First Look: US unlikely to enforce sanctions on Iran this year, says Energy Aspects
April 22, 2024
Oil is trading lower around $82.45, extending losses from last week
Last week, prices fell by more than $2.50/Bbl as geopolitical risk premium eased somewhat following an Iranian attack on Israel and the subsequent Israeli response
US unlikely to enforce sanctions on Iran this year (BBG)
According to Energy Aspects, the US may wait to implement new sanctions on Iranian crude exports as it seeks to avoid higher energy prices this year
Legislation was recently passed that would expand the scope of current sanctions on Iran to include foreign ports, vessels, and refineries that use or transport crude from Iran
Enforcing these sanctions may be difficult as more than half of Iran's crude exports are shipped to China’s independent refineries, which operate outside the US financial system
If the new sanctions are implemented, 200-500 MBbl/d of exports could be affected, out of a total of 1.2-1.5 MMBbl/d
Medium-sour crude grades have been trading higher (BBG)
Middle-Eastern varieties of medium-sour crude have been fetching a higher premium in the spot market
This reflects underlying changes in the supply-demand balance of the crude market, as OPEC has significantly reduced the supply of these grades of oil
Another contributing factor is that while demand for diesel has been weak, demand for fuel oil has increased, driven by seasonal factors
Natural gas prices trade higher amid bouts of cold and lower production
May ’24 Henry Hub is up 2.3c this morning to trade around $1.775/MMBtu
The Summer ’24 strip is up 2.2c to $2.261 and Winter ‘24/’25 strip is up 0.8c to $3.409
Today's Euro Ensemble indicates a mixed forecast with cooler conditions in the Northeast and Southeast and warmer weather in the Midwest and South Central, transitioning to above-normal temperatures across the Lower 48 next week
Ozark Gas Transmission has completed the Supply Access Project, enabling a flow increase of up to 130,000 Dth/d from east to west from the MRT and NGPL receipt points
Initiated in response to disruptions experienced during Winter Storm Uri in February 2021, the project aims to enhance gas supply reliability for shippers in the region
Located near the Oklahoma-Arkansas border, it supports major customers such as Arkansas Oklahoma Gas (AOG), Arkansas Electric Cooperative Corporation (AECC), and Black Hills Energy with firm transportation agreements
U.S. prepares to roll out new EPA emissions rules for oil & gas sector (Criterion)
The White House reportedly completed its review of the EPA’s final emissions reporting rules, announced in December 2023, which target reductions in GHGs and VOCs from the oil and natural gas sectors
New regulations will affect both new and existing facilities, including well sites, storage tanks, gathering and compressor stations, natural gas processing and transmission, and storage assets.
Implementation requires advanced methane detection technology, new emission control equipment, and operational changes, which can increase operators' costs
Furthermore, stricter emissions standards may reduce the operational viability of older or marginally productive wells, potentially resulting in early shut-ins or costly retrofitting needs
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