Editors: Tom Whipple, Steve Andrews

Quote of the Week

If overall oil demand remains 20 percent less this year than last, why would oil companies consider drilling for new supplies until capacity dropped nearer to where demand is? The longer those companies wait to replenish supplies in earnest, the more difficult it will be to return to production levels last seen at the end of the 2018.”
 
         Kurt Cobb, author and energy commentator

Graphic of the Week

Contents
 
1.  Energy prices and production
2.  Geopolitical instability
3.  Climate change
4. The global economy and the coronavirus
5. Renewables and new technologies
6. Briefs

1.  Energy prices and production

Prices: Futures were volatile last week with prices bouncing between $31 and $35 a barrel in response to the latest news. Oil closed out May on Friday with a record monthly gain of 88 percent on hopes demand for oil would continue to rise as economies reopen and crude production continues to fall. The status of the US-China trade agreement is in doubt as relations continue to deteriorate and resurgence of the coronavirus as lockdowns are lifted will be a significant factor in the movement of oil prices during the next few weeks.

The major issue is how long it will take for the oil markets to balance.  The IEA estimates that demand for oil in May was down on the order of 25 million b/d from May of 2019 and that June’s demand will be down by 15 million. The increase in demand this month is based on the relaxation of restrictions in the US, Europe, India, and China. However, large sectors of demand, such as air travel, shipping, tourism, sports, and entertainment are unlikely to be much affected by the relaxations. New spikes in the virus, however, are certain to result in enhanced restrictions or more public reluctance to resume non-essential activities. Moreover, the coronavirus is spreading rapidly in many parts of the underdeveloped world which is bound to have a significant impact on economic activity and imports of non-essential products.

There are two parts to the oil supply story. First is the OPEC+ agreement to curtail 9.7 million b/d through June and 7.7 million through December. The other is the ongoing decline of US shale oil which could amount to 5 million b/d or more by the end of the year.

OPEC oil output hit the lowest in two decades in May as Saudi Arabia and other members started to deliver a record supply cut.  A Reuters survey found that on average, the 13-member Organization pumped 24.77 b/d in May, 5.91 million b/d from April’s revised figure.

Saudi Arabia and several other members of OPEC are discussing the possibility of extending the current level of OPEC+ production cuts to the end of the year, but Russia could be the stumbling block. OPEC and allies will hold online meetings on June 9-10 to discuss if they should extend their production cuts or start tapering them. Russia is said to be determined to start easing oil output cuts in July, as agreed by OPEC+ in April.

Availability of storage for the excess crude production is still an open question. US crude oil stocks grew by nearly 8 million barrels the week before last, but this may have to due to the “Armada” of Saudi oil tankers that were dispatched to America back when Saudis were waging a price war with Russia. Some analysts believe that the oil storage crisis is far from over. Ships full of crude are still anchored off the coasts of the US, China, Europe, and elsewhere. With most onshore storage sold out and refinery run rates across the globe still a long way off their usual pace, storage could still be a problem.

US shale oil production is falling so fast that even the EIA can’t keep up with the decline and has been making downward revisions to its production forecasts in recent weeks. US oil production has fallen 12 percent since early March to 11.4 million b/d, according to the Energy Information Administration. These numbers should be suspect until final production numbers are available in about six weeks.

Drilling is now at the slowest pace in more than a decade as the pandemic-driven collapse in energy demand wipes out cash flow, jobs and entire companies. Drillers idled 15 oil rigs across the US last week, bringing the tally to 222, the lowest since 2009, according to Baker Hughes. The Permian Basin of West Texas and New Mexico accounted for the bulk of the reduction, with 14 rigs taken out of service.

Oil companies have abandoned drilling programs and tossed out financial forecasts in the wake of the spiral that saw American crude prices turn negative in April. Bankruptcies are accelerating among the most heavily leveraged drillers, and even major oil companies such as Chevron are cutting jobs and adopting austerity plans to conserve capital.
 
The gap between the oil and equity markets and the real economy continues to widen. Over 40 million people have filed for unemployment. Corporate bankruptcies are accelerating. A real estate crisis is forming, with millions of people and thousands of businesses unable to pay rent and mortgages.
 
Consulting firm Rystad Energy is telling traders that the oil market was oversupplied only by around 16 million b/d in April so that the rapid shut-in of around 12 million b/d has erased a huge portion of the surplus. The supposed rebound in demand – of around 4 million b/d, according to Rystad – puts the market close to “balanced” in June. Such optimism, if true, gives traders a reason to push oil markets higher, but others are not so sure.
 
Oil prices are back at levels last seen in mid-March, prior to the shutdowns. “We find it hard to justify why prices are where they were on 11 March,” Standard Chartered wrote in a note last Tuesday. “We do not think expectations about the future have brightened significantly since this date.” The investment bank noted that the IEA’s projection for global demand in March was a slight decline of just 90,000 b/d for 2020. Now, the agency’s estimate is for demand to decline by 8.63 million b/d, “96 times more than the estimate on 11 March.” And yet, oil prices are trading in the mid-$30s, just as they were in March.
 
Many believe that the May price surge is an overreaction and is not in line with fundamentals of the global economic and political situations.  According to 43 analysts surveyed by Reuters, the US benchmark WTI Crude is set to average $32.78 a barrel in 2020, which is roughly where the contract was trading on Friday. Brent Crude prices are expected to average $37.58 per barrel this year, the analysts in the Reuters poll predicted.

2.  Geopolitical instability

Iran: Businesses in Iran, including those deemed “high risk,” resumed work last Tuesday. The advice is based on guidance from the government’s coronavirus task force. So-called high-risk businesses include restaurants, cafes, gyms, saunas, and wedding halls, but that they have to keep abiding by social-distancing rules. Religious shrines and mosques will reopen Monday, after the Muslim holiday of Eid. Tehran says that it has an official 151,000 COVID-19 cases and has registered 7,800 deaths, but outside observers say it is likely much higher.

Given that China’s oil demand has now recovered from the coronavirus, Iran is trying to increase the oil going to Beijing. This effort involves optimizing output from the cluster of giant oilfields in the West Karoun region, increasing the average recovery rate from older fields, and pushing forward production increases from fields shared with Iraq and Kuwait. Tehran hopes this will increase Iran’s crude oil production to 5.7 million b/d from the current 2 million by 2022; that seems like a huge stretch under much better circumstances.

Tehran plans to stop exporting gas condensates and instead refine them to produce gasoline and naphtha. Oil Minister Zanganeh said the plan is to add value to its light hydrocarbons. “All these gas condensates will be refined in the Persian Gulf Star and Siraf refineries to gasoline and petrochemical feedstock,” Zanganeh said. The minister did not reveal how much Iran has been exporting. 

The Trump administration is ending sanctions waivers that have allowed Russian, Chinese, and European companies to do work at sensitive Iranian nuclear sites. The decision was made following an internal battle between Iran hawks and a more aggressive group of hard-liners inside the US government. Nonproliferation experts say the waivers, issued after President Trump withdrew from the Iran nuclear deal, reduce Tehran’s incentive to enrich uranium at higher levels and provide a valuable window into the country’s atomic program.

Iraq: The active oil rig count fell by almost two-thirds this year after international oil companies were ordered to cut spending because of the price crash and the new OPEC+ cuts. The rig-count now averages 32 rigs operated by IOCs, down from 88 rigs in December 2019. Federal Iraq operated 31 rigs last month, compared with 76 in December, while the semiautonomous Kurdish region averaged only one active rig in May compared with 12 in December.

In March, Iraq’s state-run Basrah Oil Co. asked IOCs to cut budgets by 30 percent and postpone payments to subcontractors due to the oil price crash. Oil prices received by federal Iraq were down to about $14 per barrel in April, from $60 per barrel in January, slashing oil revenue to $1.4 billion from $6.16 billion, which accounts for more than 90 percent of Iraq’s federal budget. Oil drilling is now the most significant investment expenditure of IOCs, the sources said. The drop in the drilling programs allowed Iraq to cut costs by 30 percent.

Iraq is currently cutting its output in line with the new OPEC+ agreement that will trim a record 9.7 million b/d in May and June. At 4.54 million b/d in April — according to the latest Platts OPEC survey — Iraq’s production will have to fall by almost 1 million b/d for the country to abide by its quota under the OPEC+ deal. 

With Russia’s Rosneft having effectively taken control of Kurdistan’s oil and gas sector through the deal done in November 2017, Moscow had been looking to leverage this presence into a similarly dominant position in the south of the country. The Russians have sought to strike new oil and gas field exploration and development deals with Baghdad as part of Russia’s role in mediating the dispute between Kurdistan and the south on the budget disbursements for oil deals. 

These ambitions were put on hold as Russia did not want to be associated with the increasingly overt anti-American militancy in southern Iraq that resulted in several strikes against US military installations. Last week, though, Russia signaled that its intentions in south Iraq are back on track.

Libya: Crude oil exports shrunk by 92 percent, and the National Oil Corporation lost some $5 billion since the start of the oil blockade early this year. Paramilitary formations affiliated with General Haftar’s Libyan National Army occupied Libya’s oil export terminals in January, along with pipelines and fields. At the time, the losses in production were estimated at between 500,000 and 800,000 b/d. As of late January, Libya’s output was around 300,000 b/d. As of early April, production was below 100,000 b/d, down from 1.2 million before the blockade.

A French frigate prevented a tanker from loading refined oil products at a Libyan port intended for UAE-registered company. The frigate was on an EU mission to monitor the arms embargo against Libya and prevent illegal oil and petroleum products from leaving Libya. 

Senior US military officials said Russia had sent jet fighters to Libya to support Russian mercenaries fighting on behalf of Khalifa Haftar. The deployment of Russian jet fighters to Libya is a significant escalation in Moscow’s involvement in the Libyan conflict. The US military’s Africa Command sought Tuesday to bolster its unusually blunt criticism of Russia’s actions by releasing imagery of a MiG-29 at Libya’s Al Jufra airfield.

The Russian Defense Ministry didn’t respond to a request for comment on the situation. The Kremlin has said in recent weeks that it supports a political solution to the conflict in Libya. Russia has backed Mr. Haftar, a militia leader based in Libya’s east, for years, but has denied direct involvement in the fighting there.

Venezuela: PDVSA has cut crude production at several locations. Its main crude blending plant has been operating intermittently this month due to mounting stockpiles, according to a half-dozen industry sources and documents were seen by Reuters. Venezuela’s oil industry has been squeezed by US sanctions, and in recent months the Trump administration has increased the pressure on some of the remaining buyers of Venezuelan crude. Washington sanctioned PDVSA early last year as part of the administration’s efforts to oust President Nicolas Maduro. That has caused exports to fall sharply, boosting domestic crude storage to 38.2 million barrels, up by 2.3 million barrels from the end of April. 

The production of crude in the Orinoco Belt fell to 235,000 b/d, or 18 percent of the region’s maximum 1.3 million b/d capacity, on May 26, due to storage limitations and the lack of light crude to dilute the region’s extra heavy crudes. It was the lowest production level registered for the Orinoco Belt since September 2019, when output dropped to 233,000 b/d owing to massive power blackouts. The April average output was at 390,000 b/d.

In September 2019, inventories reached 40.3 million barrels but drained as exports picked up. Overall, Venezuela produced 656,000 barrels on May 13 and 642,000 barrels on May 14, according to the most recent internal PDVSA data seen by Reuters. That was down from the 737,000 barrels per day the country told OPEC it produced on average in April.

The fourth Iranian fuel tanker has made its way into Venezuelan waters in a direct challenge to US sanctions on both countries. The first three tankers that Iran sent to Venezuela have already arrived and are unloading. The total deliveries from Iran to Venezuela are expected to be about 1.5 million barrels of gasoline and refining components.

3.  Climate change

The three most significant producers of planet-warming gases — the EU, the US, and China — are preparing to push their carbon emissions in different directions. Europe is laying out a vision of a green future, with a proposed recovery package worth more than $800 billion that would transition the continent away from fossil fuels and make old buildings energy efficient. In the United States, the Trump administration is steadily slashing environmental protections and the Republican Party is using the specter of a socialistic “Green New Deal” to attack its opponents. China is still building new coal plants, but not setting specific economic growth targets for this year, a move that environmentalists fear would pressure a rapid restart of industry.
 
Just as recovery plans are taking shape, though, the climate-change-related political pressure on world leaders dropped. On Thursday, the UN announced that the next round of global climate talks, which had been slated for Glasgow in November, would be delayed until November 2021. The Glasgow talks are the most critical climate meeting since the Paris Agreement was adopted in 2015, after 20 years of negotiations. Under the Paris pact, which was designed mainly to work through peer pressure among nations at annual meetings, world leaders were expected to announce revised targets this year for reducing emissions.
 
The bitterly cold Arctic winter usually snuffs out the seasonal wildfires that erupt in this region. But every once in a while, a wildfire comes along that refuses to die. These blazes, known as “zombie fires” or “holdover fires,” can burrow into the rich organic material beneath the surface. These include the vast peatlands that ring the Arctic and smolder under the snowpack throughout the frigid winter. With the Siberian Arctic seeing record warm conditions in recent weeks and months, scientists monitoring Arctic wildfire trends are becoming more convinced that some of the blazes erupting in the Arctic this spring are left over from last summer.
 
Last year brought a record surge in fires to a region warming at more than twice the rate of the rest of the world. The Arctic contains vast stores of carbon and other planet-warming greenhouse gases in its soils, in peat as well as frozen soil is known as permafrost, that can be freed up through combustion. Peatlands are wetlands that contain ancient, decomposed, and partially decomposed organic matter.
 
Recent Arctic fires have been found in areas where blazes were burning last summer. According to Russia’s federal meteorological service, the region has witnessed unusually warm weather this month, with temperatures in some parts of the Arctic as much as 29 degrees F higher than usual. High temperatures and low precipitation also have dried out vegetation sooner than usual.

Presidential Candidate Joe Biden says he will add details to his climate plan and is likely to propose new investments as an olive branch to Bernie Sanders and his liberal allies. But in battleground states such as Pennsylvania, Republicans are already portraying Biden as a threat to the oil-and-gas industry.
 
Biden has indicated he is willing to do more to address climate change, saying last month that possible areas to build on include investing in clean energy technologies and policies. A climate task force he put together with the help of Bernie Sanders, his former rival for the Democratic nomination, began meeting last week.

4.  The global economy and the coronavirus

Global death statistics indicate that few countries are accurately capturing fatalities from the coronavirus—and in some, the shortfall is significant. In the US, Russia, the UK, the Netherlands, and many other countries, the number of deaths recorded from all causes has jumped since March and far exceeds the number of fatalities those countries report as linked to Covid-19. Belgium, which appears to have the world’s highest per-capita Covid-19 death rate, has emerged as an exception. Unlike most countries and many US states, which list only Covid-19 deaths confirmed by tests, Belgium also tallies suspected Covid-19 fatalities. 

Across the globe, the coronavirus course is a mixed bag, with some areas making progress against the pandemic while in others infections and the death toll continue to surge upwards. In Asia, Europe, and North America, the advanced countries with reasonably good medical facilities have already endured the first wave of the virus. They are beginning to loosen restrictions as their economies were being devastated by the strict lockdowns.  

The next month will tell if the relaxation of restrictions was premature or not. The virus has been the leading cause of death in the US since mid-April, killing approximately 100,000 people. By comparison, China says that only 4,600 people have died of the infection and maintain that the epidemic is mostly under control.

There is little doubt that the virus has already made significant changes in the global economy and will likely continue to do so for the foreseeable future. The pandemic is now making its way into the crowded, less developed countries where some 3-4 billion live. Infections from the virus can only stop when a vaccine is developed and widely administered. A “herd” immunity arises after much of a given population has already contracted the virus and survived.

Disparities are arising as the rate of fatalities caused by the coronavirus in the countries where it has been widespread varies. China has recorded fewer than 5,000 deaths, which translates to three deaths per million inhabitants. Japan has around seven per million, Pakistan six, South Korea and Indonesia five, India three, and Thailand fewer than one per million. Compare that with about 100 deaths per million in Germany, about 180 in Canada, nearly 300 in the United States, and more than 500 in Britain, Italy, and Spain. While these disparities may be the result of better disease control or inaccurate reporting, some are starting to wonder if the genetic makeup might of different peoples may have something to do with the virus’ lethality.

United States: The White House has taken the unusual step of not releasing an updated economic forecast for the rest of the year. The US economy shrank at a faster-than-expected annual rate of 5 percent during the first quarter and is a project to contract some 6-7 percent as the year moves along. An unprecedented 41 million Americans have filed for unemployment benefits since shutdowns began in mid-March. 

Some optimistic publications such as The Wall Street Journal are telling us that “For Economy, Worst of Coronavirus Shutdowns May Be Over,” but it is still too early to say whether there will be another surge in the epidemic. Evidence is accumulating that suggests that much of America is even more inclined to stay at home rather than return to normal activities. 

China: Beijing’s economy continued its slow recovery from the coronavirus slump in May, with better sentiment among companies tempered by the grim outlook for increasing exports. Industrial output expanded in April, while consumption and imports continued to shrink. How those factors play out will be crucial, as Beijing is heavily dependent on exports for growth.

President Xi Jinping said China’s annual economic growth target could have been set around 6 percent had the new coronavirus epidemic not happened. “If we rigidly set one (GDP target), then the focus will be on strong stimulus to hit the growth rate, which is not in line with the purpose of our economic and social development,” Xi said. China has been reluctant to flood its economy with easy credit in recent years. A slowdown persisted, even before the coronavirus outbreak, wary of debt risks caused by a massive stimulus.

The latest escalation between the US and China could compromise US energy sales worth $52 billion that China pledged to make over the next few years. “China could be well short of its purchasing obligations for politically important agriculture products and energy goods,” energy consultancy ClearView Energy Partners told Bloomberg. “President Trump might see more political upside in scapegoating China for the spread of Covid-19 than preserving the compact.” The terms of the Phase 1 trade deal included the addition of US energy exports to China worth some $18.5 billion this year and another $33.9 billion in 2021.

The US moved against China on two fronts last week, with Secretary of State Pompeo declaring Hong Kong no longer autonomous from China and the House of Representatives authorizing sanctions against Chinese officials for abuses against Muslim minorities. Other bills in the pipeline would target Huawei Technologies Co., Chinese companies listed in the US, and banks that do business with Chinese officials who interfere in Hong Kong’s affairs. President Donald Trump has numerous policy options, from sanctions on officials and companies to effectively treating Hong Kong no differently from the Chinese mainland. The worst-case scenarios have potentially massive implications, and China has vowed to strike back.

China officially has the broad power to quash unrest in Hong Kong, as the country’s legislature on Thursday nearly unanimously approved a plan to suppress subversion, secession, terrorism, and seemingly any acts that might threaten national security in the semiautonomous city.

Russia: President Putin has tasked the government with implementing a set of measures to support the oil industry for the duration of the OPEC+ production cut agreement. The proposals include not sanctioning companies that stray outside their production quotas and a temporary lifting of penalties for state oil companies for not sticking to their 2020/2021 investment programs. 

As part of the OPEC+ deal, Russia pledged to cut its production to 8.5 million b/d in May and June from a February 2020 baseline of some 11 million b/d, which translates into more than 2 million b/d, or 19 percent. Many are skeptical the country would stick to its quota given its track record with the previous OPEC+ agreements. The oil price crisis is severe enough to have spurred Russia’s oilfield operators into fast action, with Deputy Energy Minister Pavel Sorokin saying earlier last month that Moscow expects to achieve “the maximum reduction level as soon as practicable.” 

The Russian energy ministry expects the global oil market to balance in June or July as a result of rising consumption and the decline in production in OPEC+ and other countries. The ministry estimates that 14-15 million b/d of oil has already left the market due to the OPEC+ deal. The surplus is currently around 7-12 million b/d, but the ministry expects that in June or July, the market will balance thanks to rising consumption. The department estimates that although demand for oil in May continues to be low, it is up around 20 percent from April.

As the world’s biggest energy exporter, Moscow’s economy is heading for its deepest slump in more than ten years due to the coronavirus’s fallout. Analysts at the Kremlin-funded Skolkovo Energy Center warned this month that the nation faces years of economic stagnation as demand for its carbon-heavy exports gradually drops. If Russia doesn’t adapt, budget receipts will “decline drastically” and growth may be limited to less than 0.8 percent a year for the next two decades, less than a third of what the Economy Ministry is targeting.

As the weeks rolled on, Russia’s pandemic numbers have increased to more than 400,000, the world’s third-largest number of confirmed cases after the United States and Brazil. Putin’s centralized power structure cannot handle the crisis alone. The president delegated much of the epidemic to regional officials, who were frightened of drawing attention to local problems and risking Moscow’s wrath. A sure way to stay under the radar is to understate cases or deaths, analysts say. 

India: Coronavirus cases are skyrocketing, putting it among the world’s most worrisome pandemic zones. Nonetheless, India is reopening, lifting its lockdown at what experts fear may be the worst time. Migrant workers are becoming infected at an alarming rate, leading to fresh outbreaks in villages across northern India. Public hospitals in Mumbai are so overwhelmed that patients have taken to sleeping on cardboard in the hallways. If India does not find a way to curb the virus in high-risk states, epidemiologists project that its total caseload, now at 180,000, could approach a million within weeks.

But in India, a nation of 1.3 billion people, locking down has posed different challenges than in many Western societies. Its metro areas are among the world’s densest, with millions living in packed slums, sometimes sleeping eight to a room. The resumption of cross-country transportation and industry last week has raised the prospect that previously spared states may find themselves confronted with imported outbreaks.

5.  Renewables and new technologies

Hydrogen is emerging as a fuel of the future in a growing number of European countries, including the Netherlands, Germany, and Portugal. The EU’s growing renewable energy output could also be used for emission-free production of the fuel. The world’s most climate-ambitious stimulus package to be unveiled on Wednesday is poised to allocate tens of billions of euros for hydrogen technology as well as infrastructure.  
 
As the costs of photovoltaic cells and wind turbines have significantly decreased, decarbonizing the economy has become increasingly attainable. The wealthier countries of northern Europe are, arguably, some of the most ambitious societies when it comes to the energy transition.
 
French fuel company Air Liquide just released a new product in the US that could make hydrogen closer to competitive with gasoline and diesel fuel stations. Its dual filling positions are capable of fueling 250 vehicles per day. Hydrogen fueling stations that have been installed in the US, Europe, Japan, and South Korea have been quite limited in available fuel pumps — and the supply of hydrogen. 
 
Researchers at Graz University in Austria, together with the Graz-based Rouge H2 Engineering, have developed a cost-effective process for the decentralized production of high-purity hydrogen using chemical looping. The Austrian development effort resulted in a compact and space-saving on-site, on-demand (OSOD) system for filling stations and energy plants. It is being developed and distributed by the Graz-based start-up Rouge H2 Engineering. Hydrogen is produced by converting biogas, biomass, or natural gas into syngas. The provided energy is then stored utilizing a redox process (reduction-oxidation process) in metal oxide, which can be stored and transported without any losses or safety risks,
 
South Korea has made public a long-term energy plan that stipulates a shift to more renewable energy at the expense of fossil fuels and nuclear power. The Korea Herald reports that the plan envisions renewable power to rise to 40 percent of the country’s energy mix in 2034, up from 15.1 percent. In the meantime, the share of liquefied natural gas-fired power generation should decline from 32.3 percent to 31 percent. At the same time, all coal-fired power plants whose 30-year lifecycles expire by 2034 will be retired. This makes about 30 plants, out a total of 60 currently in operation.
 
MagniX and AeroTEC announced the successful flight of an all-electric Cessna Grand Caravan 208B. The successful flight of the eCaravan used a 750-horsepower battery-powered motor. The iconic Caravan has been a workhorse moving people and transporting goods on short routes for decades.

6.  The Briefs (date of the article in the Peak Oil News is in parentheses)

Euro LNG hit: Unquestionably, the current global health situation will cause a severe economic crisis not seen since the Great Depression. This is already apparent in the dramatic decrease in demand for fossil fuels. Oil is hit especially hard as 60 percent of consumption stems from activities such as driving and flying. The demand for natural gas has fared slightly better with a lower decrease. However, storage in one of the most critical gas markets of the world, Europe, is quickly filling up. (5/28)
 
Air France-KLM has started talks with unions to reduce staff as part of a restructuring to be unveiled in the coming months — a plan that also calls for a 40 percent cut in French domestic capacity by the end of next year. The company’s Dutch arm, KLM, has already set a voluntary departure plan for all employees starting June 1. (5/27)
 
Lufthansa, which talks with the German government over a 9 billion euro ($9.8 billion) bailout, will resume flights to 20 destinations from mid-June, including some holiday hot-spots, a spokeswoman said on Sunday. The flight expansion comes less than two weeks after Lufthansa unveiled plans to resume more flights. It begins to restore business that was virtually shut down by the coronavirus crisis. (5/25)
 
According to a decree published on Russia’s government portal on Monday, Russia is banning imports of refined oil products, including gasoline, diesel, and jet fuel, to protect its refining industry from cheap imports. The ban will be in effect until October 1. (5/26)
 
India’s fuel demand, which had crashed by 60 percent during the early days of its two-month lockdown, is set to reach pre-coronavirus levels in June, Indian Oil Minister Dharmendra Pradhan told Times of India over the weekend. In May, demand for fuel in the world’s third-largest oil importer is back at 65 percent compared to May 2020. (5/26)
 
Japan’s estimated gasoline demand in May fell to the lowest monthly level in 37 years. Consumers refrained from traveling at the beginning of the month, a period when driving activity typically peaks due to public holidays. Local refiners and traders remained cautious about the gasoline demand recovery prospect in June. People may not go out amid concerns over the coronavirus infection despite the recent lifting of the state of emergency. (5/28)
 
Japan’s government maintained its view that the economy continues to worsen sharply even as a federal state of emergency was lifted this week, allowing businesses to start the slow process of reopening from shutdowns. Activity will resume gradually, but “a tough situation is expected to continue,” the Cabinet Office said Thursday. (5/28)
 
Latin America’s largest airline LATAM sai, on Tuesday, the company and its affiliates in Chile, Peru, Colombia, Ecuador, and the US have filed for Chapter 11 bankruptcy protection in the United States. LATAM is the latest corporate victim of the coronavirus pandemic that has brought a virtual halt to air travel. (5/26)
 
The US oil rig count fell by 15 to 222, compared to 800 oil rigs last year, Baker Hughes reported. Gas rigs dropped by 2 to 77, compared to 184 last year. The total rig count—301—is down roughly 70 percent over the previous 12 months. (5/30) 
 
The downturn in the US oil industry could lead to more than $24 billion of lost GDP for Texas if oil prices remain in the $30s. The oil price collapse, the production curtailments, and the budget cuts have already resulted in layoffs in the industry. More job losses and oil and gas company bankruptcies are coming. (5/27)
 
Bankruptcies to spike:  Around 70 companies are on track for bankruptcy by the end of the year with WTI averaging $30 per barrel, according to Rystad Energy. If WTI remains stuck at $30, that total will rise to 150 to 200 by 2021. (5/30)

Renewables trump coal: The US consumed more renewable energy than coal last year for the first time since 1885, according to the EIA. The inflection point mainly reflects a steep drop in the use of coal as a source of electricity and steady growth in wind and solar power, trends driven by economic and environmental factors. (5/29)
 
Power slowdown: The International Energy Agency’s executive director said Thursday that with a historic $400 billion decline in overall energy investment in 2020 expected, the global power sector would account for almost $80 billion of that, “a record 10 percent drop that takes spending down to the level it was at a decade ago.” (5/29)
 
India’s locust plague: As if India needed more challenges, with coronavirus infections steadily increasing, a heatwave hitting the capital, a recent killer cyclone, and 100 million people out of work, the country now has to fight off a new problem: a locust invasion. Scientists say it’s the worst attack in 25 years, and these locusts are different. (5/28)
 
Impact on India: About 42,000 hectares (104,000 acres) of cotton, summer pulses, and vegetable crops have been affected by locusts across six states, mainly in Rajasthan. (5/28)
 
Climate confab delayed: The United Nations “Cop26” Climate Change Conference in Glasgow has been officially postponed for a year and is now expected to take place the first two weeks of November during 2021. (5/29)
 
Ocean warming: Rates of climate change in the world’s ocean depths could be seven times higher than current levels by the second half of this century, even if emissions of greenhouse gases were cut dramatically, according to new research. Different global heating at different depths could have significant impacts on ocean wildlife, causing disconnects as species that rely on each other for survival are forced to move. (5/27)
 
Climate researchers are racing to calculate how fast and how high the sea level will rise found new clues on the seafloor around Antarctica. A study released last week suggests that some of the continent’s floating ice shelves can, during eras of rapid warming, melt back by six miles per year, far faster than any ice retreat observed by satellites. As global warming speeds up the Antarctic meltdown, the findings “set a new upper limit for what the worst-case might be. (5/30)
 
Court climate fight: California cities and counties cleared an essential hurdle in their legal battle to get significant oil companies, including BP, Exxon Mobil, and Chevron, to pay tens of billions of dollars to deal with the effects of climate change. (5/27)
 
US dam safety: More than 15,000 dams in the US would likely kill people if they failed, and at least 2,300 are in a weak or unsatisfactory condition, according to recent data from the federal government’s National Inventory of Dams. The problem will only become more severe as the climate crisis disrupts rain patterns. The average age of a US dam is 57 years, and many – like the Michigan dams that failed – were built in the early 20th century, when states had not yet set safety standards. (5/27)
 
VW’s dieselgate wrap: Five years after the massive Dieselgate scandal made global headlines, a German court is now ready to wrap up the case against Volkswagen, ordering the automaker to pay out as much as €750,000,000 in damages. The court has ruled that Volkswagen must buy back vehicles from owners of its diesel cars and trucks equipped with software that deceived emissions testing. The judgment will force the company to re-purchase over 60,000 vehicles, totaling more than 750 million euros. (5/26)
 
UK car crash: Automakers in the UK produced the fewest vehicles in any month since the World War II-era in April after the coronavirus pandemic led to lockdowns that shuttered factories. Production fell 99.7 percent to a measly 197 cars for the month, the Society of Motor Manufacturers and Traders said Friday in a statement. Several factories stopped vehicle output altogether in April and instead began churning out personal protective equipment, including face shields, visors, and medical gowns. (5/29)
 
UK tweaks China: After Beijing announced plans this week to proceed with the imposition of a national security law on Hong Kong, UK foreign secretary Dominic Raab retaliated with an “unprecedented” pledge to expand visa rights for British National (Overseas) passport holders in Hong Kong from six to 12 months and “provide a pathway to future citizenship”. (5/30)