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The United States imposed sanctions on companies it accused of involvement in Iran's petrochemical and petroleum trade, including five based in China, pressuring Tehran as it seeks to revive the 2015 Iran nuclear deal, said Reuters.
Washington has increasingly targeted Chinese companies over the export of Iran's petrochemicals as the prospects of reviving the nuclear pact have dimmed. Indirect talks on the accord, formally known as the Joint Comprehensive Plan of Action (JCPOA), have broken down. "So long as Iran refuses a mutual return to full implementation of the Joint Comprehensive Plan of Action, the United States will continue to enforce its sanctions on the sale of Iranian petroleum and petrochemical products," the Treasury's Under Secretary for Terrorism and Financial Intelligence Brian Nelson said in a statement.
The Iranian mission to the United Nations in New York did not immediately respond to a request for comment. U.S. Secretary of State Antony Blinken said in a separate statement that the State Department designated two China-based companies, Zhonggu Storage and Transportation Co Ltd and WS Shipping Co Ltd.
Blinken accused Zhonggu Storage and Transportation Co Ltd of operating a commercial crude oil storage facility for Iranian petroleum and WS Shipping Co Ltd of being a ship manager for a vessel that has transported Iranian petroleum products. Reuters could not immediately reach the two companies for comment.
The U.S. Treasury Department also slapped sanctions on a network of companies involved in what it said was the sale of hundreds of millions of dollars worth of Iranian petrochemical and petroleum products to South and East Asia.
The action targeted Iranian brokers and front companies in the United Arab Emirates, Hong Kong and India, the Treasury said. Washington warned that it would continue to accelerate enforcement of sanctions on Iran's petroleum and petrochemical sales so long as Tehran continues to accelerate its nuclear program.
The 2015 nuclear agreement limited Iran’s uranium enrichment activity to make it harder for Tehran to develop nuclear arms, in return for lifting international sanctions. But then-U.S. President Donald Trump ditched the deal in 2018, saying it did not do enough to curb Iran’s nuclear activities, ballistic missile program and regional influence, and reimposed sanctions that have crippled Iran’s economy.
"These enforcement actions will continue on a regular basis, with an aim to severely restrict Iran’s oil and petrochemical exports," Blinken said. Anyone involved in such sales and transactions should stop immediately if they wish to avoid being subjected to U.S. sanctions, he said.
As part of Thursday's action, the Treasury targeted several companies it accused of dealing with Hong Kong-based Triliance Petrochemical Co Ltd, which has previously been sanctioned by the United States. It said India-based petrochemical company Tibalaji Petrochem Private Limited purchased millions of dollars worth of Triliance-brokered products for onward shipment to China.
The Treasury also accused UAE-based Clara Shipping LLC of being paid millions of dollars by Triliance - through front companies - in freight charges for the shipment of Iranian petrochemical and petroleum products to East Asia. Also designated over dealings with Triliance was Iran-based Iran Chemical Industries Investment Company and Middle East Kimiya Pars Co, Hong Kong-based Sierra Vista Trading Limited, and UAE-based Virgo Marine.
Hong Kong-based Sophychem HK Limited and ML Holding Group Limited were designated for dealings with U.S.-designated Persian Gulf Petrochemical Industries Commercial Company, including the purchase of Iranian petrochemicals for shipment to China and Singapore.
We remind, bp laid off most contractors at the approximately 160,000 barrel-per-day Toledo, Ohio, refinery it owns with Cenovus Energy Inc, according to sources familiar with the matter, indicating that the plant will experience a prolonged shutdown following last week's explosion and fire. The explosion killed two United Steelworkers members, identified as brothers Max and Ben Morrissey. The more than 100-year-old refinery has been offline since the middle of last week following the explosion and could be shut for several months.
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U.S. imposes new sanctions on Iran oil exports, targets Chinese firms
Federal government may fund hydrogen project at BASF
The European Commission has approved, under EU State aid rules, a EUR134 million German measure to support BASF SE (‘BASF’) in the production of renewable hydrogen, with the aims of decarbonising its chemical production processes and of promoting hydrogen use in the transport sector, said the company.
The measure contributes to the achievement of the EU Hydrogen Strategy and the European Green Deal targets, while helping reduce dependence on Russian fossil fuels and fast forward the green transition in line with the REPowerEU Plan.
Today’s decision follows the approvals on 15 July 2022 and on 21 September 2022 of two Important Projects of Common European Interest (IPCEI ‘Hy2Tech’ and IPCEI ‘Hy2Use’) in the hydrogen value chain. BASF’s project was selected by Germany in the context of an open call to form part of an IPCEI on hydrogen technologies and systems, which resulted in the two approved IPCEIs. However, given its characteristics and objectives, it was better suited for assessment under the Guidelines on State aid for climate, environmental protection and energy 2022.
Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “This €134 million measure enables Germany to help BASF step up its renewable hydrogen production capacities, thereby contributing to the greening of the chemical value chain and of the transport sector. The measure approved today will also help Germany replace fossil-based hydrogen in a hard-to-decarbonise industry, and reduce its dependence on imported fossil fuels, in line with the REPowerEU Plan."
The measure will support BASF’s production of renewable hydrogen mainly to replace fossil-based hydrogen in BASF’s chemical production processes. Additional renewable hydrogen produced will be delivered for emerging hydrogen mobility applications (e.g. hydrogen-powered trucks or buses).
The aid, which will take the form of a direct grant, will support the construction and installation of a large-scale electrolyser at BASF’s Ludwigshafen site, which will have an annual production capacity of 54 MW and produce approximately 5,000 tonnes of renewable hydrogen and 40,000 tonnes of oxygen per year. The electrolyser is envisaged to start operating in 2025
The project is expected to avoid the release of 565,305 tonnes of carbon dioxide over the 15 years of expected operation of the electrolyser. In addition, to maximise the reduction of greenhouse gas emissions, renewable hydrogen will be produced solely with electricity stemming from renewable sources.
We remind, Fluor Corporation announced that the company was awarded two reimbursable engineering, procurement and construction management contracts by BASF for the ethylene oxide/ethylene glycol and infrastructure, offsites and utilities packages as part of the company’s new Verbund program in Zhanjiang, Guangdong province, China.
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Atlas Copco has acquired a distributor of compressors in New Mexico, USA
Atlas Copco has acquired the operating assets of the compressor business of Mesa Equipment & Supply Company (Mesa), said Hydrocarbonprocessng.
Mesa is located in Albuquerque, New Mexico, USA, and 19 employees will join Atlas Copco. The company sells oil-free and oil injected compressors, and offers parts and service, across a broad range of customer segments.
“Mesa has built a strong sales and service presence in the area,” said Vagner Rego, Business Area President Compressor Technique. “This acquisition is in line with our strategy to grow our geographic coverage and get closer to our customers, and also brings increased service opportunities.
We remind, Atlas Copco has agreed to acquire National Vacuum Equipment Inc., a leading local US manufacturer of industrial vacuum pumps and packages for mobile use on tanker trucks. National Vacuum Equipment Inc. is headquartered in Traverse City, Michigan, USA and has around 100 employees. “The acquisition will add to our vacuum solutions portfolio, allowing us to enter the currently untapped mobile vacuum market,’’ said Geert Follens, Business Area President Vacuum Technique.
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French refinery strikes are timed to hit hard
A walkout by hard-left CGT trade union members at TotalEnergies has disrupted operations at two refineries and two storage facilities, and two Exxon Mobil refineries have faced similar problems since Sept 20.
The week-long strike at TotalEnergies is part of broader action across the French energy sector as workers push for higher pay to counter inflation.
The strikes have shut down production at TotalEnergies' 240,000 bpd Gonfreville refinery and blocked deliveries at its 119,000 bpd Feyzin refinery, which was already offline following a leak.
The outages have increased the impact of what is known as the maintenance season in Europe, which takes place after the peak of gasoline consumption in the summer driving season and before winter heating demand.
Some 1.5 million bpd are expected to be offline across Europe in October, tightening already-strained supplies, particularly of middle distillates. Middle distillates such as diesel and gas oil are primarily used in freight transport, manufacturing, farming, mining, and oil and gas extraction.
"(The strikes come) at exactly the wrong time, global middle distillate onshore stocks are pretty tight... and increasing that deficit will send prices higher," Eugene Lindell, refining and products market analyst at FGE, said.
France has enough strategic reserves of oil products to cover average demand for about three months, the UFIP petroleum industry body estimates.
TotalEnergies said it had increased imports and had stocks "that could last between 20 days and a month," in addition to the strategic stocks held by France. Some TotalEnergies fuel stations have run dry in recent days, including in areas surrounding refineries and fuel depots.
The energy group said that was because a price cut introduced on Sept. 1 to help customers deal with inflation had resulted in a sharp increase in sales. Analysts do not expect widespread shortages at pumps but the refinery outages are reducing already-low stock levels.
France's diesel inventories stood at 60 million barrels in June, almost 15 million below the five-year average for that month, according to Energy Aspects. "We have downgraded our estimations of stocks in the region by 4 million barrels for both September and October," said James Burleigh at Wood Mackenzie.
France usually imports about 50% of its diesel needs yearly. Imports generally increase going into the fourth quarter due to refinery maintenance schedules. But in the week to Oct. 2, imports of oil products rose 40% week-on-week to cover the production shortfall caused by the strike, data from energy analytics firm Vortexa showed.
French suppliers are buying diesel cargoes on a ship-to-ship transfer basis from record numbers of Very Large Crude Carriers (VLCCs) coming into Europe, Wood Mackenzie said.
Uncertainty over how long the French strikes will last has lifted European diesel spreads relative to crude <ULSD10-B-ARA> just as Western sanctions against Russia are driving prices still higher. The European Union is trying to source around 600,000 bpd of diesel to replace Russian fuel ahead of a February ban.
Early indications show that growing volumes of diesel from the Middle East are pointed toward Europe, Vortexa senior market analyst Pamela Munger said. Meanwhile, lower-than-normal French nuclear output may also spur diesel demand in France.
We remind, More than 60% of France's refining capacity is offline as strikes over pay and unplanned maintenance pile pressure on the refined products sector. The outages come as Europe looks to ease its dependence on Russian fuel. Here are the oil companies and sites affected by strike action and outages: French unions CGT and Force Ouvriere called for a strike on Sept. 20 following wage negotiations with Exxon Mobil Corp related to rising inflatio
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Europe braces for heavy oil refinery outages amid tight supplies
A heavy oil refinery turnaround season in Europe this autumn, plus French strike action, is set to push diesel prices higher and tighten supplies ahead of a European Union ban on Russian refined products which is due to come into force early next year, said Reuters.
In October, around 1.5 MMbpd of crude refining capacity is expected to be offline in Europe for planned and unplanned maintenance, Energy Aspect estimated. This figure compares with 1.1 MMbpd of offline capacity in September, and is above the 2015-2019 average for this period. In November, offline capacity is expected to reach 600,000 bpd.
The busier maintenance schedule is likely to be related to the COVID-19 pandemic. "Given all the Covid-related restrictions, social distancing etc, it's likely that not a lot of extensive works were actually carried out but rather just essential maintenance," Energy Aspect's Livia Gallarati said. Maintenance outages next month include Eni's Sannazzaro refinery in Italy, Repsol's Tarragona refinery in Spain, and Galp Energia's Sines refinery, among others.
"The European diesel market is looking a bit softer than we had expected say this time last month," Gallarati said, adding that the consultancy has softened its European demand forecast as economic pressures mount. Europe has also been upping its diesel imports from other regions like the Middle East and Asia, with September arrivals hitting a three-year high of 1.6 million barrels per day, based on data from oil analytics firm Vortexa.
But while higher imports and a softening demand outlook are helping to ease the pressure on diesel markets, widespread refinery outages in France, partly due to strike action, could tighten supplies again. One European trader said that while the market has priced in, and to a large extent prepared for the planned outages, it is the unplanned outages that could cause problems for the oil products market.
"The issue is unexpected outages like the French strikes," he said. Walkouts over pay and unplanned maintenance have resulted the temporary shutdown of four out France's six oil refineries in the week to 28 September. This has taken offline 740,000 bpd, or over 60% of France's refining capacity.
Exxon Mobil, which operates two of the shut plants, told Reuters it had temporarily put limitations in place for customers, saying this was in accordance with the terms of its supply contracts. Benchmark European diesel profit margins hit a two-week high of about USD50 a barrel on Wednesday, based on Reuters assessments, driven by the French strikes.
Analysts expect the shutdowns to tighten refined product supply if they drag on. "The wave of strikes in France took the market by surprise and there is uncertainty about its duration," OilX analyst Neil Crosby said. "Overall, we remain constructive diesel cracks come Q12023 as the market will struggle to replace lost Russian supplies," Gallarti said, adding that Europe stands to lose 500,000-600,000 bpd of Russian diesel due to sanctions.
The European Union will stop buying all Russian crude oil delivered by sea from early December, and will ban all Russian refined products two months later, in protest over Moscow's invasion of Ukraine. "We struggle to see stocks building massively from where we are," Woodmac analyst Mark Williams said.
We remind, strike action has reduced output at Exxon Mobil’s 240,000 barrel per day (bpd) Port Jerome-Gravenchon oil refinery and Notre Dame de Gravenchon (NDG) petrochemical site in France. French unions CGT and Force Ouvriere called for a strike at the plants on the evening of Sept. 20. This followed wage negotiations with Exxon Mobil related to growing inflation in Europe.
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