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By David Gaffen, Editor, Energy Markets

Hello Power Up readers! The primary focus has been all about the heat across the world, which continues to raise alarm bells among the climate-oriented, though high demand for fossil fuels still threatens to stymie progress towards reducing overall emissions. Asian countries are currently buying up oil at high rates, even more from the U.S., and drilling remains strong worldwide. All told, it’s no wonder current G20 meetings are proving a bit contentious, so let’s begin there.  

Today’s top headlines:

• ANALYSIS: Bumpy road ahead for US gasoline demand and energy transition
• TC Energy to sell 40% in Columbia gas transmission systems for $4 bln
• Chinese petchem firms betting big on energy transition projects

Fires are raging out of control as the planet bakes, but the G20 is at odds. REUTERS/Nicolas Economou

The G20 ministers are currently meeting in Goa, India, where the biggest fossil fuel producers, namely Saudi Arabia, Russia, and China (coal), opposed a proposal to triple G20 countries’ renewable energy capacity by 2030, as Sarita Chaganti Singh and Sudarshan Varadhan report here. The back-and-forth is taking place at a time when record-breaking heatwaves are pushing temperatures to extremely high rates, and various nations are undertaking mixed efforts to deal with the threat. 

Still, Russia, Saudi Arabia, China, Indonesia, and South Africa all opposed the plan to triple renewables capacity. The renewable targets were proposed by the G7 countries at the G20 ministerial delegation meeting in Goa that was based on a report by the International Energy Agency (IEA), according to two sources who are attending the meeting. The meetings continue through Saturday – but it is unclear whether they will have a joint statement of any kind due to numerous disagreements over policy. 

Shares of big oil majors have mostly meandered throughout 2023.

The world’s biggest oil companies are set to report results for the second quarter over the next several days, and it’s just a fact that they will not look as robust as a year ago. At this time in 2022, the markets were soaring as people were scrambling to lock down supply of fuel after Russia invaded Ukraine. That bolstered results for Exxon Mobil, Shell, Chevron and others, an effect that lasted for a couple of additional quarters before prices started to fall back. 

Right now, prices are much lower and fuel demand has been up-and-down, depending on the location. Chevron already has said that it expects earnings – due at the end of the week – to come in around $3.08 a share, exceeding the average estimate of $2.97 a share, with expected net income of $6.01 billion, or about half of what it did at this time a year ago.

Exxon’s revenue is expected to come in at $81.5 billion, compared with $127 billion in the year-ago period, while among the European majors, TotalEnergies is anticipating revenue of nearly $53 billion, down from $85 billion in the year-ago period.  

That’s United Arab Emirates’ Minister of Energy and Infrastructure Suhail Mohamed Al Mazrouei, in thought. REUTERS/Maxim Shemetov

OPEC+ may hold off on any additional cuts in output, UAE Energy Minister Suhail al-Mazrouei said in Goa on Friday, as Nidhi Verma reports here. The group has ratcheted down its output in recent months in what it saw as a necessary response to slowed demand.  

Oil prices have moved up modestly after the latest round of cuts in June, boosting Brent crude into $80-per-barrel territory that had proved elusive until very recently. The group has been limiting supply since late 2022, but before this, its efforts had been successful in raising prices. “What we are doing is sufficient as we say today,” al-Mazrouei told Reuters. “But we are constantly meeting and if there is a requirement to do anything else then during those meetings, we will pick it up. We are always a phone call away from each other.” 

At its last policy meeting in June, OPEC+ agreed on a broad deal to limit supply into 2024; Saudi Arabia pledged a voluntary production cut for July that it has also extended to include August. 

Venezuela’s Oil Minister and President of the Venezuelan state oil company PDVSA Pedro Tellechea in Caracas in March. REUTERS/Leonardo Fernandez Viloria

Venezuela is expecting to sign licenses by year-end to develop that nation’s natural gas reserves, Oil Minister Pedro Tellechea said on Friday, as Deisy Buitrago and Mayela Armas report here. The country has been known as an oil exporter, but it also has substantial gas reserves, and it is the midst of discussions with Italy’s Eni, Spain’s Repsol and France’s Maurel & Prom, though there is still a need to agree to certain terms for licenses to be issued.  

“We must turn into a gas exporter,” he said during a conference in Caracas. “We are making the first steps.” 

“It is a gaping hole. We have to deal with this on a war footing.” 

Pakistan’s Prime Minister Shehbaz Sharif, on the country’s $9 billion debt to power companies 

Big Asian refiners have been jumping at the chance to take advantage of a steep discount for U.S. oil over Middle Eastern grades and are set to import a near-record level of crude in August, as Muyu Xu and Florence Tan report here. About 1.5 to 1.9 million barrels per day are expected to travel to Asia in coming weeks, as the discount on U.S. West Texas Intermediate crude to Dubai-based swaps are around $5.40 a barrel.  

The costs of chartering a very large crude carrier (VLCC) to China from the U.S. was at a two-month low of $7.4 million last week, down more than 25%. Among the biggest buyers is China, which has shifted some of its purchases away from Russia and Saudi Arabia in part due to this discount. The Chinese bought about 740,000 bpd in June, which was a high not seen since December 2020.  

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