Oil and Gas Markets: US oil industry appears on the verge of significantly ramping up activity in response to higher oil and gas prices.  Chevron is reportedly on track to boost output from the USA's largest oil producting region, the Permian Basin, by 15% in 2022.

Russian Oil and Gas Exports: One of the largest power utility companies in Germany, and one of its largest importers of Russian gas, is moving to comply with the payment scheme specified by Russia to keep receiving natural gas.

Russian Oil and Gas Exports: Great Britain now believes it can wean itself off Russian gas sooner than recently projected.

Russian Oil and Gas Exports: The Guardian estimates that Russian revenue from fossil fuel exports have doubled since it invaded the Ukraine.

Russian Oil and Gas Exports: Italy is considering nationalizing Lukoil's ISAB refinery, Italy's largest, as punishment for Russia's invasion of the Ukraine.

Russian Oil and Gas Exports: Per this reports, Europeans are already using roubles to pay for Russia for natural gas.  More expected as gas shutoffs to Poland and Bulgaria demonstrate Russian intent.

Russian Oil and Gas Exports: Germany's Economy Minister is now suggesting that a full ban on importing Russian oil is possible within a matter of days.

Russian Oil and Gas Exports: It is now being reported that Russia will halt natural gas exports to Poland on Wednesday (27th) unless payment is forthcoming in rubles.

Russian Oil and Gas Exports: Europe is still working to figure out the optimal near term structure of sanctions that maximize impact on Russia, while impacting the impact on users in Europe.

Russian Oil and Gas Exports: Europe has set a target of the end of 2027 to end its import dependence on Russian oil and gas.

Oil and Gas Markets: Biden administration continues to throttle the domestic US oil and gas industry by restricting access to highly prospective acreage, in this case on Alaska's North Slope.

Russian Oil and Gas Exports: Reports are emerging that the Russians are signaling that they intend to take control of all of the southern Ukraine along the Black Sea coast. This puts Odessa and perhaps Moldova at risk, and suggest a longer, wider war with all that implies for global energy markets.

Russian Oil and Gas Exports: EU High Representative for Foreign Affairs and Security Policy Josep Borrell recently stated, "It will be very hard [to reach consent on embargoing Russian oil deliveries or raising tariffs], because some member states have already announced they would veto any collective decision"

Russian Oil and Gas Exports: Treasury Secretary Yellin says, "we need to be careful when we think about a complete European ban on, say, oil imports."  She is essentially arguing that such a ban may cause more harm than good.

Russian Oil and Gas Exports: Russian oil exports are down 25% in the week of April 15.

Russian Oil and Gas Exports: Business and Union leaders in Germany oppose immediately discontinuing imports of Russian oil and gas.

Russian Oil and Gas Exports: The Russian Deputy Prime Minister indicates several countries have committed to paying for natural gas with roubles.

Oil and Gas Markets: US Interior department said it planned to lease as much as 145,000 acres of land for oil and gas development in the western US.  This relatively small effort represents the first sale of oil and gas leases since Biden took office, and breaks a core campaign pledge that Biden made when he told voters in February 2020 in New Hampshire, "And by the way, no more drilling on federal lands, period.  Period, period, period."

Oil and Gas Markets: Per the latest BHI activity report, US rig count increased by 4 rigs, with the number of rigs drilling horizontal wells up by 5 (offset by 1 less rig drilling in inland waters) :
  US Drilling Activity Map:  Where the rigs are drilling.
  Number of US rigs drilling as of latest report.
  US oil and gas drilling activity summary.

Oil and Gas Markets: Large Chinese companies are starting to withdraw from western markets for fear of being sanctioned by western governments and banking systems.

Russian Oil and Gas Exports: Willingness of buyers in India to purchase heavily discounted Russian crude oil may undermine much of the sting of a European oil embargo on Russia.

Russian Oil and Gas Exports: The EU is considering putting in place a full oil embargo against Russia starting in late April or early May.

Russian Oil and Gas Exports: The BBC is quoting a former Russian economic advisor as saying that a full embargo of Russian oil and gas would quickly end the Ukrainian war.

Oil and Gas Markets: EIA today reported higher US oil inventories,  flat US oil production, and reduced implied demand.

Russian Oil and Gas Exports: According to Energy Minister Nikolay Shulginov Russia is ready to make a deal for its oil at any price, as long as the buyer is a friendly country.

Russian Oil and Gas Exports: OPEC tells Europeans that it cannot replace Russian oil.

Oil and Gas Markets: OPEC continues to underperform.  It increased projection by only 57 mbopd in March, which was well below a planned increase of approx. 200 mbopd.

Ukraine Oil and Gas: US warns India against importing more Russian oil and gas.

Oil and Gas Markets: Concerns over China lockdowns destroying oil demand are outweighing concerns over Russian oil supply shortfalls and leading to lower prices.

Ukraine Oil and Gas: India and China continue to purchase Russian crude oil, providing an important source of hard currency.

Oil and Gas Markets: Per the latest BHI activity report, US rig count jumped by 16 rigs, with the number of rigs drilling horizontal wells up by 18 (offset by 2 fewer offshore rigs) :
  US Drilling Activity Map:  Where the rigs are drilling.
  Number of US rigs drilling as of latest report.
  US oil and gas drilling activity summary.

Oil and Gas Markets: According to Nigeria's state minister for petroleum resources, OPEC is out of spare capacity.

Ukraine Oil and Gas: Russian forces appear to be systematically destroying Ukrainian oil, diesel, and gasoline production and storage installations with the goal of hindering the Ukrainian war effort.

Oil and Gas Markets: Oil prices fell 5% yesterday due to a combination of higher US oil inventories, resumption of 1.2 mmbopd of CPC exports from Novorossiysk, increasing US oil production, and IEA announcing release of 60 mmbo from national SPR's in addition to the previously annonced 180 mmbo release from the US SPR.

Oil and Gas Markets: The IEA agrees to release 120 mmbo from member strategic reserves.  This includes 60 mmbo from the previously announced 180 mmbo release from US oil stockpiles.

Oil and Gas Markets: US oil inventories increased, and implied gasoline demand decreased, suggesting reduced demand for crude.  Weekly US petroleum status summary with oil and oil product prices;  US Oil Inventory trends and current status

Russian Oil and Gas Exports: Hungary agrees to pay rubles for Russian natural gas, if asked to do so.

Russian Oil and Gas Exports: Oil exports of about 1.2 mmbopd have resumed from the CPC export facility at Novorossiysk.

Russian Oil and Gas Exports: It appears that a number of large Russian LNG projects previousuly ontrack to start operations in the second half of this decade are now at risk of not moving forward.
    Russian LNG Project Schedule Preinvasion of the Ukraine
    Russian LNG Project Schedule Postinvasion of the Ukraine

Iran Nuclear Talks: The negotiations to reinstitute JCOPA have been suspended with Iran essentially telling the US to take the deal that is on the table or leave it.  Given this state of affairs, it is unclear when incremental Iranian barrels might enter the market.

Russian Oil and Gas Exports: European Union encourages its citizens to turn down the thermostat in the face of the sanction induced, energy crisis in Europe.

Oil and Gas Markets: Despite the obvious short and medium term need for more oil, especially given the indeterminate duration of Russian sanctions, the Biden admin. still resists issuing new oil and gas leases and approving new pipelilnes from Canada.

Russian Oil and Gas Exports: European Union is considering a ban on coal imports from Russia in retaliation for the atrocities perpetrated by Russian troops in the Ukraine.

Oil and Gas Markets: Per Baker Hughes, as of last Friday, US oil and gas drilling activity was  275% its level of 20 months ago.  We believe this represents the fastest pace of increase ever in US oil and gas rig count:
  US oil and gas drilling activity summary.
  US Drilling Activity Map:  Where the rigs are drilling.
  Number of US rigs drilling as of latest report.

Russian Oil and Gas Exports:Reports are surfacing that indicate Russian oil production declined in March compared to February.

Oil and Gas Markets: Weekly US petroleum status summary with oil and oil product prices:
   US Oil Inventory trends and current status
   US Gasoline Inventory trends and current status; evidence of demand destruction
   US Diesel Inventory trends and current status
   US Cushing Inventory trends and current status

Oil and Gas Markets: News of 1 mmbopd from US SPR, helps send oil prices down below $100/day.

Russian Oil and Gas Exports: India and China are purchasing large volumes of deeply discounted Russian oil.  The discounts can be as much as 35% and can be paid for with either dollars, yuan or rupees.

Russian Oil and Gas Exports:Poland is planning to halt imporation of Russian coal and oil by the end of 2022.

Russian Oil and Gas Exports: It is being reported that Russia has halted gas exports to Europe via  the important Yamal-Europe line, which transits Belarus north of the Ukraine (see map to left).  Reuters is reporting eastward flow as of Friday, April 1, but unclear if this situation has continued thru the weekend.

International Finance: The IMF, in an interview with the Financial Times, is suggesting that sanctions on Russia could lead to emergence of other reserve currencies, partially displacing the US petrodollar.

Oil and Gas Markets: Elevated gasoline prices are negatively impacting US retail foot traffic and, presumably retail spend, at least, according to Placer.Ai.

Russian Oil and Gas Exports: CEO's of both Siemens and BASF warn of the severe economic impact on Germany that would result if Russian natural gas were to stop flowing into Germany.

Russian Oil and Gas Exports: GAZPROM, the Russian company supplying Europe with natural gas, has issued instructions to Europian customers how to pay for Russian gas imports in rubles.

Russian Oil and Gas Exports:Update: As previously noted, India/Russia were evaluating using a Russian based SWIFT alternative to facilitate bilateral trade, including ruble based purchases of discounted Russian oil.  It is now being reported that the alternative has been finalized and likely will be operational between the two countries within the next week.

Russian Oil and Gas Exports: Putin said he signed decree that natural gas exports to "unfriendly" countries must be paid for in rubles starting Friday, April 1. As a result, the ruble has rallied to preinvasion levels.

Russian Oil and Gas Exports: In anticipation of Russian imports of gas being reduced due to Europeans refusing to pay for natural gas with rubles, the Netherlands has asked its citizens to reduce consumption of natural gas.

Russian Oil and Gas Exports: The India/Russia plan to use the Russian based SWIFT alternative to facilitate bilateral trade, including ruble based purchases of discounted Russian oil, is currently being considered by Indian government.

Russian Oil and Gas Exports: OPEC+ at its latest supply meeting (March 31), agreed not to change "return-to-market" plan, which means an additional 432 mbopd as of May.  WIthin this plan, Russia is expected to produce 10.55 mmbopd.  This compares to 10.23 mmbopd at the time Russia invaded the Ukraine.

Oil and Gas Markets: The Biden administration is considering releasing as much as 1 mmbopd from the SPR in a bid to lower oil prices from current multiyear highs.

Oil and Gas Markets: EIA confirmed the draw down in crude inventories reported by API yesterday: Inventory status of US crude and main products are as follows:.
   US Oil Inventory trends and current status
   US Gasoline Inventory trends and current status; evidence of demand destruction
   US Diesel Inventory trends and current status
   US Cushing Inventory trends and current status

Iran Nuclear Talks: Iran and Russia are being blamed for holding up an agreement to reinstitute JCPOA and remove sanctions on Iranian oil production.  "No end" in sight. Iran is blaming excessive US demands.

Russian Oil and Gas Exports: Germany is preparing to institute natural gas rationing across the country rather than pay roubles for Russian natural gas.If Germany loses access to Russian natural gas, it could result in the largest energy shock in Europe since the oil embargo of 1973.

Russian Oil and Gas Exports: It is unrealistic to expect that European imports of Russian gas can be replaced in the short-to-medium term. Natural gas requires extensive infrastructure to transport via either pipelines or LNG, which is expensive and time consuming to put in place.

Oil and Gas Markets: API reported across the board inventory draws in the US, with lower stock levels listed for crude, gasoline, jetkerro, distillate (diesel), Cushing.

Ukrainian War Update: Russia indicates it will reorient its troops away from Kyiv, and is open to a Putin/Zelevsky meeting. WTI fell below $100/bbl on the news.

Russian Oil and Gas Exports: In addition to concerns about oil demand destruction in China, oil prices are down on reports from the ongoing Russia/Ukraine talks that Russia may be moderating some of its demands.

Global Oil Demand:  OIl prices fell by as much as $9.00/bbl on news that Shangahi is imposing a COVID related lockdown for half the city.

Russian Oil and Gas Exports: Russia has set March 31st as the deadline for pricing natural gas sales to "hostile" countries in roubles.

Russian Oil and Gas Exports: Reduction in exports of Russian diesel to Europe raises the prospect of rationing of this important supply chain fuel

Russian Oil and Gas Exports: Russia has set March 31st as the deadline for pricing natural gas sales to "hostile" countries in roubles.

Russian Oil and Gas Exports: Reduction in exports of Russian diesel to Europe raises the prospect of rationing of this important supply chain fuel

Russian Oil and Gas Industry: Sinopec is pulling back on at least some of the Russian investments it was considering due to concerns of being ensnared by US sanctions.

Non Russian Oil Supply:  The Houthi are ramping up attacks on systemically important Saudi Arabian oil and gas infrastructure, with 2 major drone attacks in the last week.  The second attack resulted in substantial damage to oil distribution facilities in Jeddah. Notably the second attack also attempted a drone strike on the oil export facilities at Ras Tanura, arguably one of the  most important oil installations in the world.  No word on damage at RT.

Satellite image of Ras Tanura

Non Russian Oil Supply:  US oil and gas activity in the form of rig count increased by 7 to 670 rigs according to the BHI index. This is up from 586 rigs "turning to the right" at the end of 2021.

Russian Oil and Gas Exports: Russian nat gas exports continue to transit the Ukraine at normal to higher volumes.  Lower than expected power generatoin from European wind turbines at driving increases in transits.

Russian Oil and Gas Exports: US agrees with Europe to increase LNG shipments to Europe to reduce dependence on Russian nat gas.

Russian Oil and Gas Exports: In a bid to support the rouble, Russia to demand payment in roubles for gas exports to Europe.

Russian Oil and Gas Exports: OPEC is suggesting that a ban on sales of Russian oil will hurt energy consumers globally, including in Europe and North America.

Russian Oil and Gas Exports: Diesel and gasoline "stock outs" are being reported in Europe. CEO of Trafigura expect, shortages to spread. Look below for graph showing US diesel inventories at multiyear lows.

Russian Oil and Gas Exports: Oil exports of approximately 1 million barrels per day out of Kazakhstan may be disrupted for 2 months or longer due to problems at the Russian export facility at Novorossiysk.