Panama Drought's Global Ripple:
The Impact on Petroleum Trade and Shipping Dynamics
On Today’s Energy Shots:
Weekly Energy Industry News Recap
Downstream Effects of Panama’s Drought
Weekly Energy News Recap:
US House of Rep. Passes Bill to Expand Iran Sanctions
On Friday, the US House of Representatives passed the Stop Harboring Iranian Petroleum (SHIP) bill 342-69 to impose penalties on ports and refineries that process sanctioned Iranian petroleum.
The bill must pass the Senate before hitting President Biden’s desk.
Nigeria Brings Dangote Refinery Online in December
Nigeria’s state oil firm NNPC Ltd. plans to supply the country’s new 650,000 bpd Dangote oil refinery with six crude oil cargoes, totaling as much as 200,000 bpd, in December.
Sinopec & QatarEnergy Sign 27-Year LNG Deal
Sinopec and QatarEnergy agreed to cooperate on the second phase of Qatar’s North Field expansion project for 3 million metric tons of LNG per year to Sinopec. QatarEnergy will transfer a 5% stake to Sinopec in a joint venture that owns ~6 million metric tons per year of LNG production capacity in North Field South.
US Coal Exports to Europe Surge
US coal exports to Europe climbed 22% in the twelve months following the EU’s August 2022 sanctions on Russia.
US steam coal shipments between August 2022 and July 2023 climbed 51%.
Downstream Effects of Panama’s Drought
Panama’s rainy season hasn’t lived up to the name during this year’s El Nino weather pattern.
With 41% less rain than the historical average, last month became Panama’s driest October since recordkeeping began 73 years ago.
Gatun Lake, which feeds the locks of the Panama Canal and serves as a reserve for more than 50% of Panamanians, is at its lowest level since at least 1995.
In January 2023, the Panama Canal Authority (APC) began implementing transit restrictions to conserve water.
In July, the APC cut its daily transit limit through the canal from 36 to 32 vessels, leading to a 17-day delay for Neopanamax-sized ships passing through the locks in August.
On Tuesday, the APC announced additional transit restrictions effective Nov. 3 with cascading cuts through February.
The APC’s new transit limits have a downstream consequence for petroleum markets: Hydrocarbon Gas Liquid (HGL) shipments from the US to Asia.
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