ in stabilising the market? Rystad notes that OPEC+ is likely to remain cautious, gradually unwinding production cuts to maintain price stability without pushing the market into contango (a state where future prices are higher than spot prices). The IEA has raised its call on OPEC+ crude by 300,000 bpd for 2025, aligning with the group's current output plans. Despite easing tensions, Iran and Russia's crude flows will remain key in determining supply balance in the second half of the year. How is US shale responding to current prices? Even though prices are near $70 per barrel, US shale production is unlikely to ramp up significantly. Rystad forecasts only a 300,000 bpd increase in US crude and condensate production this year. The oil rig count in the US has declined, and while gas rigs have risen slightly, producers are cautious. The market structure — with backwardation in WTI crude (spot prices higher than futures) — makes it difficult for producers to hedge, reducing the incentive to expand output. Meanwhile, US crude inventories have dropped by 36 million barrels year-on-year, and a 6.5 million-barrel draw is expected for the week ending June 20. The drawdown may help support WTI prices temporarily, but volatility remains high. What does this mean for India? For India, which imports over 85 per cent of its oil, any easing in crude prices provides some relief on import bills and fuel inflation. The return of Iranian barrels to the global market, either through direct trade or indirect displacement, could improve supply availability. However, a large part of the equation depends on US policy towards Iran, OPEC+ production decisions, and China's refining behaviour in the coming months. What lies ahead? The next few weeks will be crucial. The ceasefire's durability, progress on a US-Iran agreement, and reshuffling of crude flows — especially from Iran and Russia — will determine whether oil remains stable or re-enters a volatile phase. For now, the market is balanced but sensitive. Any policy misstep, supply disruption or diplomatic breakdown could shift prices quickly. As Rystad Energy puts it, 'Signals remain uncertain, and geopolitical risks persist, keeping volatility high, even as some progress towards peace is made.'
Yahoo
16-06-2025
- Business
- Yahoo
Rystad: Oil Prices To Remain Below $80 Despite Escalating Middle East Tensions
Oil prices are likely to remain capped below $80 per barrel despite the escalating Israel-Iran conflict, research firm Rystad Energy said on Monday, as Iran and Israel continue to trade strikes with the escalation now in its fourth day. 'Based on our earlier disruption simulations, we see oil prices capped below $80 per barrel,' Mukesh Sahdev, Rystad Energy's Global Head of Commodities Markets – Oil, said in a market update, carried by Africa Oil+Gas Report. The conflict appears likely to be contained and the United States could potentially play a central role, according to Sahdev. The worst fear in the market is a potential closure of the Strait of Hormuz, the world's most critical crude flow lane where more than 20 million barrels of crude pass every day—equal to a fifth of global daily oil consumption. While disruption to Strait of Hormuz flows could be devastating and would send oil prices spiking and add further tensions, it is an unlikely scenario for many observers and analysts, including those at Rystad Energy. 'A blockade remains the key risk that could push markets into uncharted territory,' Janiv Shah, Rystad Energy's Vice President, Commodities Markets – Oil, said. However, 'Given its interest in keeping prices closer to $50, the US could play a stabilizing role,' Shah added. 'We maintain our view that this is likely to remain a short-lived conflict, as further escalation risks spiraling beyond the control of key stakeholders,' Shan said. Despite Israel and Iran hitting each other's energy sites over the weekend, the targets are not material to global oil production or crude flows. Following the oil price jump on Friday after the start of the Israeli strikes on Iran, oil was muted in early trading on Monday, with both benchmarks falling by around 1% and trading in the low $70s per barrel as key oil flows from the Middle East remain unaffected. By Charles Kennedy for More Top Reads From this article on
Bloomberg
13-06-2025
- Business
- Bloomberg
Bloomberg Daybreak: Europe 06/13/2025
Bloomberg Daybreak Europe is your essential morning viewing to stay ahead. Live from London, we set the agenda for your day, catching you up with overnight markets news from the US and Asia. And we'll tell you what matters for investors in Europe, giving you insight before trading begins. Today's guests: Ryan Bohl, Senior Middle East and North Africa Analyst at RANE, Mukesh Sahdev, SVP and Global Head of Commodity Markets at Rystad Energy, Aniseh Bassiri Tabrizi, Senior Analyst at Control Risks. (Source: Bloomberg)
CNBC
14-05-2025
- Business
- CNBC
Oil prices hold near two-week highs on trade war reprieve, weaker dollar
Oil prices held near two-week highs in early trading on Wednesday, supported by an agreement between the U.S. and China to temporarily lower their reciprocal tariffs and a falling U.S. dollar. Brent crude futures inched down 10 cents, or 0.15%, by 0008 GMT to $66.53 a barrel. U.S. West Texas Intermediate (WTI) crude slipped 7 cents, or 0.11%, to $63.60. Both benchmarks climbed more than 2.5% in the previous session. The dollar index, which measures the greenback against a basket of currencies, fell 0.67% on Tuesday after data showed U.S. inflation was lower than expected. A weaker dollar makes oil less expensive for holders of other currencies, increasing demand. The two largest economies on Monday agreed to pause their trade war for at least 90 days, with the U.S. cutting tariffs to 30% from 145% and China slashing duties on U.S. imports to 10% from 125%. Prices had climbed more than $1.60 a barrel on Tuesday following the agreement, settling up nearly 3%. Rystad energy analysts said in a note that the agreement had "eroded some demand side pessimism," though cautioning that there could be lingering impact from the tariffs despite the rollbacks. The market was supported by reported declines in U.S. gasoline and distillate inventories, a sign of resilient fuel demand. Gasoline inventories fell by 1.4 million barrels and distillate stocks fell by 3.7 million barrels, market sources said on condition of anonymity, citing American Petroleum Institute figures on Tuesday. However, crude stocks rose by 4.3 million barrels. Analysts polled by Reuters expected gasoline stocks to fall by 600,000 barrels, distillate inventories to rise by about 100,000 barrels and crude stocks to fall by 1.1 million barrels. Official weekly inventory data from the U.S. Energy Information Administration is due on Wednesday at 10:30 a.m. EDT (1430 GMT). The market is watching U.S. President Donald Trump's trip to the Gulf. He kicked off the visit Tuesday with an appearance at an investment forum in Riyadh, where he announced that the U.S. would lift longstanding sanctions on Syria and secured a $600 billion pledge from Saudi to invest in the U.S. Rystad Energy's global head of commodity markets Mukesh Sahdev said that preventing oil price spikes over the summer travel season will be a key part of the president's agenda on the trip, adding that the U.S. could take advantage of lower prices to buy more Middle East crude for its Strategic Petroleum Reserve. "The big unknown for the market is how U.S. actions related to Iran, Russia and Venezuela will result in supply disruptions or additions," Sahdev said. The U.S. on Tuesday imposed fresh sanctions on some 20 companies it said were helping Iran's Armed Forces General Staff and its front company, Sepehr Energy, send Iranian oil to China. The sanctions come following a fourth round of U.S.-Iran talks in Oman aimed at addressing disputes over Iran's nuclear program.
New Straits Times
14-05-2025
- Business
- New Straits Times
Oil prices hold near two-week highs on trade war reprieve, weaker dollar
BEIJING: Oil prices held near two-week highs in early trading on Wednesday, supported by an agreement between the US and China to temporarily lower their reciprocal tariffs and a falling US dollar. Brent crude futures inched down 10 cents, or 0.15 per cent, by 0008 GMT to US$66.53 a barrel. US West Texas Intermediate (WTI) crude slipped 7 cents, or 0.11 per cent, to US$63.60. Both benchmarks climbed more than 2.5 per cent in the previous session. The dollar index, which measures the greenback against a basket of currencies, fell 0.67 per cent on Tuesday after data showed US inflation was lower than expected. A weaker dollar makes oil less expensive for holders of other currencies, increasing demand. The two largest economies on Monday agreed to pause their trade war for at least 90 days, with the US cutting tariffs to 30 per cent from 145 per cent and China slashing duties on US imports to 10 per cent from 125 per cent. Prices had climbed more than $1.60 a barrel on Tuesday following the agreement, settling up nearly 3 per cent. Rystad energy analysts said in a note that the agreement had "eroded some demand side pessimism," though cautioning that there could be lingering impact from the tariffs despite the rollbacks. The market was supported by reported declines in US gasoline and distillate inventories, a sign of resilient fuel demand. Gasoline inventories fell by 1.4 million barrels and distillate stocks fell by 3.7 million barrels, market sources said on condition of anonymity, citing American Petroleum Institute figures on Tuesday. However, crude stocks rose by 4.3 million barrels. Analysts polled by Reuters expected gasoline stocks to fall by 600,000 barrels, distillate inventories to rise by about 100,000 barrels and crude stocks to fall by 1.1 million barrels. Official weekly inventory data from the US Energy Information Administration is due on Wednesday at 10:30 a.m. EDT (1430 GMT). The market is watching US President Donald Trump's trip to the Gulf. He kicked off the visit Tuesday with an appearance at an investment forum in Riyadh, where he announced that the US would lift longstanding sanctions on Syria and secured a US$600 billion pledge from Saudi to invest in the US Rystad Energy's global head of commodity markets Mukesh Sahdev said that preventing oil price spikes over the summer travel season will be a key part of the president's agenda on the trip, adding that the US could take advantage of lower prices to buy more Middle East crude for its Strategic Petroleum Reserve. "The big unknown for the market is how US actions related to Iran, Russia and Venezuela will result in supply disruptions or additions," Sahdev said. The US on Tuesday imposed fresh sanctions on some 20 companies it said were helping Iran's Armed Forces General Staff and its front company, Sepehr Energy, send Iranian oil to China. The sanctions come following a fourth round of US-Iran talks in Oman aimed at addressing disputes over Iran's nuclear programme.
