The U.S. Energy Information Administration (EIA) expects U.S. crude oil production to drop next year, according to its latest short term energy outlook (STEO), which was released on September 9. In its September STEO, the EIA projected that total U.S. crude oil output, including lease condensate, will average 13.44 million barrels per day in 2025 and 13.30 million barrels per day in 2026. This output came in at 13.23 million barrels per day in 2024, the STEO highlighted. The STEO showed that Lower 48 states, excluding the Gulf of America, will provide 11.18 million barrels per day of the projected total in 2025 and 10.96 million barrels per day of the projected total in 2026. Of this 11.18 million barrel per day figure, the STEO expects 6.52 million barrels per day to come from the Permian region, 1.20 million barrels per day to come from the Bakken region, 1.12 million barrels per day to come from the Eagle Ford region, 0.19 million barrels per day to come from the Appalachia region, 0.03 million barrels per day to come from the Haynesville region, and 2.12 million barrels per day to come from the “rest of [the] Lower 48 states”. In 2026, the STEO sees 6.41 million barrels per day coming from the Permian region, 1.20 million barrels per day coming from the Bakken region, 1.10 million barrels per day coming from the Eagle Ford region, 0.17 million barrels per day coming from the Appalachia region, 0.03 million barrels per day to come from the Haynesville region, and 2.05 million barrels per day to come from the “rest of [the] Lower 48 states”. The EIA’s latest STEO showed that, in 2024, the Permian region produced 6.30 million barrels per day, the Bakken region produced 1.23 million barrels per day, the Eagle Ford

Aramco announced, in a statement posted on its site recently, that it has signed an $11 billion lease and leaseback deal involving its Jafurah gas processing facilities with a consortium of international investors. The consortium is led by funds managed by Global Infrastructure Partners (GIP), a part of BlackRock, Aramco highlighted in the statement. As part of the transaction, a newly formed subsidiary, Jafurah Midstream Gas Company (JMGC), will lease development and usage rights for the Jafurah Field Gas Plant and the Riyas NGL Fractionation Facility, and lease them back to Aramco for a period of 20 years, the statement noted. JMGC will receive a tariff payable by Aramco in exchange for granting Aramco the exclusive right to receive, process, and treat raw gas from Jafurah, Aramco said in the statement, which highlighted that the company will hold a 51 percent majority stake in JMGC, with the remaining 49 percent held by investors led by GIP. The transaction will not impose any restrictions on Aramco’s production volumes, according to the statement. Aramco noted in the statement that the deal is “expected to close as soon as practicable, subject to customary closing conditions”. Jafurah is the largest non-associated gas development in the Kingdom of Saudi Arabia, Aramco highlighted in the statement, pointing out that it is estimated to contain 229 trillion standard cubic feet of raw gas and 75 billion Stock Tank Barrels of condensate. In the statement, Aramco described Jafurah as a “key component in Aramco’s plans to increase gas production capacity by 60 percent between 2021 and 2030, to meet rising demand”. Aramco President and CEO Amin H. Nasser said in the statement, “Jafurah is a cornerstone of our ambitious gas expansion program, and the GIP-led consortium’s participation as investors in a key component of our unconventional gas operations demonstrates

Ukraine attacked the Saratov crude-oil refinery in Russia’s Volga region overnight as Western nations seek to push President Vladimir Putin to the negotiating table. Explosions and a fire were registered in the vicinity of the plant, Ukraine’s General Staff said in a Telegram statement on Tuesday, adding that details of the damage are being clarified. The claim couldn’t be independently verified by Bloomberg. Russia’s largest oil producer Rosneft PJSC, which owns the refinery, didn’t respond to a request for comments. Since last month, Ukrainian military forces have intensified drone attacks on Russian energy facilities, including oil refineries, aiming to curb fuel supplies to the front lines. Last week, drones also hit Russia’s largest Baltic oil terminal in Primorsk and claimed strikes on pumping stations feeding another Baltic hub, the Ust-Luga terminal. So far this year, Ukrainian forces targeted oil-processing facilities accounting for around half of all Russian refining capacity, according to Bloomberg calculations. Yet the actual amount of fuel-supply disruption is lower than that. Goldman Sachs Group Inc. estimated that since the start of August the strikes took offline about 300,000 barrels a day of Russian refining capacity. That’s more than 5 percent of the nation’s total active oil-processing capacity, according to Bloomberg estimates. The actual supply disruptions may be less than that as refineries often manage to repel the attacks or minimize their impact, carrying out repairs as quickly as possible. Still, repeated focused strikes on refineries have exacerbated Russia’s seasonal fuel shortage, forcing the government to ban gasoline exports and divert some diesel to the domestic market. Reuters said that, following the recent drone attacks, Russia’s crude-pipeline operator Transneft PJSC has informed the nation’s producers about reducing the volumes of crude it accepts for storage and warned it may reduce oil intake if its infrastructure incurs further damage. Transneft

State-owned Israel Natural Gas Lines Ltd (INGL) signed an agreement to allow the Chevron Corp-led Leviathan consortium to use the planned Nitzana pipeline to ship more natural gas from the Israeli offshore field to Egypt, Leviathan co-venturer NewMed Energy LP said Tuesday. Israel’s government approved the Nitzana Project, which consists of the onshore pipeline and supporting infrastructure, about two years ago, as announced by the Energy and Infrastructure Ministry May 8, 2023. Designed to raise Israel’s capacity to export gas to the North African country by six billion cubic meters (211.89 billion cubic feet), the pipeline will stretch about 65 kilometers (40.39 miles) from the Ramat Hovav area to the Egyptian border near Nitzana, according to the ministry’s announcement. Israel’s Natural Gas Authority has allotted at least 33.33 percent or 140 million British thermal units (MMBtu) of the pipeline’s capacity to the Leviathan group, according to NewMed Energy, Leviathan’s biggest owner. On September 1 the Leviathan partners told the Natural Gas Authority and INGL they are prepared to bear the full cost of the Nitzana pipeline’s construction in exchange for 100 percent of the pipeline’s capacity should the other exporters do not exercise their rights to receive an allocation, NewMed Energy said in a regulatory filing Tuesday announcing the Transmission Agreement between Leviathan operator Chevron and INGL. Under the Transmission Agreement, the Leviathan group’s expected share of the Nitzana Project’s budget of approximately $610 million is $92 million, assuming a pipeline capacity allocation of 33.33 percent. Additionally, “Chevron shall pay a transmission tariff comprising a capacity fee and a throughput fee for the gas quantity actually transmitted, in accordance with the standard transmission tariffs in Israel”, NewMed Energy said. “INGL undertook to provide interruptible transmission services of additional quantities of gas over and above the Basic Capacity [140 MMBtu], subject

INPEX Corp has awarded Aquaterra Energy Ltd analysis contracts to support the Japanese oil and gas company’s drilling campaigns offshore Indonesia. “Under the contract, Aquaterra Energy will deliver multi-phase conductor and riser analysis for a series of deepwater wells in water depths ranging from 600 to 800 meters, providing technical input to support decision-making at the earliest stages of project development”, Norwich, England-based Aquaterra said in a press release Tuesday. “The scopes of work, awarded following competitive tender, include structural analysis and the definition of operating envelopes, technical limits covering weather conditions, rig movement and fatigue. These inputs will help shape INPEX’s planning process, including considerations such as rig selection and equipment specification. “Aquaterra’s early involvement will play a key role in helping define safe operating limits, giving INPEX greater confidence in its technical planning ahead of drilling”. Aquaterra said it will deliver the works over the next six months. “These latest awards follow a series of recent long-term offshore analysis wins globally – including in the UK, Qatar and Egypt – and reflect growing demand from operators for early technical input that supports effective offshore energy project delivery”, Aquaterra said. Aquaterra chief executive George Morrison said the INPEX contracts “reflect the growing demand across the APAC [Asia-Pacific] region for trusted technical insight at the earliest stages of offshore planning”. INPEX is part of a consortium that recently signed a production sharing contract (PSC) for an area off the coast of the Indonesian province of East Java. The Serpang PSC spans 8,497.73 square kilometers (3,280.99 square miles). The water depth is up to 100 meters (328.08 feet), according to INPEX. “The Serpang Working Area is situated in a location where several oil and gas fields have been discovered, approximately 200 kilometers east of Surabaya, the capital city of East Java Province”, INPEX said

Oil, fundamental analysis Crude prices hovered in a tight $2.30/bbl range this week as indecision on direction led to consolidation. The market ebbed and flowed with bearish fundamentals pitted against bullish geopolitical events. Attacks, and threats of more sanctions, were pitted against output increases and an across-the-board crude and product inventory build in establishing price direction. Ultimately, the bulls won out. WTI was as low as $61.70/bbl on Friday with its high on Wednesday at $64.10. Brent crude also hit its high on Friday at $68.15/bbl but its low was Monday at $65.50/bbl. Both grades settled higher than last week’s levels while the WTI/Brent spread has widened to ($4.55). Prices fell Monday after the OPEC+ group’s Sunday decision to increase output by 137,000 b/d next month. However, given the smaller volume than the previous increases and, the fact that historically, the group has failed to meet the new quotas, the market actually closed higher than the previous Friday. Tuesday’s Israeli attack on Hamas targets in the heart of Qatar sent prices rallying while Russia’s violation of Poland’s airspace only added more geopolitical drama to the week. The drones were shot down by NATO planes. This week, the UK put sanctions on those who are shipping Russian crude to effectuate an actual curtailment of the flow of Urals to other countries. While Ukraine has attacked various oil ‘infrastructure’ sites in Russia, they have thus far not impacted supply or demand to a great extent. However, the recent drone attack on the Baltic Sea port of Primorsk, a key oil tanker loading facility, could hamper Russian exports. The International Energy Agency (IEA) in Paris raised its forecast for the growth in global oil demand by 60,000 b/d to 740,000 b/d this year. However, the agency also increased its supply forecast for this