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June 22 – Asian crude oil imports are expected to recover to pre-Iranian conflict levels, but refined product supplies remain constrained, and this supply tightness will be reflected in prices. According to data compiled by shipping intelligence firm Kpler, Asia is projected to import approximately 22.18 million barrels per day (bpd) of crude oil in June, compared to 20.35 million bpd in May. June imports are still below the average of 26.76 million bpd in the three months prior to the US-Israel attacks on Iran on February 28. However, this figure is significantly higher than the eight-year low of 18.77 million bpd in April, the month when the effects of Irans effective closure of the Strait of Hormuz during the conflict were most severe. Furthermore, the pre-conflict situation where approximately 20% of global crude oil and refined product shipments transited the Strait of Hormuz is likely to resume, which would allow more oil to arrive in Asia in July.The Russian Ministry of Defense stated that in the past 24 hours, Russian armed forces attacked oil refining facilities in Ukraine, as well as fuel, energy, and transportation infrastructure.On June 22nd, several real estate agencies released data on Shenzhens housing market transactions during the Dragon Boat Festival holiday. Data from Leyoujia stores showed that during the 2026 Dragon Boat Festival holiday, the combined number of new and existing home sales contracts in Shenzhen increased by 17% compared to the 2025 Dragon Boat Festival, reaching the highest value in the past five years; new home sales increased by 9%, and existing home sales increased by 21%. According to Shenzhen Centaline Property, the average daily number of viewings at Centaline stores during the holiday increased by 52% compared to mid-June. As of June 21st, a total of 6,264 new and existing home transactions were completed in Shenzhen in June, including 2,641 new homes (1,670 pre-sale and 971 existing home sales) and 3,623 existing home transfers. Xiao Xiaoping, Dean of the Shenzhen Beike Research Institute, stated that the year-on-year increase in transactions during the Dragon Boat Festival holiday was primarily due to the continued release of policy benefits in the preceding period, coupled with a full window of opportunity for home viewing during the long holiday, leading to a concentrated release of pent-up demand from first-time buyers and those seeking to upgrade their homes. More noteworthy is that, unlike previous years when demand was solely driven by first-time homebuyers, this years market is showing a trend of "simultaneous sales at both ends": the sales of low-priced first-time homebuyers are accelerating, while the proportion of transactions for high-end homes in Nanshan and Futian districts is rising simultaneously. The market is no longer supported by a single customer group; a virtuous cycle has been formed between first-time homebuyers and those upgrading their homes, continuously driving market circulation.Bank of America: It expects the Federal Reserve to raise interest rates by 25 basis points each in September, October and December 2026, compared with its previous forecast that interest rates would remain unchanged this year.On June 22, Berenberg Bank analyst Holger Schmiding stated in a report that the European Central Banks deposit rate is expected to reach 3% by mid-2029 (currently at 2.25%). The institution had previously predicted this level would be reached in 2028. With the interim US-Iran agreement lowering energy costs, overall inflation in the Eurozone could fall below 2% by early 2027. This means the ECB may postpone interest rate hikes until the end of 2028. Schmiding stated that by then, Europes aging population is expected to begin causing labor supply to shrink faster than demand, thereby pushing up wages and forcing the central bank to raise interest rates.

Sources suggest that PetroChina might sell assets in Australia and Canada to stem its losses

Aria Thomas

Jun 29, 2022 10:42


According to two persons with knowledge of the matter, PetroChina may sell natural gas projects in Australia and oil sands in Canada to minimize losses and shift financing to more lucrative regions in the Middle East, Africa, and central Asia.


PetroChina's plan follows a similar strategy shift by a smaller state rival, CNOOC (NYSE:CEO) Ltd, which was prepared to abandon its operations in the United Kingdom, Canada, and the United States because of concern that these assets may become susceptible to Western sanctions.


The transactions are the outcome of an internal examination of PetroChina's global portfolio that began last year, according to two unidentified individuals who refused to be identified due to the sensitivity of the subject.


As it does not own any oil and gas assets in the United States, unlike CNOOC, PetroChina's divestments are driven more by the assets' poor economics than by a fear of U.S. sanctions, but political tensions with Australia and Canada also played a part, they noted.


According to sources, the state-owned oil and gas firm intends to sell some of these assets, which have lost billions of dollars and are situated in uncompetitive locations, over the next two years.


"Australian gas assets Arrow Energy and Browse are among the top "negative assets" in PetroChina's global portfolio. According to one report, CNPC has a small competitive edge in this industry.


In 2010, PetroChina purchased Arrow Energy for $2.5 billion in a joint venture with Shell (LON:RDSa), marking its first investment in Australia's coal seam gas sector. It paid $1.63 billion in 2013 for BHP's investment in Browse, the largest undeveloped gas reservoir in Australia.


According to reports, the company is also contemplating selling its Canadian oil sands assets, MacKay River Oilsands and Dover (NYSE:DOV) Oilsands, owing to losses incurred from producing and processing bitumen. PetroChina declined to comment.


China's state-owned energy companies were among the most acquisitive in the industry during the beginning of the 2010s, as shown by CNOOC's $15 billion purchase of Canadian oil and gas company Nexen in 2013. However, they grew more subdued with the oil price fall in 2014-2015 and the government's financial audit.


In addition, economic worries may have caused PetroChina to reevaluate its acquisitions spree.


Arrow is PetroChina's most unprofitable offshore investment. If Browse receives final approval, it is unlikely to enter production until 2030 because to its technical complexity.


In 2020, Arrow made a final investment decision to construct the 5 trillion-cubic-foot Queensland Surat Gas Project. A dispute between PetroChina and Shell over the pricing of gas to a Shell-operated export facility reportedly caused the delay.


Arrow experienced losses of about A$3.3 billion ($2.29 billion) between 2018 and 2021, including A$2.2 billion in impairments.


When reached by Reuters, a representative for Arrow said, "The investment decisions of our shareholders are their responsibility, and Arrow would neither comment nor speculate on such topics."


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