Hello Power Up readers! The oil market’s rally is really getting serious here, with Brent crude scaling $95 a barrel for the first time in ages, as Saudi Arabia keeps the brakes on output while China’s economic distress may not be as bad as feared. That’s affecting fuel costs worldwide naturally. But first, let’s talk about the downfall of former BP CEO Bernard Looney…
Look, we know it’s a cliché to put up a pic of someone grimacing when we’re talking about bad news, but it’s hard to resist. This is Bernard Looney, ex-CEO of BP, back in June. Niall Carson/Pool via REUTERS
Bernard Looney, the CEO of BP, is out as of last week. Looney was head of the company for less than four years – but he has stepped aside after he didn’t disclose details of past personal relationships with colleagues, as Ron Bousso and Shadia Nasralla report here.
The resignation was a surprise – but it came after allegations of personal relationships with company colleagues surfaced recently – prompting an investigation. And Looney apparently hadn’t disclosed all of those, which then led to his leaving. Looney became the CEO in 2020 with a vow to transition the company to be a big provider of renewable energy and achieve zero net emissions by 2050 and it is unclear whether that strategy will shift now.
This isn’t the first CEO whose departure from BP has been ignominious. Tony Hayward left shortly after the Deepwater Horizon spill in 2010; his predecessor, John Browne, left after a series of safety issues including a deadly refinery explosion in Texas in 2005 and after lying to a London court to try to suppress details of his personal life.
The broader market remains a worry for people less interested in the issues surrounding an ex-oil CEO. Brent crude recently hit $95 a barrel, and the driving factors remain all the same: less Saudi output, still-strong demand. Saudi exports fell to more than a two-year low in July, hitting 6.01 million barrels per day, as Reuters reports here. That’s an 11% decline from June’s 6.8 million bpd and the lowest since June 2021.
Output fell to 9.01 million bpd as the Saudis try to squeeze production to keep prices high – per the Joint Organizations Data Initiative (JODI). On top of that, China’s demand has been a bit better than expected, as it has boosted diesel exports in August sharply, tripling from the year-ago period, and gasoline demand was on the rise as well.
EU Risks China Dependency
Just after undoing Russian relationship
Employees on a production line manufacturing lithium battery products in Yichang, Hubei province, China. (Image provided by a third party.)
The European Union relied for ages on Russian energy – which came to a screaming halt after that nation invaded Ukraine last year. Now, it risks becoming dependent on China for lithium-ion batteries and fuel cells as much as it was on Russia, as Belén Carreño reports here. That comes from a paper prepared for EU leaders ahead of an October summit that attempts to reduce the risk of Europe becoming too tied to China’s manufacture of key materials for batteries and other renewable energy projects.
The EU will need ways to store energy to get to net-zero carbon dioxide emissions by 2050 – but that means lots of batteries. “Without implementing strong measures, the European energy ecosystem could have a dependency on China by 2030 of a different nature, but with a similar severity, from the one it had on Russia before the invasion of Ukraine,” it said.
A Mighty Wind Is Blowing…Or Not
US Northeast states warn ambitious goals will be missed
That’s installation of a wind farm off the coast of Block Island, Rhode Island. REUTERS/Brian Snyder
The rising costs of developing offshore wind, along with supply delays, is weighing down the Biden administration’s goal to deploy 30,000 megawatts of offshore wind this decade, as big U.S. Northeast states, who are key in developing these projects, are dealing with struggles to get towers built to reach their own ambitions of ramping up the use of wind power.
The New York State Energy Research and Development Authority (NYSERDA) recently warned that state’s utility regulator last month that delays in deploying offshore wind could threaten its own targets; some developers, like Orsted, Equinor, and Avangrid have had to cancel or try to renegotiate power contracts for the first big wind farms scheduled to start in the next few years, as Nichola Groom reports here.
Quote of the Day
“Australia is the closest gas supplier we can get. By far, Australia, U.S. and Qatar are the three pillars in LNG supply chain. If any of them is having problems, we would indeed be nervous.”
Jane Liao of state-run energy firm CPC Taiwan, on the issues affecting LNG in Australia
Chevron’s Australian LNG Still Running
Strikes have not yet hit output
So far, production at Chevron’s Wheatstone and Gorgon facilities in Australia has continued despite ongoing strikes that are intensifying, as Reuters reports here. The unions at the facilities which produce the super-cooled fuel are striking for better wages and conditions.
Talks are continuing, but so far production has been maintained in part, though that may change if the stoppages extend to longer lengths of time and continue for several weeks.
Sponsors are not involved in the creation of newsletters or other Reuters news content.
Power Up is sent twice weekly. Think your friend or colleague should know about us? Forward this newsletter to them. They can also sign up here.
Want to stop receiving this newsletter? Unsubscribe here.
To manage which newsletters you’re signed up for, click here.