Britain delays ban on new petrol and diesel cars to 2035

Britain will push back a ban on new petrol and diesel cars and vans to 2035 from 2030, Prime Minister Rishi Sunak said on Wednesday, adding that the cars would still be available to buy on the secondhand market thereafter, said Reuters.

Back in 2020, then Prime Minister Boris Johnson announced that the sale of new petrol and diesel engined cars would be banned from 2030, with hybrid-engine models allowed to be sold until 2035; thereafter, all new cars in the UK would be EVs. However, the current Prime Minister has abandoned this plan to appease voters and some Tory backbenchers (although many within the Conservative party urged Sunak to stick to the original deadline).

Citing the need to maintain consumer flexibility at the turn of the decade, the Prime Minister's revised policy brings the UK into line with most of Europe, including France, Italy and Spain.

The UK Government recently announced ?500m of subsidies to Jaguar Land Rover to build its ?4bn gigafactory in Somerset. It has also committed ?211 million in advance battery research via the Faraday battery challenge.

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China's fuel oil imports retreated for a second consecutive month in August, data from the General Administration of Customs showed on Wednesday, as per Reuters.

Total fuel oil imports were down 8% from July to 1.4 million metric tons in August, though still more than double compared to the same period last year. The imports included purchases under ordinary trade, which is subject to import duty and consumption tax, as well as imports into bonded storages.

The decline came amid recovery in China's diluted bitumen imports, after customs authorities eased months-long inspections. A sharp uptick in Asia's high sulfur fuel oil prices in August also deterred purchases.

China's fuel oil imports started to show signs of easing in July after hitting a decade-high in June, the data showed. Independent refiners earlier boosted fuel oil purchases to be used as a refinery feedstock this year, particularly discounted barrels of Russian high sulfur fuel oil.

Meanwhile, China's exports of low sulfur marine fuels, measured mostly by sales from bonded storage for vessels plying international routes, totaled 1.55 million tons in August, up 1% from July but down 20% from a year ago.

The table below shows China's fuel oil imports and exports in metric tons. The exports section largely captures China's low sulfur oil bunkering sales along its coast.

We remind, Russia's Sakhalin Energy, which produces liquefied natural gas and oil, has fully resumed production following maintenance. The company has said it planned maintenance in July without providing a timeframe. Sakhalin Energy's Sakhalin-2 operating company was transformed into a Russian entity via a presidential decree amid Western sanctions against Moscow over its actions in Ukraine.

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North American chemical rail traffic rose for a fifth consecutive week, with railcar loadings for the week ended 16 September up 2.0% year on year to 46,964, according to the Association of American Railroads.

Increases in the US and Mexico more than offset a decline in Canada. For the first 37 weeks of 2023 ended 16 September, North American chemical rail traffic was down 1.7% year on year to 1,676,950 loadings - with the US down 3.0% to 1,152,729.

In the US, chemical railcar loadings represent about 20% of chemical transportation by tonnage, with trucks, barges and pipelines carrying the rest. In Canada, chemical producers rely on rail to ship more than 70% of their products, with some exclusively using rail.

We remind, North American chemical rail traffic rose for a fourth consecutive week as railcar loadings for the week ended 9 September were up 2.8% year on year to 43,757, with the US, Canada and Mexico all registering increases.

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Russia maintained its spot as China's top crude oil supplier in August, Chinese government data showed on Wednesday, even as discounts on Russian crude continued to narrow and Moscow cut exports, as per Reuters.

China's imports from Russia -- including supplies via pipelines and seaborne shipments -- jumped 26% from August last year to 10.54 million metric tons, or 2.48 million barrels per day (bpd), the second highest on the record, according to data from the General Administration of Customs.

Russian arrivals over the first eight months of the year were up a quarter from a year earlier to 71.21 million tons. Shipments from Saudi Arabia totaled 8.01 million tons, or 1.89 million bpd, down 5.5% from a year earlier, but rising from 5.65 million tons in July.

Saudi exports to Asian refiners continue to be depressed by higher official selling prices, with the price for Asian refiners of the kingdom's signature Arab Light grade having risen by 20 cents to $3.20 a barrel over Oman/Dubai in August.

Saudi Arabia's ongoing unilateral cuts saw output reduced by 1 million bpd through August, and Riyadh has announced it will extend the cuts until the end of the year. Meanwhile, Moscow pledged that it would reduce crude exports by 500,000 bpd in August, and later announced it would extend cuts of 300,000 bpd until the end of the year.

Tightening supply and strong demand from Indian and Chinese independent refiners has seen the discount on sanctioned Russian crude narrow sharply. August-delivery ESPO shipments were priced at around a $4 per barrel discount to the ICE Brent benchmark, versus $6 for July delivery cargoes and $8.50 for shipments delivered in March, according to trading sources.

Chinese refiners use intermediary traders to handle shipping and insurance of Russian crude to avoid violating Western sanctions. Imports from Malaysia, used as a trans-shipment point for cargoes from Iran and Venezuela, soared 70% from a year earlier to 5.73 million tons, or 1.35 million bpd in August, the third largest supplier after Russia and Saudi Arabia.

China's imports of U.S. crude reached nearly 400,000 tons, up from zero a year earlier and taking the year-to-date volume to 9.85 million tons, more than doubling the year-ago amount.

We remind, Russia's United Oil- and Gas-Chemical Co. and China's Xuan Yuan Industrial Development have agreed to jointly invest USD686 MM in construction of a transshipment oil complex in Russia's far east. The complex will facilitate Russia's oil exports to China as Moscow expands its infrastructure to diversify exports of commodities eastward and away from Europe, which it now deems politically "unfriendly".

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India's state-run Oil and Natural Gas Corp wants to eventually receive a share of crude from a Russian project it partly owns but is willing to wait because Russian oil is hard to ship right now, the head of ONGC's overseas investment arm, said Reuters.

Russian President Vladimir Putin last year removed an Exxon Mobil subsidiary as operator of the Sakhalin-1 oil and gas project in Russia's Far East and transferred it to a new operator. ONGC Videsh has since regained its 20% stake in the project and is in talks with Russian government officials and company shareholders to resume taking oil under a production-sharing arrangement, said Rajarshi Gupta, CEO of ONGC Videsh.

"If we can be in a position to lift our oil and market our oil, that would be better," Gupta said in an interview at the World Petroleum Congress in Calgary, Canada. "As of now, there are so many restrictions on that oil, so if someone else is dealing with that, I'm OK with it for the time being."

Western governments have slapped sanctions on Russian oil over the war in Ukraine, which Russia calls a special military operation. It is difficult to secure insurance and shipping to transport Russian oil, Gupta said, and such shipments must abide by an international price cap. The cap allows third countries to buy Russian fuel using Western ship insurance if there is proof the purchase does not exceed price limits of $60 per barrel for crude.

The talks with Russia and other project shareholders may take six months to conclude, Gupta said. Sakhalin-1 produces about 200,000 barrels of oil per day. Other shareholders include Japan's Sodeco and Russia's Rosneft.

ONGC, India's top explorer, has investments in three Russian projects in total but the company is not actively looking to invest further in Russia for now, he said. "There are not enough sellers, not enough buyers," Gupta said. "People are waiting for things to evolve (with the Russia-Ukraine war)."

ONGC accounts for about two-thirds of India's oil production and about 58% of its gas output. The country relies on imports for most of its oil and gas.

India's crude oil imports fell for a third month in a row in August, government data showed on Tuesday, as refiners in the world's third biggest importer carried out maintenance and reduced shipments from Russia.

We remind, Russia's Sakhalin Energy, which produces liquefied natural gas and oil, has fully resumed production following maintenance. The company has said it planned maintenance in July without providing a timeframe. Sakhalin Energy's Sakhalin-2 operating company was transformed into a Russian entity via a presidential decree amid Western sanctions against Moscow over its actions in Ukraine.

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