The United States and European Union officially reached a tariff agreement on Sunday, averting a potentially crippling transatlantic trade war. Following months of contentious negotiations, U.S. President Donald Trump and European Commission President Ursula von der Leyen announced the deal at Trump’s Turnberry golf resort in Scotland.
Oil prices continued to move higher on Friday morning in Asia, supported by renewed optimism surrounding U.S.-EU trade negotiations and expectations that Russia will restrict gasoline exports. Even reports of Chevron’s return to Venezuela, which analysts estimate could add around 200,000 barrels per day to global supply, have been unable to pull prices lower.
In its 18th package of sanctions against Russia over its invasion of Ukraine, adopted Friday, the 27-member bloc included Nayara in the list of targeted entities, saying Rosneft owns a majority stake in an “important refinery” operated by Nayara and that the site is a “major refiner of Russian crude”.
EU states earlier approved a fresh sanctions package on Russia that included new banking restrictions and curbs on fuels made from the nation’s petroleum. The package – the bloc’s 18th since Moscow’s full-scale invasion of Ukraine – will also cut off 20 more Russian banks from the international payments system SWIFT and impose restrictions on Russian petroleum refined in other countries. A large oil refinery in India, part-owned by Russia’s state-run oil company, Rosneft PJSC, was also blacklisted.
The EU’s move to restrict fuels such as diesel made from Russian crude could have some market impact, as Europe imports the fuel from India, which in turn buys large amounts of Russian crude. Diesel markets have been showing signs of tightness for several weeks, and prices strengthened in early European trading relative to crude.
“Without new approaches to financing and capital efficiency, TSOs may fall short of delivering the infrastructure needed to meet Europe’s climate and reliability goals,” the company said, identifying three problematic areas. These are, first, limitations to TSOs capacity to raise money via debt or equity; second, a tension between efforts to keep electricity costs low for consumers while ensuring a certain level of returns to investors in grid operators; and third, different expectations of these grid operators from governments, on the one hand, and investors, on the other.
The 27-member bloc imported a total of 69 billion cubic meters (2.44 trillion cubic feet) of gas in the January-March period, down two percent quarter-on-quarter and year-on-year. Pipeline gas accounted for 55 percent or 38 Bcm while liquefied natural gas (LNG) contributed 45 percent or 31 Bcm, according to the Commission’s latest quarterly gas market report.
“If Germany sinks, we all go with them,” one corporate lobbyist told Politico, pretty much summarizing the prevailing sentiment across the EU about its biggest economy, which has been teetering on the brink of recession, in large part because of high energy costs after it gave up cheap Russian pipeline gas and shut down its last operating nuclear reactors while doubling down on wind and solar—which are heavily subsidised.
The oil and gas industry is pushing back against the methane policy adopted recently by the European Union aimed at limiting emissions of the potent greenhouse gas.
Lowering a Group of Seven-sponsored oil-price cap to $45 will require backing from the US. The price threshold, which bans G-7 service providers from transporting and dealing with crude sold above the cap, is currently set at $60. G-7 leaders will discuss the issue when they meet in Canada later this month, von der Leyen said.