Trafigura’s Post

In recent years, I've discussed the potential decline of the Petrodollar's status. Well, it's happening! The UAE has recently became a part of BRICS, solidifying its position as the 7th largest oil producer globally. Consider this: they're presently hosting the 28th UN Climate Change Summit (COP28) in Dubai, attended by representatives from over 200 countries. At the helm of this conference stands Sultan al-Jaber, the chief executive of the UAE state-owned oil company, Adnoc. The timing of this announcement, made just before the summit, seems more than mere coincidence to me. It's a significant development worth noting. According to reports, the UAE is in talks with 15 countries and is promoting local currency payments ending reliance on the U.S. dollar. The realigning of bilateral strategic partnerships could lead to a paradigm shift in the financial approach of BRICS countries. Controlling the global oil sector by ending reliance on the U.S. dollar could make BRICS turn into an economic powerhouse. The United Arab Emirates (UAE) is asking BRICS countries to settle oil trade in local currencies and not the U.S. dollar. The Middle Eastern nation is aiming to diversify its economic partnerships by renewing payment methods for oil trade deals. The UAE is approaching China, Russia, India, and Egypt, among other nations to pay local currencies for oil settlement and sideline the U.S. dollar.

The petrodollar has been a major factor in establishing the $ as the world's dominant reserve currency. As countries start trading oil in other currencies, demand for the US dollar will decrease, weakening its global position. The petrodollar benefits the USA in many ways not least the ability to run larger trade deficits and reduce currency risk. A decline in the petrodollar will also impact these advantages, potentially leading to higher interest rates, inflation, or 'just' a weaker currency. This is not a drill...

Singapore’s Oil Party Spoiled by Falling Prices and China Gloom. China’s economic slowdown, structural shifts in the global energy mix and the prospect of additional crude supply are all weighing on refiners and producers. Processing margins have tumbled.

Oil, often referred to as "black gold," has long been a strategic commodity, essential for industrial economies and military power. The late 20th century witnessed a series of conflicts and wars driven by the quest for control over oil resources. The period from the 1970s through the early 2000s was marked by several prominent oil-motivated conflicts, highlighting the geopolitics and the relentless struggle for energy resources. However, recent developments in the global energy arena have shifted the motive for oil-ralated warfare from controlling oil resources to the less predictable outbursts of violence within declining oil economies and spillover of their internal crises into regional conflicts and general instability. Hence, the 2020s will likely be characterized by dramatic geopolitical reshuffles related with the decline of major oil exporting economies who refuse to aknowledge the energy transition.

Recent conflicts in the Middle East and Russia’s invasion of Ukraine have created a delicate situation in the global commodities landscape. While the impact on commodity markets has been restrained so far, a potential escalation could have severe consequences, as outlined in a The World Bank report based on historical experiences since the 1970s. In different disruption scenarios, the report predicts varying degrees of oil price increases. With the world facing these challenges, Nigeria, as a major oil producer, must explore opportunities to reposition its economy amidst the turmoil. THISDAY Adesola Adeduntan https://lnkd.in/etdRW9xw

China’s economic slowdown, structural shifts in the global energy mix and the prospect of additional crude supply are all weighing on refiners and producers.

⚡ 🛢What are the profound impacts of the energy transition? Are they extending far beyond the mere greening of our grids or the shift from internal combustion to electric vehicles? The ripple effects of this transition resonate worldwide, challenging hydrocarbon-exporting nations and contributing to the global upheaval we currently witness. While renewable technologies like solar, wind, and batteries hold promise, the transition entails significant disruptions in energy supply and demand dynamics. Nations reliant on traditional energy exports, such as Russia, Iran, Venezuela, and Qatar, face heightened vulnerability unless they adapt. Opting for technological conservatism, they cling to their market share in oil and gas, raising concerns about the implications for the global economy and geopolitics. Unfortunately, the outlook appears less than optimistic. #EnergyTransition #Geopolitics #RenewableEnergy #GlobalEconomy

Great forward-looking article in the economist. As oil demand wanes, lower cost (ie: Arabian Gulf) producers will dominate production and up to 2/3 of investments by non-Gulf national oil companies could turn out to be unprofitable. That means challenges - and big fiscal worries - for already-stressed countries like Nigeria, Indonesia, and Russia. https://lnkd.in/e8HtDXwM from The Economist

In April 2024, amidst economic shifts and geopolitical tensions, several significant developments unfolded globally. The Bank of England's decision to maintain its interest rates at 5.25% signaled a cautious stance amid inflationary pressures, dampening expectations of a rate cut in June. Meanwhile, Canada's launch of the Trans-Mountain pipeline expansion project marked a pivotal step in reducing reliance on US markets, following years of development and a substantial $25 billion investment. In Japan, a notable decline in LPG imports, attributed to warmer weather conditions, contrasted with stable overall intake. On the geopolitical front, the European Union's contemplation of sanctions against Russia's LNG sector highlighted ongoing efforts to address geopolitical concerns. These proposed measures aim to reshape energy dynamics, potentially impacting global LNG trade routes. Additionally, supply constraints in the European acrylonitrile market, driven by production disruptions and rising costs, underscored challenges in the chemical industry's supply chain. Overall, these developments reflect a complex interplay of economic, environmental, and geopolitical factors shaping global markets in April 2024. Stay informed on these dynamic market shifts! Click on the link, to read more about our latest weekly report: https://lnkd.in/g3tcmzft #BOEinterestrates #CanadaOilExpansion #TransMountainPipeline #OilProductionBoost #JapanLPGImports #LPGDemand #EUProposedSanctions #Propaneimports #RussianLNG #LNGExport #MaritimeSanctions #AcrylonitrilePrices #ChemicalIndustry #OilInfrastructure #OilMarketTrends #PipelineDevelopment #EnergyPolicy #OilTrade #FuelEconomy #OilRevenue #GlobalShipping #EnergySecurity #OilSupplyChain #LPGConsumption #OilMarketAnalysis #EconomicImpact #EnergyInvestment #TradePolicy #MaritimeLogistics #ChemicalSupply #EconomicForecast #MiddleEastTensions #LPGimports #AlternativeEnergy #ChemicalSector #Petrochemicals #EnergyMarket #GlobalEconomy #FinancialNews #MarketUpdate #EconomicTrends #EconomicIndicators #GlobalTradeTrends #MarketAnalysis #EconomicData #ServiceIndustry #OilMarket #MarketInsights #EconomicUpdates #SupplyChain #MarketForecast #Weeklyreport #RLA #WadeMaritimeGroup

Oil’s rally is fueling an intriguing opportunity. We contend the global oil sector is benefiting from improved fundamentals and exposure in equity portfolios can act as an offset to geopolitical risk. https://lnkd.in/gxXKUHCj