Investment Rating - The report maintains an "Outperform" rating for the industry [1] Core Insights - Sustainable Aviation Fuel (SAF) is a crucial method for reducing carbon emissions in aviation, capable of reducing carbon emissions by up to 85% compared to traditional aviation fuels [2][20] - Policies in regions such as the EU, the US, and China are driving the development of SAF, creating significant market opportunities [2][39] - The SAF production landscape is diverse, with various technologies being developed, although there are differences in maturity and feasibility [2][11] - Used Cooking Oil (UCO) is a key raw material for SAF production, and China is the largest exporter of UCO, with an estimated annual collection capacity of about 8.1 million tons [2][5] - Investment recommendations include companies such as Jiaao Environmental Protection, Haineng Technology, and others involved in the SAF sector [2][6] Summary by Sections SAF as a Key Method for Carbon Reduction - SAF is a direct substitute for traditional aviation fuel, with high energy density and compatibility with existing aviation systems, requiring minimal infrastructure changes [20][22] - The SAF supply chain includes various raw materials, primarily waste cooking oils and agricultural residues, with significant potential for carbon reduction [22][23] Policy Driving SAF Development - The EU has set ambitious SAF blending targets of 6% by 2030, 34% by 2040, and 70% by 2050, while the US primarily uses subsidies to promote SAF production [2][39][44] - The global demand for SAF is expected to grow significantly, with projections indicating a need for 35 million tons by 2050 [38][39] Diverse SAF Production Routes - The report highlights multiple production technologies for SAF, with HEFA being the most commercially viable, but AtJ and GFT technologies showing long-term potential [2][29] - The cost of SAF remains high due to technological maturity, limited raw material supply, and an underdeveloped supply chain [23][24] UCO Resource Attributes - UCO is a critical feedstock for SAF production, and China's large population and developed catering industry contribute to a significant UCO supply [2][5] Related Companies - The report suggests monitoring companies such as Jiaao Environmental Protection, Haineng Technology, and others for investment opportunities in the SAF sector [2][6]

Neste fell after forecasting flat sales volumes for renewable products and a decline for its oil refining unit in the full year. https://t.co/7OuEJTzMiV ...

Summary of Key Points from the Conference Call Industry Overview - The focus is on the upcoming 4Q25 earnings season for Europe's Big Oils, starting with Equinor on February 4th, 2026, and the guidance for 2026 is expected to be a key topic [1][9] - The preference ranking for investment is Oil Services > Big Oils > Exploration & Production (E&Ps), with TotalEnergies (TTE) highlighted as the top pick among Big Oils [1] Core Insights and Arguments - The $60/bbl Brent price assumption is challenging for Europe's Big Oils, leading to a projected decline in refining margins by 35% compared to 4Q25 [2] - Capital expenditure (capex) budgets are expected to remain flat, with an average buyback cut of approximately 25% across the sector, except for TTE [2] - TTE and Galp are noted for their organically falling breakeven Brent prices, with TTE's Integrated Power business transitioning from a drag to a contributor to free cash flow (FCF) [3][11] - TTE's recent trading update has positively influenced consensus estimates, contrasting with downgrades from peers like BP and Shell [4] Financial Projections - The aggregate organic cash flow from major companies is projected to show a $16 billion deficit post distributions, which decreases to approximately $5.5 billion after accounting for inorganic cash flows [13] - TTE is expected to have the lowest organic breakeven price in the peer group at around $60/bbl for 2026, with projections of it dropping below $55/bbl by 2027 [14][16] - TTE's capex is anticipated to decline by over 10% year-on-year in 2026, with a significant reduction expected by 2028 [17][20] Balance Sheet and Debt Analysis - The analysis indicates that all Big Oils will reduce shareholder distributions in 2026 compared to 2025, with Equinor expected to see the most significant declines [22] - BP is projected to maintain the highest gearing in the peer group at around 40%, while TTE and Galp are expected to decrease their net debt year-on-year [31][36] Market Sentiment and Consensus - The consensus estimates for 4Q25 earnings have been revised down by 8% year-to-date, with TTE showing a rare positive update that has led to flat revisions compared to an average 8% downgrade across peers [49] - The overall sentiment indicates a cautious outlook for cash flows, with aggregate payouts expected to exceed 140% of organic FCF at the $60/bbl Brent price [10] Upcoming Catalysts - Key upcoming earnings reports include Galp and Equinor on February 4th, followed by several other companies throughout February [62] Additional Insights - The report emphasizes the importance of cash flow cushions and balance sheet strength, particularly for TTE and Equinor, as they navigate the challenging oil price environment [10][11] - The analysis suggests that the market may have already priced in the expected cuts to buybacks, indicating a potential for volatility in stock performance as earnings reports are released [65] This summary encapsulates the critical insights and projections regarding the oil industry and specific companies, particularly focusing on TotalEnergies and its competitive positioning within the sector.

Industry Analysis: SAF Sector Insights Industry Overview - The SAF (Sustainable Aviation Fuel) industry is experiencing a significant shift from "policy-driven" to "hard gap-driven" dynamics, indicating a transition in market drivers [1] - The EU's ReFuelEU Aviation regulation, effective in 2025, mandates the incorporation of 2%, 5%, and 70% sustainable aviation fuel in aviation fuel by 2025, 2030, and 2035 respectively, translating to a demand of 140 million, 350 million, and 5 billion tons [1] Key Insights - The SAF prices have surged over 50% year-on-year due to supply chain disruptions, leading to a widening price gap with upstream raw materials like UCO (Used Cooking Oil) [1] - Despite a potential decline in short-term demand post-2026, the UK’s blending target of 3.6% and Singapore's taxation policies are expected to sustain global production capacity at 4-5 million tons, with an effective capacity of 2.4 million tons, which still falls short of the global demand of 2.8 million tons (Europe 1.8 million + USA 600,000 + South Korea and others 400,000) [1][2] Profitability and Capacity Insights - The industry logic has shifted from mere policy expectations to realizing excess profits driven by scarce refining capacity [2] - The profit distribution within the supply chain is being restructured, emphasizing that companies with existing or upcoming SAF production capacity will enjoy the highest processing profits, while those with compliant and traceable UCO resources will benefit from compliance premiums amid global trade barriers [2] Major Suppliers and Capacities - Key SAF suppliers and their capacities include: - Jiaao Environmental: 370,000 tons (with an additional 500,000 tons under construction) - Longkun Environment: 170,000 tons (planning to expand to 420,000 tons) - Sinopec: Zhenhai Refining 100,000 tons - Haineng Energy: Shandong Sanju 50,000 tons - Overseas supplier Neste: over 500,000 tons - Unlisted companies: Junheng Bio (200,000 tons) and Yigao Environmental (200,000 tons) [2]

SAF Industry Analysis: Super Cycle Driven by Supply-Demand Mismatch Industry Overview - The SAF (Sustainable Aviation Fuel) industry is experiencing a significant shift from "policy-driven" to "hard gap-driven" dynamics, particularly influenced by the upcoming EU ReFuelEU Aviation regulation set to take effect in 2025, which mandates the incorporation of 2%, 5%, and 70% sustainable aviation fuel in aviation fuel by 2025, 2030, and 2035 respectively, translating to a demand of 140 million, 350 million, and 5000 million tons [1][2] Key Insights - The price of SAF has surged over 50% throughout the year due to supply chain disruptions, leading to a significant widening of the price gap with upstream raw material UCO (Used Cooking Oil) [1] - Despite a potential decline in short-term demand post-2026, the UK’s blending target of 3.6% and Singapore's taxation policies are expected to support ongoing demand, with global production capacity estimated at 4-5 million tons, and an effective capacity of 2.4 million tons, which still falls short of the global demand of 2.8 million tons (Europe 1.8 million + USA 600,000 + South Korea and China 400,000) [1] Profit Distribution in the Industry - The industry logic has shifted from mere policy expectations to the realization of excess profits driven by scarce refining capacity [2] - Companies with existing or upcoming SAF production capacity are positioned to enjoy the highest processing profits, while those with compliant and traceable UCO resources will benefit from compliance premiums amid global trade barriers [2] Major SAF Suppliers and Capacities - Key SAF suppliers and their production capacities include: - Jiaao Environmental: 370,000 tons (with an additional 500,000 tons under construction) - Longkun Environment: 170,000 tons (planning to expand to 420,000 tons) - Sinopec: Zhenhai Refining 100,000 tons - Haineng Energy: Shandong Sanju 50,000 tons - Overseas Neste: over 500,000 tons - Unlisted Junheng Biological: 200,000 tons - Yigao Environmental: 200,000 tons [2]

Analyst’s Disclosure:I/we have a beneficial long position in the shares of NTOIF either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. While this article may sound like financial advice, please observe that the author is not a CFA or in any way licensed to give financial advic ...

Core Insights - Indian refiners continue to import Russian oil despite reports of halting imports, averaging 1.2 million barrels per day (b/d) in December, lower than the 1.75 million b/d average of 2025 [2] - Prices for Russia's Urals crude have decreased by $6 to $7 per barrel, but demand has improved, stabilizing the differential [3] - High freight costs are impacting Russian oil exports, with chartering costs for Aframax vessels to India rising to around $8 million, approximately 50% higher than early 2025 [4] Market Movers - TotalEnergies has agreed to sell 9.99% of its equity in the SK408 block offshore Malaysia to PTT while retaining a 30% stake and operatorship [5] - Shell is preparing a new drilling campaign in the PEL 39 block offshore Namibia starting April 2026, marking its return to the area after a write-down of the Graff discovery [5] Industry Developments - Neste has revised its 2035 carbon neutrality target, now pledging to cut greenhouse gas emissions by 80% by 2040 [6] - Ecopetrol has reduced its 2026 low-carbon budget by 60% to $225 million, citing a need for broader budget discipline [6] Market Sentiment - Weak Chinese macroeconomic data has influenced market sentiment, with industrial output dropping to its lowest since August 2024, leading to a decline in Brent futures below $61 and ultimately below $60 per barrel [7]

Finland’s Neste is scaling back some of its climate targets and doesn’t expect to stop using crude at its only oil refinery by 2035 as previously guided https://t.co/bdDYYLNr6D ...

Group 1 - The core viewpoint of the article highlights the significant impact of the EU's ReFuelEU Aviation Regulation, which mandates a 2% blending of sustainable aviation fuel (SAF) starting in 2025, with a long-term goal of 70% by 2050 [1] - IATA projects that the demand for SAF will increase dramatically from 1 million tons in 2024 to 18 million tons by 2030, and reach 350 million tons by 2050 [1] - The high cost of SAF compared to traditional jet fuel has led to low procurement willingness among airlines, but the EU's strict blending standards are driving rapid price increases for SAF, with high-end SAF prices in China rising by 47.22% since the beginning of the year [1] Group 2 - The EU has recently approved the Sustainable Transport Investment Plan, which will invest at least €3.3 billion over the next two years to support the renewable fuel industry, with a cumulative investment of €100 billion planned by 2035 to meet aviation and shipping emission reduction targets [1] - The scarcity of raw materials for SAF, such as waste cooking oil, combined with the enforced policy demand, is expected to sustain high industry prosperity [1] - Neste, a leading international company in the sector, reported a more than 150% year-on-year profit increase in its renewable fuels segment for the third quarter, indicating significant improvement in industry profitability [1]

Core Insights - XCF Global has announced key leadership changes aimed at optimizing strategy and accelerating growth in the Sustainable Aviation Fuel (SAF) sector [2][4][5] Leadership Changes - Chris Cooper has been appointed as the new Chief Executive Officer (CEO) and Board Director, effective November 7, 2025. He has extensive experience in the energy transition sector, previously serving as President of Neste U.S. and in senior roles at Phillips 66 and Chevron [3][9] - Wray Thorn, a current board member, has been appointed as Interim Board Chair, succeeding Mihir Dange, to focus on strategic growth and governance initiatives [4][5] - Randy Soule, founder of New Rise Renewables and the largest shareholder, will work closely with Cooper as Senior Operations Adviser to ensure operational excellence [6][7] Strategic Focus - The leadership changes come at a critical time for XCF Global, as demand for SAF is increasing globally. The company aims to leverage its modular facility design and international partnerships to lead in this market [4][5] - The management team, including CFO Simon Oxley, is positioned to drive new growth opportunities and enhance shareholder value through their combined expertise in renewable fuels and capital markets [8] Company Overview - XCF Global is dedicated to accelerating the aviation industry's transition to net-zero emissions by developing and operating advanced SAF production facilities. The company is listed on the Nasdaq Capital Market under the ticker SAFX [11]