Energy and commodities highlights: Sanctions, US clean energy goals, LNG's second wave

Commodity markets were weighing supply side risks this week, as key producing countries continue to grapple with sanctions and political upheaval.

In Libya, Africa’s third-largest oil producer and a significant supplier of gas to Europe, violence has escalated and the country is in danger of falling back into civil war. International oil companies like Italy’s Eni have started evacuating staff from Tripoli.

Meanwhile, despite sanctions Iran’s oil exports recovered in March off the back of Chinese and South Korean buying. But based on data and information from market sources, Iranian production has recently declined, and the country drew heavily on stocks to support the export surge.

Russia’s energy sector is also subject to US sanctions, which include measures targeting the development of Russian deepwater and Arctic offshore projects. Speaking at a regional forum, Russian President Vladimir Putin said that sanctions had hampered, but not stopped, development of hydrocarbons in the Russian Arctic.

Separately, there were new question marks in Europe over key routes for the transport of Russian fuels. The European Commission cast doubt over the timely startup of the Nord Stream 2 pipeline, while the Belarusian president threatened to suspend Russian oil transit through the country amid trade frictions with its neighbour.

GRAPHIC OF THE WEEK

US states are ramping up their mandates for clean and renewable energy in the face of federal climate inaction, declining renewable costs and demands from electricity customers, but new policies and yet-to-exist technology will be needed for states to meet ambitious 100% clean energy goals.

Click for full-size infographic

VIDEO: LNG’S SECOND WAVE

Vivek Chandra, CEO of Texas LNG and author of the book Fundamentals of Natural Gas: An International Perspective, talks to Eric Yep, senior editor at S&P Global Platts. They discuss the second wave of US LNG projects, what it means for Asian customers, the impact of trade war tensions and his proposed LNG export terminal.

Analysis: VLGC freight rate hits multi-year high amid logistical issues, open arbitrage

Logistical issues, a wide open arbitrage for US LPG to Asia and an evolution in global trade flows have pushed freight for Very Large Gas Carriers to multi-year highs in the Middle East and US Gulf Coast regions.

ELECTRIC VEHICLES

February global EV sales fall 21% as Chinese market slows

Global sales of plug-in electric vehicles fell by 21% in February month on month, led by a sharp fall in China due to seasonal factors and ahead of the government cutting subsidies for EVs in March, according to S&P Global Platts Analytics.

OIL

Canada's oil supply future at heart of upcoming Alberta election

An oil policy fight is heating up as Alberta prepares to go to the polls on April 16, following production cuts and lack of progress on new pipeline capacity. Premier Rachel Notley's party could lose to opposition leader Jason Kenney, who has promised quicker action to bring more Alberta crude to international markets.

THE LAST WORD

“This will require more diligence be done by every business that is considering doing things that are even now second and third orders removed from what you might think of as a traditional connection to the Iranian economy.”

– Mike Pompeo, US Secretary of State, as the government moved to designate the Islamic Revolutionary Guard Corps a terrorist group.