Earthquake disrupts Japanese refining operations

: Crude oil, Oil products
21/02/15

Japanese refiners have halted operations at some refineries following a 7.3 magnitude earthquake that occurred offshore Fukushima on 13 February.

Three refineries along with others' secondary units have been shut because of the earthquake.

Eneos was forced to stop operations at its 145,000 b/d Sendai refinery after the earthquake with the duration of the closure still unknown. The company has also shut some secondary units at its 270,000 b/d Negishi refinery because of a power outage but the 150,000 b/d No.4 crude distillation unit (CDU) is operating normally. The 120,000 b/d No.1 CDU at Negishi had already been shut for unknown reasons since 25 January.

Idemitsu halted operations at its 190,000 b/d Chiba refinery because a power outage after the earthquake. Electricity to the refinery has already resumed but the restart schedule is still unclear. Idemitsu subsidiary Toa Oil suspended some secondary units at its 70,000 b/d Kawasaki refinery but the CDU is operating normally.

Fuji Oil was forced to shut the 143,000 b/d Sodegaura refinery in Chiba. But the company is planning to resume operations tomorrow.

The earthquake created tight electricity supplies, especially in the Tohoku area, because some thermal power generation capacity was forced to shut down. But the country's refiners are unlikely to be asked to supply fuel oil for power generation purposes, according to market participants.

By Maiko Nakashima

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25/01/10

Brazil’s inflation decelerates to 4.83pc in December

Sao Paulo, 10 January (Argus) — Brazil's headline inflation decelerated to 4.83pc at the end of 2024, as declines in power costs were only partially offset by gains in fuel and food, according to government statistics agency IBGE. The consumer price index (CPI) slowed from 4.87pc in November and compared with 4.76pc in October. The year-end print compared with 4.62pc in December 2023, but was down from 5.79pc in December 2022. Food and beverage costs rose by an annual 7.69pc in December, accounting for much of the monthly increase, following a 7.63pc annual gain in November. Beef costs increased by an annual 20.84pc in December following a 15.43pc annual gain for the prior month. Higher beef costs in the domestic market are related to the Brazilian's real depreciation to the US dollar, with the Brazilian real depreciating by 27.4pc to the US dollar between 31 December 2023 and the same date in 2024 . Still, beef prices decelerated by 5.26pc in December alone, down from 8pc in November. Soybean oil rose by 29.21pc over the year, an increase of 1.64 percentage points from November. Fuel prices rose by an annual 10.09pc in December after an 8.78pc gain in November. Motor fuel costs grew by 0.7pc in December, compared with a 0.15pc drop in the prior month, thanks to higher gasoline prices. Diesel prices increased by 0.66pc in the 12-month period, while it decreased by 2.25pc in November. Gasoline prices — the major individual contributor to the annual high, according to IBGE — rose by 9.71pc in December from 9.12pc in the prior month. Still, that was lower than in December 2023, when the annual inflation for gasoline stood at 11pc. Power costs in December contracted by an annual 0.37pc in December, as improvements in power generation allowed for removal of a surcharge from customer bills, after a gain of 3.46pc the prior month. In November, Brazil faced lower river levels at its hydroelectric plants after a period of severe droughts . Brazil's central bank is targeting CPI of 3pc with a margin of 1.5 percentage point above or below. Brazil's central bank in December raised its target rate to 12.25pc from 11.25pc as the real's depreciation accelerated. It also signaled it is likely to increase the rate to 14.25pc by March. Monthly inflation accelerated to 0.52pc in December from 0.39pc in November. But the rate was lower than in December 2023, when it stood at 0.56pc. By Maria Frazatto Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

US issues 45Z tax guidance for low-carbon fuels

25/01/10

US issues 45Z tax guidance for low-carbon fuels

Washington, 10 January (Argus) — US producers of low-carbon fuels can start claiming the "45Z" tax credit providing up to $1/USG for road use and $1.75/USG for aviation, following the US Treasury Department's release today of proposed guidance for the credit. The guidance includes proposed regulations and other tools to determine the eligibility of fuels for the 45Z tax credit, which was created by the Inflation Reduction Act to replace a suite of incentives for biofuels that expired at the end of last year. Biofuel producers have been clamoring for guidance from the US Treasury Department so they can start claiming the tax credit, which is available for fuels produced from 1 January 2025 through the end of 2027. "This guidance will help put America on the cutting-edge of future innovation in aviation and renewable fuel while also lowering transportation costs for consumers," US deputy treasury secretary Wally Adeymo said. "Decarbonizing transportation and lowering costs is a win-win for America." The creation of the 45Z tax credit has already prompted a change in US biofuels markets by shifting federal subsidies from blenders to producers. Because the value of tax credit increases for fuels with the lowest lifecycle greenhouse gas (GHG) emissions, it could encourage refiners to source more waste feedstocks such as used cooking oil, rather than conventional crop-based feedstocks. While the guidance is still just a proposal, taxpayers are able to "immediately" use the guidance to claim the 45Z tax credit, until Treasury issues additional guidance, an administration official said. The guidance on 45Z released today affirms that only the producer for the fuel is eligible to claim the credit, not blenders. To be eligible for the tax credit, the fuel must have a "practical or commercial fitness for use in a highway vehicle or aircraft" by itself or when blended into a mixture, Treasury said. Marine diesel and methanol suitable for highway or aircraft use are also eligible for 45Z, as is renewable natural gas that can be used as a transportation fuel. Treasury also released an "annual emissions rate table" offering providers a methodology for determining the lifecycle GHG of fuel. Treasury said a key emissions model from the US Department of Energy, called 45ZCF-GREET, used to calculate the value of the 45Z tax credit is anticipated to be released today, although industry officials said it may be delayed until next week. Treasury said it intends to propose regulations at "a future date" for calculating the GHG emissions benefits of "climate smart agriculture" practices for "cultivating domestic corn, soybeans, and sorghum as feedstocks" for fuel. Those regulations could lower the calculated lifecycle emissions of fuel from those crop-based feedstocks and increase the relative 45Z tax credit. US biofuel producers said they are still awaiting key details on the 45Z tax credit, including the update to the GREET model. Among the outstanding questions is if the guidance released today provides "enough certainty to negotiate feedstock and fuel offtake agreements going forward", said the Clean Fuels America Alliance, an industry group that represents the biodiesel, renewable diesel and sustainable aviation fuel industries. It is unclear how president-elect Donald Trump intends to approach this proposed approach for the 45Z credit, which will be subject to a 90-day public comment period. Trump has promised to "rescind all unspent funds" from the Inflation Reduction Act. But outright repealing 45Z would leave biofuels producers and farmers without a subsidy they say is needed to sustain growth, after the expiration last year of a $1/USG blender tax credit and a tax credit of up to $1.75/USG for sustainable aviation fuel. Biofuel and soybean groups were unsuccessful in a push last year to extend the expiring biofuel tax credits. The 45Z credit is likely to be debated in Congress this year, as Republicans consider repealing parts of the Inflation Reduction Act. House Republicans have already asked for input on revisions to the 45Z credit, signaling they could modify the incentive. In a tightly divided Congress, farm-state lawmakers may hold enough leverage to ensure some type of biofuel incentive — and potentially one friendlier to agricultural producers than 45Z — survives. By Chris Knight and Cole Martin Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Opec+ aims to reverse output falls in 2025

25/01/10

Opec+ aims to reverse output falls in 2025

London, 10 January (Argus) — Opec+ production cuts in 2024 saw the alliance reduce its crude output to lower than even in the pandemic-hit years of 2021 and 2022. And while Opec+ plans to start unwinding some of these cuts this year, it is far from clear that there will be sufficient room in the market for this additional supply. Opec+ members subject to targets reduced crude output by 1.66mn b/d to 33.96mn b/d in 2024, Argus estimates. This was an even bigger decrease than 2023's 1.44mn b/d and means that the alliance has taken 3.1mn b/d off line over the past two years — equal to about 3pc of global oil supply. Saudi Arabia cut production by 650,000 b/d to 8.96mn b/d last year, the lowest since 2010. Russian production fell by 430,000 b/d to 9.15mn b/d, the lowest since at least 2010. Other big falls came from Kuwait, whose output dropped by 190,000 b/d to 2.43mn b/d, and Iraq, where production declined by 160,000 b/d to 4.13mn b/d — although this was still well above its 4mn b/d target. Opec+ can at least claim that it has so far achieved its stated objective of ensuring oil market stability — average prices for Atlantic basin benchmark North Sea Dated in 2024 were only around $2/bl lower than in 2023 at around $80/bl. But this has come at a cost. While Opec+ has capped its output, countries outside the alliance have continued to boost production — eating into Opec+ market share. Whether Opec+ will stick to this approach is a key factor to watch in 2025. Pressure has been building from some members who want to increase output as soon as possible. As things stand, Opec+ members are set to start unwinding 2.2mn b/d of voluntary crude production cuts starting in April over an 18-month period. But this is not certain, given that most forecasts show a market surplus this year. Opec+ continues to stress that the return of 2.2mn b/d — one of three cuts it is implementing — will depend on market conditions. For now, the alliance is in wait-and-see mode, particularly given the uncertainties associated with the return of Donald Trump as US president and its impact on the global economy. As always, the extent to which Opec+ members complied with their individual output targets was a big issue in 2024. But on balance, the alliance's output last year was 40,000 b/d under its collective target. While serial overproducers such as Iraq, Kazakhstan and Russia attracted a lot of scrutiny and pledged to compensate for exceeding their targets, members such as Azerbaijan, South Sudan and Nigeria produced well below their own targets. Without target Another key development in 2024 was growing production from members of the group that do not adhere to targets — Iran, Libya and Venezuela. Iran boosted output by 380,000 b/d to 3.32mn b/d, the highest since 2018, despite the continuation of US sanctions on its oil exports. Similarly, sanctions-hit Venezuela increased production by 110,000 b/d to a six-year high of 870,000 b/d. Libya saw its production fall by 60,000 b/d to 1.11mn b/d — mostly owing to politically motivated shutdowns — but it ended the year at 1.4mn b/d, the highest in over a decade. On a monthly basis, members subject to cuts saw very little change in their collective output in December, with production edging up by 10,000 b/d to 33.57mn b/d. This was 270,000 b/d below the group's target for the month. Notable changes included a 50,000 b/d increase from Nigeria, which saw its output climb to 1.54mn b/d — the highest since July 2020 — while Kuwaiti output increased by 40,000 b/d to 2.44mn b/d. But these increases were almost entirely offset by a drop from the UAE, whose production fell by 120,000 b/d to 2.85mn b/d owing to maintenance at one of its onshore fields. Opec+ crude production mn b/d Dec Nov* Dec target† ± target Opec 9 21.23 21.22 21.23 +0.00 Non-Opec 9 12.34 12.36 12.62 -0.28 Total 33.57 33.58 33.85 -0.28 *revised †includes additional cuts where applicable Opec wellhead production mn b/d Dec Nov* Dec target† ± target Saudi Arabia 8.91 8.93 8.98 -0.07 Iraq 3.99 3.98 4.00 -0.01 Kuwait 2.44 2.40 2.41 +0.03 UAE 2.85 2.97 2.91 -0.06 Algeria 0.91 0.91 0.91 0.00 Nigeria 1.55 1.50 1.50 +0.05 Congo (Brazzaville) 0.27 0.25 0.28 -0.01 Gabon 0.24 0.22 0.17 +0.07 Equatorial Guinea 0.07 0.06 0.07 +0.00 Opec 9 21.23 21.22 21.23 +0.00 Iran 3.40 3.36 na na Libya 1.31 1.24 na na Venezuela 0.90 0.88 na na Total Opec 12^ 26.84 26.70 na na *revised †includes additional cuts where applicable ^Iran, Libya and Venezuela are exempt from production targets Non-Opec crude production mn b/d Dec Nov* Dec target† ± target Russia 8.97 8.97 8.98 -0.01 Oman 0.75 0.75 0.76 -0.01 Azerbaijan 0.48 0.49 0.55 -0.07 Kazakhstan 1.44 1.45 1.47 -0.03 Malaysia 0.36 0.36 0.40 -0.04 Bahrain 0.18 0.18 0.20 -0.02 Brunei 0.08 0.08 0.08 -0.00 Sudan 0.02 0.02 0.06 -0.04 South Sudan 0.06 0.06 0.12 -0.06 Total non-Opec 12.34 12.36 12.62 -0.28 *revised †includes additional cuts where applicable Opec+ crude production* Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Next Canadian PM to be chosen on 9 March

25/01/10

Next Canadian PM to be chosen on 9 March

Calgary, 10 January (Argus) — Canada's next prime minister will be chosen on 9 March after a leadership race among the governing Liberals, the party announced late 9 January. Prime minister Justin Trudeau announced on 6 January that he would resign from his roles as head of the federal government and party but stay on until a successor was found. Canada's governor general, at Trudeau's request, delayed a return to Parliament by two months, buying his party time before elected officials return to session, now scheduled for 24 March. Opposition parties have vowed to bring down the government and trigger a general election at first opportunity, prompting the Liberals to expedite the leadership race. With the process now set, candidates will need to declare their participation by 23 January. At least two high profile Liberal cabinet members have said they are not planning to run for the top job. Minister of foreign affairs Mélanie Joly and minister of finance and intergovernmental affairs Dominic LeBlanc both said the threat of tariffs and economic pressures from US president-elect Donald Trump require their full attention at their current posts. Recent polls indicate the centre-right Conservatives would win a majority of seats in the House of Commons if an election were held today, ending the Liberal's reign that began in 2015. Conservative leader Pierre Poilievre has focused efforts on criticising potential Liberal leadership candidates, leaning into their connection to Trudeau, the state of immigration and the Canadian economy, and the carbon tax. This includes Trudeau's former finance minister Chrystia Freeland; the Liberal's chair of economic growth Mark Carney who is a former governor of both the Bank of Canada and Bank of England; and former British Columbia premier Christy Clark. "They're all Justin Trudeau. They're all just like Justin," said Poilievre on 9 January. By Brett Holmes Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Maduro claims Venezuelan presidency, sanctions build

25/01/10

Maduro claims Venezuelan presidency, sanctions build

Caracas, 10 January (Argus) — Nicolas Maduro took the oath of office for a third term as Venezuela's president today in a small ceremony, prompting more condemnation from countries that reject his claim to the title. Cuban president Miguel Diaz-Canel arrived in Venezuela ahead of the 45-minute ceremony, held in a side room at the national assembly. Maduro promised a "term of peace" in brief comments. Only state media was allowed to film the event, which was much smaller than his past two inaugurations. Opposition leader Edmundo Gonzalez, who has international support for his claim that he won the July presidential election, had said he would try to enter Venezuela from forced exile to claim the office. The outgoing administration of President Joe Biden marked Maduro's inauguration by upping the bounty on him to $25mn, related to a criminal case filed by US federal prosecutors for the Venezuelan leader's alleged involved in drug trafficking. "It is clear to the Venezuelan people, the United States and most of the world that Edmundo Gonzalez should be sworn in today as Venezuela's next president," a senior US official said. But the Biden administration will not formally recognize Gonzalez as his country's legitimate leader — a decision that could have given him a say in managing some of Venezuela's foreign assets, including in the US. "At this juncture, the US currently recognizes the democratically elected 2015 National Assembly as a legitimate government of Venezuela," the US official said. The US also imposed sanctions on PdV president Hector Andres Obregon — another complication for PdV's foreign partners. To constrain foreign revenue sources for Maduro's government, the US administration would continue to approve requests to seize Venezuelan sovereign assets in foreign countries to satisfy Caracas' debts, the US official said. The most prominent of those cases is moving through a US federal court in Delaware, where Venezuela's creditors are close to finalizing the sale of PdV-owned US refiner Citgo. But the Biden administration is not looking to revoke a license it granted in 2022, allowing Chevron to import into the US cargoes of oil produced in its joint venture with PdV — some 200,000 b/d last year. Chevron's authorization "is a policy that we have been reviewing here at the highest levels for some time," the US official said. "One of the things that has driven our policy all along is a commitment to use strategic pressure on Maduro and his authorities when that is appropriate and will have proportionate impact." The Biden team has held discussions with the incoming administration of president-elect Donald Trump on Venezuela, the official said. "Depending on the events that we see unfold in the next 10 days, we are ready to make a set of recommendations to the incoming administration with respect to the future of" licenses granted to Chevron and for some other foreign companies to operate in Venezuela. Terms of peace The inauguration drew other international actions. Israel recognized Gonzalez as president of Venezuela today, describing Maduro as an "ally of Iran", adding its name to the long list of countries that do not recognize Maduro as president. The EU also announced it was sanctioning another 15 Venezuelan nationals, including supreme court head magistrate Caryslia Rodriguez, who attended the ceremony today. There are now 70 Venezuelans, including military and civilian, present and former officials, under EU sanction. Venezuela's response to the condemnation has been to increase military and policy control in Caracas, arrest protesters and threaten to "neutralize" any aircraft carrying Gonzalez in its airspace. Opposition leader Maria Corina Machado was also briefly held on Thursday after emerging from several months of hiding to lead an anti-Maduro rally, her allies said. By Carlos Camacho and Haik Gugarats Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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