By Katya Golubkova and Sam Li TOKYO (Reuters) -Oil prices rose around 1% on Thursday after U.S. President Donald Trump said Indian Prime Minister Narendra Modi had pledged his country would stop buying oil from Russia, a move that could drain supply elsewhere. Brent crude futures rose 56 cents, or 0.9%, to $62.47 a barrel by 0655 GMT. U.S. West Texas Intermediate (WTI) futures climbed 58 cents, or 1%, to $58.85. Both contracts touched their lowest since early May in the previous session on U.S.-China tr ...

Core Insights - The U.S. Treasury has imposed sanctions on the Rizhao Shihua Crude Oil Terminal in China, impacting the handling of Iranian crude oil [2][3] - Three very large crude carriers (VLCCs) have diverted from their original destination to other ports in China due to these sanctions [1][2] - The sanctions are part of a broader strategy to disrupt Iran's energy export capabilities, with China being a significant buyer of sanctioned Iranian crude [2][3] Group 1: Sanctions and Impact - The latest sanctions target over 100 individuals, tankers, and an independent refiner, specifically affecting the Rizhao Shihua Crude Oil Terminal [2] - Sinopec, which owns 50% of the terminal, is likely to face disruptions in its crude oil imports, as the terminal is crucial to its operations [3] - The terminal accounts for approximately 20% of Sinopec's imported crude, indicating a significant potential impact on the company's supply chain [3] Group 2: Oil Import Trends - China reported a 3.9% increase in total oil imports for September, averaging about 11.5 million barrels per day, although this reflects a 4.55% decline from August [4] - The effect of the sanctions on overall Chinese oil imports remains uncertain, as importers may adapt by transferring oil from larger vessels to smaller ones for delivery to other Sinopec refineries [4]

U.S. and EU sanctions have denied the Russians the equipment and technology that would have been needed to carry out this feat. The U.S. shale production growth has supplied most of the world’s incremental oil production growth over the last decade and a half. Since 2010 shale reservoirs have added about 8 million BOPD to global supplies. U.S. Field Production of Crude Oil has ramped from about 5.4 mm BOPD to 13.5 mm today. What isn’t fully appreciated by the average person is that this success was the resu ...

Summary of Key Points from J.P. Morgan's Oil Markets Weekly Industry Overview - The report focuses on the oil market dynamics, particularly the implications of U.S. sanctions on Russian oil exports and the responses from major importing countries like China and India [1][3][7]. Core Insights and Arguments - The Trump administration has warned that India and China could face penalties for their ongoing purchases of Russian oil, potentially putting 2.75 million barrels per day (mbd) of Russian seaborne oil exports at risk [3] - China has indicated it will maintain its buying patterns, although it may quietly reduce imports in exchange for eased restrictions on technology exports [3] - India has shown compliance with European and U.S. secondary sanctions, directing its oil refiners to develop plans for sourcing non-Russian crude [3] - Russia could potentially divert 0.8 mbd of its seaborne exports to countries like Egypt, Malaysia, Vietnam, Brunei, and South Africa [3] - China's blending capacity could absorb an additional 1 mbd of Russian crude, raising Russia's share to 25% of China's imports, surpassing the 20% threshold [3][27] - If India ceases purchases, 1.55 mbd of Russian oil exports are at risk, and if both India and China stop, nearly 2.75 mbd would be jeopardized [28] - The U.S. administration may find sanctioning Russia's oil exports unfeasible without causing a significant spike in oil prices [7] Additional Important Insights - Brent oil prices spiked by $5 per barrel following news of potential sanctions, with expectations of a decline to $60 by year-end if no decisive action is taken [6] - The report highlights that the geopolitical landscape is influencing oil trade, with countries like Turkey maintaining a balancing act between Russia and the West [21] - Several Indian state-owned refiners have halted Russian oil purchases, and private refiners are considering reductions due to new EU sanctions [5] - Brazil's imports of Russian clean petroleum products surged by 500% since the start of the Russia-Ukraine war, although volumes remain modest at 200,000 barrels per day (kbd) [22] - The report outlines potential new trade routes and refinery capabilities in various countries that could absorb Russian crude, including Egypt, Malaysia, and South Africa [32][33][38] Conclusion - The ongoing geopolitical tensions and sanctions are reshaping the global oil market, with significant implications for Russian oil exports and the strategies of major importing countries. The ability of these countries to adapt to changing circumstances will be crucial in determining the future dynamics of the oil market [1][3][7].

Group 1 - President Trump has cleared China to purchase Iranian oil, lifting longstanding sanctions that limited trade relations [1] - Trump expressed hope that China will also buy significant amounts of oil from the U.S. [1] - Oil prices have continued to drop, with West Texas Intermediate crude futures falling more than 8% to about $67 per barrel [5] Group 2 - The ceasefire agreement between Iran and Israel has alleviated concerns about the potential shutdown of the Strait of Hormuz, a critical oil shipping route [2] - Approximately 20% of the world's oil supply passes through the Strait of Hormuz, but closing it would negatively impact Iran's own revenue [8] - Energy Secretary Chris Wright stated that the U.S. is now a net oil exporter and would not be significantly affected by any disruptions in the Strait [9]