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Russia at war faces double trouble - Trump's ultimatum, and the impact on oil sales to India
Russia, which is the second-largest oil exporter in the world, is considering how it will respond to U.S. sanction against top oil companies Rosneft, and Lukoil, and to the possibility of reduced sales to India, its largest buyer. Since months, President Donald Trump and Vladimir Putin have been discussing a way to end the conflict. However, there has not yet been a breakthrough. What did the U.S. do? The U.S. Department of the Treasury’s Office of Foreign Assets Control, or OFAC, imposed sanctions against Rosneft, Lukoil and several of their subsidiaries on October 22, while calling on Moscow to agree to an immediate ceasefire. Around half of Russia's crude oil production is produced by these two companies, and they account for more than 5% global crude production. The U.S. Treasury announced sanctions in January against the Russian energy industry, including the oil majors Gazprom and Surgutneftegaz. However, these measures did not have a significant impact on Russian oil exports. Some lawmakers are calling for even tougher sanctions. The U.S. already has introduced sanctions against this so-called "shadow fleet" that handles Russia's oil imports. These sanctions are aimed at more than 180 ships and dozens oil traders, oilfield services providers, insurance companies, and energy officials. What did India do? According to two sources with knowledge of the situation, Indian refiners and their top buyer Reliance Industries intend to reduce or stop their Russian oil imports. India is under increasing pressure from the United States to reduce its purchases in trade talks with Washington. According to the International Energy Agency, it bought 1.9 millions barrels per day (bpd), or 40% of Russia’s total exports in the first nine month of 2025. What does it mean for Russia? In order to maintain its exports, Russia will likely be forced to offer greater discounts to buyers as a result of increased sanctions. The oil and gas revenues account for up to one quarter of the Russian budget. They are also the main source of funds for Moscow's ongoing military campaign against Ukraine. These taxes on mineral extraction are only paid in the oilfield. Sanctions will only be imposed if Russia has to reduce production. How could Russia respond? The Kremlin reacted to Trump's warning earlier this month that the Russian economy would collapse by saying that Russia has considerable reserves and is strong enough to enable Putin to achieve his objectives. Stopping its crude exports would be one option, but it would harm allies like China and achieve what the West wants - a reduction in Moscow's revenues and war coffers. Other options for Russia include cutting off important exports like enriched uranium or palladium, but that would also harm its own economy. A second option is to intensify rare-earth collaboration with China. According to U.S. Geological Survey data, Russia has the fifth largest reserves of rare-earth metals in the world. A tie-up with China, which is the top player, would thwart U.S. attempts to counter Beijing’s dominance. Russia has leverage over Western oil giants, as it controls Black Sea exports through the Caspian Pipeline Consortium that mainly transports crude from Kazakhstan. This oil is being pumped by the U.S. giants Chevron & Exxon Mobil. Kazakhstan is a country with whom Russia has strong economic and security links. What about OPEC+? Russia is a major member of OPEC+, which unites the Organization of the Petroleum Exporting Countries (OPEC) and its allies. It accounts for approximately half of the oil production in the world. OPEC+ has unwinded production curbs in recent months to regain market shares, but a squeeze of Russia's exports may hamper the group's attempts to agree to further increases. What about China? China, along with India is the largest buyer of Russian crude. In February 2022, when Putin visited Beijing days before sending tens-of-thousands of troops to Ukraine, the two countries announced a partnership with "no limitations". About 20% of China's crude oil imports come from Russia China's Foreign Ministry reiterated on Oct 23 its position against unilateral sanctions when commenting about U.S. restrictions on Rosneft, Lukoil and other oil companies.
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Fuel prices are set to rise in Kyrgyzstan after Ukrainian strikes on Russian refineries
Fuel prices could increase by 15% in Kyrgyzstan in the next few weeks due to a shortage of supplies from Russia. The state anti-monopoly agency said this on Thursday. Kyrgyzstan is feeling the impact of Ukrainian drone strikes on Russian oil refineries. Due to domestic shortages caused in part by the Ukrainian attacks that have affected up to a quarter of Russian refinery capacity, Russia has extended its export restrictions until 2025. Officials in Kyrgyzstan said that current reserves will last for about a month. However, they expect the situation to improve when autumn agricultural work, which increases demand, concludes in Russia. This week, several gas stations in Bishkek, the capital of Kyrgyzstan, were temporarily out of fuel. This is not good timing for the government as it faces a snap election for parliament in November, where cost of living pressures will be the main issue. Syrgak Omorov, the deputy head of anti-monopoly services, stated that the government worked with Rosneft, a Russian oil company, and local distributors in order to stabilize prices and avoid "unjustified markups". The authorities have proposed temporary tax breaks and soft loans in order to reduce the impact of fuel traders. Official figures show that gasoline prices have increased by 8.8% in Kyrgyzstan since January. Diesel has risen by 6.3%. According to the economy ministry, these increases have been a major factor in inflation which was 8.4% annually in September. Kyrgyzstan has posted a 10% economic growth in the first nine months 2025. This is largely due to Western sanctions against Russia, which have led Moscow to import goods via Kyrgyzstan. Russia and Kyrgyzstan belong to a customs Union. The consequences of Russia’s invasion of Ukraine in 2022 have affected all five former Soviet Republics of Central Asia. Their economies are closely tied to Russia. Last week, Kyrgyzstan’s neighbor Kazakhstan implemented sweeping price controls for fuel and utility rates amid rising inflation. The fallout of the Ukraine war was blamed. The Karachaganak field in Kazakhstan has seen its production fall sharply due to a Ukrainian strike on the Russian Orenburg gas plant that processes Kazakh gas. Kyrgyzstan, under the populist and nationalist Sadyr Japarow, has adopted a pro-Russian stance on the Ukraine conflict. Several Kyrgyz bank have been sanctioned by Western countries for helping Russian sanctions to be evaded. Reporting by Aigerim Turgunbaeva; Writing by Felix Light, Editing by Mark Trevelyan
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CenterPoint exceeds profit expectations on industrial demand and regulatory recovery
CenterPoint Energy, a U.S. utility, posted higher-than expected third-quarter profits on Thursday, driven by regulatory recoveries and increasing industrial demand. This included new AI data centers in Houston, Texas. Houston Electric's industrial throughput has increased by over 11% in the past year. The Greater Houston region is experiencing strong economic growth, which is supported by the most diverse set of growth drivers within the sector. The impact of the CenterPoint CEO Jason Wells's initiative is not dependent on a single industry. U.S. Public power utilities are increasing their spending to meet the demand, as Big Tech builds more data centers for artificial intelligence technology. CenterPoint, which supplies electricity and natural gases to over 7 million customers in Indiana, Louisiana and Mississippi, Ohio, Texas and Mississippi, unveiled last month its $65 billion 10-year capital plan. According to LSEG, the Houston-based company posted adjusted earnings of $50 per share for three months ending September 30. This was above analysts' estimates of $44 per share. CenterPoint stated that the results were helped by $0.07 per share of growth and regulatory recovery, and $0.12 from lower operations and maintenance costs. The regulatory recovery is the cost that the state regulator permits utilities to recover through increased rates to customers. The higher interest costs offset these gains to a certain extent. Reporting by Khusbu Jennifer in Bengaluru, Editing by Sahal Muhammad
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Russell's mining wish list is dominated by decarbonisation, critical minerals and derisking for government.
The global mining industry is most concerned about three things: critical minerals and rare earths in particular, the need to continue decarbonising, and the role of governments. These are the main takeaways of this week's IMARC conference in Sydney. This event brings together over 10,000 industry participants at one of the largest mining conferences in the world. IMARC events are a great way for companies to meet and network, and to generate business. But they also give participants the opportunity to voice their concerns, and to share where they think the industry is headed. Participants range from buyers, governments, and suppliers to miners. This year's event was dominated by three broad themes. 1. The main buzz is about rare earths and critical minerals. The stalls at IMARC, which resemble a farmer's marketplace, are promoting mining projects instead of organic vegetables or artisanal cheese. The booths are mainly occupied by junior explorers who want to raise money from investors to further their projects. The event this year was dominated mostly by companies that are developing mines of critical minerals, including several rare earths and speciality mineral projects. There were also some more conventional energy transition materials such as lithium, as well as a few other specialty minerals. Investor marketplaces are a good indication of where hot money is heading to chase the next big thing. IMARC was a favourite five years ago when gold was the metal of choice, and ten years ago it became battery metals like cobalt, Nickel, and Lithium. The supply of minerals outside China is expected to grow in the coming years, even though not all projects will be mined. 2. Decarbonisation is important, but it must be economically viable. The IMARC conference agenda was packed with presentations and panels that addressed the need to decarbonise the mining industry. This may come as a surprise to some, given Donald Trump's return to power in the United States and the rise of the far-right in certain European countries. One panelist, who is the director of a junior miner, said that many of the companies he knew had reduced their efforts in decarbonisation to only what was required by law. Most mining companies are eager to tout their green credentials, and how they plan to move to a net-zero emissions operation. The focus shifted, however, as mining service companies that work in the decarbonisation area emphasized the lower operating costs of the switch, while the reduction in emissions was a welcomed side benefit. The focus on cost savings may actually be a positive for decarbonisation as every miner wants to save money. 3. The government has a key role to play when it comes to mining. IMARC began this week, just hours after Trump signed an agreement with the Australian Prime Minister Anthony Albanese to invest in vital mineral mining and processing. The agreement will see $8.5 billion invested into a range of projects that aim to increase the supply of essential minerals. A common theme is to reduce reliance on China as the dominant player in the sector. The two governments have de-risked investment in the mining industry. While the agreement at IMARC was widely welcomed, many felt that it was only a first step. Much more work is needed. The cost of building a supply network outside China is high, and the metals refined will likely be more expensive than those that can be purchased from China. Western governments and businesses that use these metals must answer the question: How much are they willing to pay to have a supply line that is not controlled by Beijing? The answer to this question will likely determine the future investment in mining and manufacturing in the coming years. IMARC's final thoughts: Sometimes what is not visible is just as important as the obvious. The absence of anti-mining protests was notable this year. In previous years, IMARC attracted loud but peaceful protests from activists opposing the industry. The absence of the mining industry this year has been interpreted as an indication that environmentalists are now aware that energy transition is dependent on mining and that the oil and gas sector will be the new bogeyman. You like this column? Open Interest (ROI) is your new essential source of global financial commentary. ROI provides data-driven, thought-provoking analysis on everything from soybeans to swap rates. The markets are changing faster than ever. ROI can help you keep up. Follow ROI on LinkedIn, X. These are the views of the columnist, who is also an author. (Editing by Lincoln Feast.
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Oil Futures Return to Structure Signaling Tight Supply on Russia Sanctions
The Brent crude futures contract for the immediate period on Thursday traded at a higher price than the six-month contract, after the new U.S. Sanctions on Russia revived concerns of a tighter market in the short term. This erased earlier signs of fear of a glut. Brent's first-month contract trades at a price of around $2 per barrel higher than the contract for delivery within six months Backwardation is a term used to describe a tight supply in the near future. The global oil price rose by more than 5% after U.S. president Donald Trump imposed sanctions on Russia's biggest oil companies, Lukoil & Rosneft. The EU has added two Chinese refiners, a trader and other sanctions to its list of Russia sanctions. Giovanni Staunovo, an analyst at UBS, said that market participants' concerns are now shifting from oversupplied markets towards disruptions in supply. He said that Lukoil, and Rosneft, accounted for between 50-55% (of Russian oil output) of the country's third largest oil producer. Brent prompt traded at a discount of up to 56 cents per barrel earlier this week. This was the first time in May that Brent had been discounted since October 16. This structure is a reflection of the perception that the market will be well-supplied in near term, as prompt barrels are trading at a discount compared to later supplies. The spread between the WTI Crude Futures Contract and its major U.S. counterpart Also, trading ended in backwardation Thursday after a brief time in contango. Reporting by Seher dareen, London. Editing by Alex Lawler & Chizu Nomiyama.
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Japan Nuclear Sector seeks more support for new reactor construction, says lobby leader
A lobby leader said that the nuclear industry in Japan wants more support for building new reactors under the newly elected pronuclear prime minister Sanae Takaichi. This includes state-run auctions of capacity, according to a Thursday statement. Only 14 of the 54 reactors that operated in Japan prior to the Fukushima nuclear disaster in 2011 have been brought online. Takaichi said reviving the nuclear power was key to Japan's security. Japan has focused on restarting reactors that have been shut down - the government extended the operating life from 40 to 60 year - and only one new plant is currently in the planning stages. Hideki Masui said that the LTDA scheme, which is a long-term auction of decarbonised capacities, could be used to provide more funding for the construction of new reactors in Japan. This process takes about two decades. Masui said, "We should add a scheme to the LTDA that allows for some sort of fund recovery during construction even at an early stage." Masui stated that there are no safety regulations in place for the next-generation reactors. Operators are also seeking "financial support" and predictability from regulators. Kansai, Japan's largest nuclear power company, announced in July that it was conducting surveys for a new reactor to be built in western Japan. This is the first concrete step since Fukushima towards building a reactor. Data centres are bringing back years of decline in power consumption. By 2040, Japan wants nuclear power to account for 20% of the electricity mix, up from 10% today. Masui stated that the authorities have granted initial restart permits to four more idled reactors. Eight others are currently undergoing safety tests and another 10 could request restarts. Masui stated, "Theoretically I believe Japan can reach its nuclear goal by 2040 with over 30 reactors running." (Reporting and editing by Tony Munroe and William Maclean.)
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The spot crude premium is rising as US sanctions against Russian producers are driving China and India demand
Trade sources and analysts reported that spot premiums on crude markets rose on Thursday, as traders and analysts expected the U.S. sanctions against top Russian producers to spur China and India’s demand for supplies coming from the Middle East and Africa, and South America. Washington imposed sanctions on major oil suppliers Lukoil and Rosneft over the Ukraine conflict, causing concern over a tighter supply from Russia. Russia is the largest supplier of crude oil to China and India. Brent oil futures, the global benchmark for crude oil, rose more than 4% Thursday. Sources said that Indian refiners, as well as some Chinese companies who are among the top buyers of oil in the world, will curtail their Russian oil imports, to comply with new sanctions. They'll turn to alternative suppliers. This prompted a surge in spot premiums Thursday for the key Middle Eastern benchmarks after they had fallen earlier this month due to an abundance of supply, as the Organization of the Petroleum Exporting Countries (OPEC) and its allies increased output. Data showed that Cash Dubai's premium reached a high of $2.71 a barrel for the third consecutive session. This is more than twice the $1.26 compared to the previous session. On October 2, it hit a low of 22 months. The data also showed that spot premiums for benchmark grades GME Oman, IFAD Murban, and IFAD Murban, both rose to new one-month highs of $3.12 a barrel and $2.86 a barrel, respectively. Two sources who have direct knowledge of this matter confirmed on Thursday that Reliance Industries, a privately-owned company, will cease importing crude oil as part of a long-term agreement to purchase nearly 500,000 barrels of crude oil per day from Rosneft. Sources with direct knowledge said that Indian state refiners, including Indian Oil Corp., Bharat Petroleum Corp. and Hindustan Petroleum Corp., are also reviewing their Russian trade documents in order to ensure that no oil will come directly from Rosneft or Lukoil following the U.S. sanctions against the oil companies. Reliance purchased crude oil cargoes in recent days from Brazil and Middle East. These included Qatari al-Shaheen, Land grades and Iraqi Basra Medium. The crude could be used as a partial replacement for Russian supplies. Reliance was seen Thursday in the market scouting out supplies, according to a Middle Eastern merchant approached by Reliance. We expect that most of the substitute crudes will come from the Middle East. Richard Jones, an Energy Aspects crude analyst, said that the urgent need for sour-barrels will allow the current Basra surplus to be cleared faster than previously expected. The Brent-Dubai swap has fallen further into negative territory as a result of today's rally, which supports Atlantic basin arbs. Brent's premium to Dubai quotes LSEG data show that the price of a barrel was 1 cent on Thursday. It had been negative since this week's start. Brent-linked grades of oil from the Atlantic Basin are more attractive to buyers in Asia as the price difference narrows. Last week, Britain also sanctioned Rosneft (Russian oil company) and Lukoil (Russian oil company). Reporting by Florence Tan in Singapore and Siyi Luu in New Delhi, with additional reporting by Nidhi verma; editing by Harikrishnan Nair
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PG&E 2026 profit forecast beats expectations amid strong power demand
PG&E, the utility firm, forecast its 2026 full-year profit on Thursday. This was a little above Wall Street's expectations due to a surge in power demand. According to the U.S. Energy Information Administration, U.S. electricity consumption is expected to reach record levels in 2026, as data centers for artificial intelligence, cryptocurrency, and household and commercial use consume huge amounts of energy. The California-based utility announced in September that it will spend $73 billion between now and 2030 on transmission upgrades, to keep up with the surge in demand for electricity due to data centers. According to LSEG data, the company expects 2026 core earnings adjusted between $1.62-$1.66 per share. The midpoint is expected to exceed analysts' average estimates by one cent per share. The outlook for 2025 was also reduced to $1.49 to $1.51 per common share, from $1.48 to $1.52. The company reported an adjusted profit per share of 50 cents in the third quarter. This was above the 42 cents expected by analysts, due to the higher demand and lower operating expenses. The wildfire fund is a pool of money that covers the costs utilities incur due to such events. In the third quarter, the company spent $86 million, which was down 38% compared to a year ago. PG&E is investing in its grid to improve reliability, and has built underground power lines. This comes after it was blamed for causing a number of wildfires including the most deadly ones in California. The utility reported that at the end of the third quarter it had liabilities totaling $1,33 billion in relation to the Kincade Fire in 2019, $2,13 billion in relation to the Dixie Fire in 2021 and 250 million in relation the Mosquito Fire in 2022. PG&E, the parent company of Pacific Gas and Electric Company (PG&E), is an energy provider that provides service to 16 million Californians in a 70,000 square-mile area. (Reporting from Pranav Mathur, Bengaluru. Editing by Vijay Kishore.
Valero Energy's profit beats expectations for the third quarter on higher margins
Valero Energy, a U.S. refiner, surpassed Wall Street's expectations on Thursday for its third-quarter profits. This was due to a rebound in the refining margins.
After two years of record profits, the refining margins rebounded in 2024 from their multi-year lows. This was due to refiners taking advantage of supply shortages that were caused by geopolitical tensions affecting Ukraine.
U.S. refinery profit margins measured by the 3-2-1 Crack Spread
The company reported that its average daily throughput volume increased to 3.1 millions barrels in the third quarter from 2.9million bpd one year ago.
Valero’s refining profit per barrel was $13.14 compared to $9.09 one year ago.
According to LSEG data, the company's adjusted profit for the three-month period ended September 30 was $3.66, compared to analysts' expectations for $3.05.
(source: Reuters)