Daily Energy Report
Saudi oil export cuts, Critical minerals for energy, China commodity conundrum, Iran’s oil output/US talks, China spends on coal, Brazil’s oil/green choice, US cash for EV factories, and more.
Chart of the Day: Saudi Arabia cuts crude exports by 2 mb/d!
Summary
Figure (1) above shows weekly crude oil exports by Saudia Arabia year-over-year since 2019. The Saudi export cut is not only large, the latest exports are that it is the third lowest since 2019, and the first two are in 2020 when OPEC+ cut production by 9.7 mb/d.
EOA’s Main Takeaway
Global oil markets are affected by export cuts, not by production cuts. The Saudi export cuts are large. Current export levels are close to those in 2020 during the lockdowns. If Saudi Aramco maintains the current cuts to the end of the year, the outcome will depend on the performance of the Chinese economy. Any improvement above what we have seen in the last two months will tighten the oil market.
A side point: as we showed in yesterday’s report, the Russian oil export cuts were also large.
Story of the Day
Energy Monitor: Top 10 Critical Minerals are Powerhouses of Energy Transition
Summary
The energy transition's most pivotal minerals are lithium, cobalt, copper, and nickel. Lithium, vital for lithium-ion batteries in electric vehicles and storage systems, is especially crucial. While Australia and Chile have the largest current lithium reserves, the 'lithium triangle' of Bolivia, Argentina, and Chile holds vast identified resources. This region could potentially position South America as a key economic player in the energy transition, akin to the Middle East's role in the oil era.