Oil market volatility benefits no one, OPEC+ supports stable supply, investments

Oil market volatility benefits no one, and OPEC+ supports stable market development, demand growth and the security of supply, Russian Deputy Prime Minister Alexander Novak said at the 2025 St. Petersburg International Economic Forum (SPIEF 2025), as per Interfax.

When asked by the moderator whether Russia would cooperate with Saudi Arabia to secure the market if Iranian oil were to exit it, Saudi Energy Minister Prince Abdulaziz bin Salman said, "You're asking about something that isn't happening in the market."

"We can only react to reality," he said. OPEC+ has always been a reliable, serious and effective organization that closely monitors market developments, and Russia and Saudi Arabia are just two members of a broader alliance and cannot speak for all, he said.

For his part, Novak expressed hope that the situation in the Middle East will stabilize. "We need to observe how events unfold. Ideally, the situation should stabilize - market volatility benefits no one. We support stable development, demand growth, and secure market supply. This ensures investment stability, enables economic growth for oil-producing nations and facilitates technological advancement," he said.

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Yamal LNG produced over 21 million tonnes of liquefied natural gas in 2024, Novatek reported at its stand at the St. Petersburg International Economic Forum (SPIEF) 2025, as per Interfax.

The Federal State Statistics Service (Rosstat) had previously reported that 34.7 million tonnes of LNG were produced in Russia last year. Sakhalin Energy LLC shipped 10.2 million tonnes.

Most of the liquefied natural gas in Russia is produced in the Arctic zone, with production most efficient at subzero winter temperatures.

The Sakhalin Energy plants, co-owned by Gazprom and Japan's Mitsui and Mitsubishi; Yamal LNG, whose participants are Novatek and TotalEnergies ; China National Petroleum Corporation (CNPC) and SRF; Cryogas-Vysotsk; and Gazprom LNG Portovaya produce large-scale LNG in Russia.

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Versalis SpA, the chemicals business of Eni Spa, said it is in the design phase for a 40,000 metric tons per year plant planned to be built at Priolo, Italy, for the chemical recycling of mixed waste plastics, as per Chemweek.

The company, which announced June 19 it had successfully completed initial production tests at a demonstration chemical recycling plant in Mantua, Italy, with a nameplate processing capacity of 6,000 metric tons per year of secondary raw materials, said it has already completed a feasibility study for the larger project.

Versalis said the design phase for the larger plant at Priolo is under way “in preparation for the start of the permitting process.” A scheduled startup and investment amount for the project were not given.

The demo project is based on Versalis’ proprietary Hoop recycling technology, which converts the mixed waste polymers into feedstock for reuse in the production of new plastics. The pyrolysis process was developed via a joint project of Versalis with Italian engineering firm Servizi di Ricerche e Sviluppo (SRS).

Construction of the demo plant at Mantua began in late October 2023 after the project was first announced in February 2020, with production originally scheduled to start by the end of 2024.

In April, Versalis announced it had implemented the permanent closure in March of its naphtha cracker at Brindisi, Italy, and that its last remaining steam cracker in the country at Priolo would close before the end of the year.

The cracker closures are in line with Eni’s plans announced in October last year for a €2 billion transformation and decarbonization program for its chemicals business aimed at restoring its competitiveness and returning it to profitability.

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Chinese domestic low-density polyethylene (LDPE) prices surged Yuan 550 per metric ton ($76.64 per metric ton) on June 18, driven by fears surrounding the Iran-Israel conflict. This marked the steepest week-over-week rise since October 2024, as per Chemweek.

Platts, part of S&P Global Commodity Insights, assessed Chinese domestic LDPE at Yuan 9,800 per metric ton ex-works East China on June 18, based on tradable indications of Yuan 9,800-10,000 per metric ton.

Sources attributed the increase to concerns over potential disruptions in Iranian polyethylene (PE) supply, while domestic supply from local Chinese producers remained largely stable.

”Iran accounts for a significant portion of LDPE supply into China, so the Iran-Israel situation has affected domestic LDPE prices significantly,” a trader said.

China Customs Statistics showed Iran was the top supplier of LDPE to China in 2024, with 552,940 metric tons, followed by the UAE at 516,271 metric tons and the US at 461,306 metric tons. From January to April 2025, Iran ranked as the third-largest supplier, delivering 151,954 metric tons. The UAE led with 223,514 metric tons, followed by the US at 199,795 metric tons.

Market participants expect Iranian supply to tighten from mid-July due to the shutdown of several Iranian PE plants amid the ongoing conflict. Traders and end-users are also refraining from purchasing Iranian LDPE cargoes due to geopolitical uncertainty.

“No one dares to purchase goods from Iran now. Everyone is worried that once the deal is closed and paid for, the supplier could be affected by the war, and the goods might not arrive,” a trader said.

This was the sharpest price surge for domestic Chinese LDPE since Oct. 9, 2024, when the country’s government announced economic stimulus measures to boost its struggling economy. During that period, domestic and CFR-traded prices rose alongside rising futures prices and improved market sentiment. Tight import and domestic supply due to plant maintenance also contributed to the week-over-week increase of Yuan 650 per metric ton ($90.70) from Oct. 2 to Oct. 9, 2024.

Market participants are currently closely monitoring the Iran-Israel situation and adopting a cautious stance. Few offers and deals for dollar-denominated cargoes were heard in the market over the week. Platts assessed LDPE film up $20 per metric ton week-over-week at $1,025 per metric ton CFR FE Asia on June 18.

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On Wednesday, Ethylene prices inched higher in Northeast Asia, while remaining stable in Southeast Asia, as per Chemweek.

CFR North East Asia ethylene prices on Wednesday were assessed at the USD 825-835/mt levels, an increase of USD (+10/mt) from Tuesday?s assessed levels. An industry source in Asia while requesting to remain unidentified informed a Polymerupdate team member, "Prices rose on account of a healthy purchase pulse in the region."

Meanwhile, CFR South East Asia ethylene prices on Wednesday were assessed flat at the USD 845-855/mt levels.

In plant news, Rabigh Refining and Petrochemical (Petro Rabigh) has restarted its cracker in mid-June 2025 following a turnaround. The cracker was shut for maintenance in mid-April 2025. Located in Rabigh, Saudi Arabia, the cracker has an ethylene production capacity of 1.6 million mt/year.

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