Oil Inches Higher on Possible Supply Disruptions in Russia

Core Insights - Russian oil producers may face output reductions due to intensified Ukrainian drone attacks damaging critical export and port infrastructure [1] - China has announced a lower-than-expected third tranche of clean oil product export quotas for 2025, indicating continued tightening of export controls [3][4] Group 1: Chinese Oil Export Quotas - The third export quota batch for 2025 is set at 8.395 million tonnes, lower than the anticipated 9 million tonnes, reflecting Beijing's tightening of export controls [3] - Total Chinese product exports for the year are projected at 40.77 million tonnes, a decrease of 0.6% compared to 2024, despite an oversupply in the domestic market [4] - The largest private downstream firm, ZPC, has seen a reduction in its 2025 quota for clean and dirty products by 6% and 62%, respectively [4] Group 2: Shifts in Export Products - Jet fuel has overtaken gasoline as the main export product from China in both 2024 and 2025, with exports rising to 280,000 barrels per day, accounting for 38% of total exports [5] Group 3: Market Movements - ExxonMobil is implementing a new shareholder voting mechanism to align retail investors with board recommendations, aiming to counter activist campaigns [6] - Azerbaijan's SOCAR is nearing a deal to acquire Italiana Petroli, which operates two refineries in Italy [6] - Blackstone has agreed to purchase a natural gas plant in Pennsylvania for nearly $1 billion, adding 620 MW capacity [7] - Chord Energy is acquiring Williston Basin assets from ExxonMobil's XTO Energy for $550 million, adding 48,000 net acres and approximately 9,000 barrels of oil equivalent per day [8] Group 4: Oil Price Movements - Oil prices have been slightly increasing due to concerns over potential supply disruptions in Russia, with Ukrainian drone strikes affecting crude flows to Baltic ports [9] - The US Federal Reserve may provide support for oil prices, with expectations for ICE Brent to attempt to reach $69 per barrel [10]