Oil Tanker and Container Shipping Rates Hit Record Highs

By ZeroHedge - Jan 26, 2024

• Shipping rates for clean tankers and containers have reached nearly $100,000 per day due to disruptions in the Red Sea.
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• The blockage has led to increased freight costs, particularly for oil and container shipments, impacting global trade routes.
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• This situation has resulted in inflationary pressures and concerns about the sustainability of current shipping rates and the potential impact on the global economy
• 
  

One month ago, when it first became apparent that the Red Sea blockage by Iranian proxies would prove to be a prolonged affair, we warned that "Red Sea Blockage Means A New Round Of Surging Cost-Push Inflation", which got confirmation just a few days later when we showed the sudden spike in container shipping rates that used the Suez Canal as a transit choke point.

That, as we strongly suspected, was just the beginning, and according to Bloomberg, a key Clean Tanker rate tracked by the Baltic Exchange, has exploded to almost $100,000 a day on the Red Sea disruptions.

Specifically, the cost of shipping fuel on a route that mostly hauls naphtha from the Middle East to Japan surged (again) on Wednesday, with the daily charter earnings climbing 18% to $98,000/day, the highest since May 2020. Meanwhile, earnings for smaller ships sailing from the Middle East to Japan route rose 22% to $75k/day, also the highest since May 2020.

The charts of the day from the latest Goldman Oil Tracker (full report available to pro subscribers in the usual place) shows something similar, if slightly less dramatic: the first shows that oil flows through the Bab-El-Mandeb continue to deteriorate, and remain down 1.2mb/d (or 20% on a 14DMA Basis) since disruptions started on December 18th, 2023 and down 2.4mb/d (or 33%) from the pre-disruption 2023 average.

At the same time, Goldman's indices of global freight rates for clean and dirty oil tankers have risen 1$/bbl (16%) and 0.8$/bbl (25%), respectively since the disruptions began. The impact of Red Sea disruptions on volumes through the Red Sea and on freight rates is significantly larger for containers transporting goods than for oil tankers (and certainly for US and European ships than for Chinese and Russian ones).

Paradoxically, the more moderate impact on oil flows reflects the lower physical risk from a Red Sea journey - as many oil tankers are from Russia and the Middle East, both of which are on the Houthi "friendly" list - and a greater cost of delaying the delivery through a longer alternative journey.

The bottom line is that the Red Sea blockage is - despite the best wishes of cecntral bankers everywhere who can't wait to start cutting rates ahead of the record avalanche of elections this year - becoming a huge inflationary headache for global freight. Furthermore, as LoadStar reports, container spot rates from Asia to the US and Europe continued to soar this week as any solution from the toothless (both literally and metaphorically) Biden regime to the attacks on shipping by Houthi rebels looks increasingly unlikely.

Moreover, reports to The Loadstar suggest that some shippers of low-rated contract cargo are seeing their allocations slashed by up to 80% by their carriers, forcing them onto the spot market.

Xeneta’s XSI Asia-North Europe spot component jumped 25%, for an average of $4,612 per 40ft, representing a month-on-month increase of nearly 200%.

However, for shipments before the Chinese New Year, which commences on 10 February, some carriers are touting rates in excess of $10,000 per 40ft. One UK-based NVOCC director told The Loadstar he had decided only to ship his most urgent boxes before CNY, on the basis that rates should go down in the traditionally slack period following the holiday.

“The lines have plenty of ships and demand is still not that strong, so once the longer transits get baked into their schedules, I can’t see any reason why rates would stay high,” he said.

Meanwhile, Mediterranean shippers are not only facing huge delays in containers arriving from Asia, but are seeing the cost of spot freight rates leap to more than $6,500 per 40ft, from $2,300 at the end of December.

Elsewhere, transpacific spot rates from Asia to North America are “out of control”, according to a UK forwarder contact currently in Shanghai.

“The lines are charging what they like at the moment, whether that is to the west or east coast, the market has been taken over by a return of the pandemic ‘fear factor’ of not getting product shipped,” said the forwarder.

Unfortunately, it's only getting worse as transpacific carriers are still in the process of raising their rates, with further FAK (freight all kinds) hikes planned for 1 and 15 February.

Drewry’s WCI Asia to US west coast spot shot up 38% this week, to an average of $3,860 per 40ft, while its east coast spot climbed 35%, to $5,644 per 40ft, respectively 88% and 64% higher than for the same week of last year.

Vespucci Maritime’s Lars Jensen commented: “It would appear that the carriers’ ability and shippers’ de facto willingness to accept steep increases matches the behaviour we saw in the pandemic.”

The silver lining is that for now at least, the contagion has not spread to transatlantic spot rates, which were mostly flat this week, with the XSI North Europe to US east coast spot stuck at a lowly $1,432 per 40ft (but climbing ever so gradually. And indeed, according to The Loadstar’s contacts, there are “big increases in the pipeline” that will kick in next month.

“With the crazy rates the lines are getting elsewhere I can’t see that the carriers will accept the current transatlantic rates for much longer,” said a Liverpool-based forwarder contact.

By Zerohedge.com

Shell To Convert German Refinery To Base Oil Manufacturing

By Charles Kennedy - Jan 26, 2024

Shell plans to convert its oil refinery at the Wesseling site in Germany into a production unit for base oils, the UK-based supermajor said on Friday.

Shell Deutschland GmbH has taken a final investment decision (FID) to turn the Wesseling site at the Energy and Chemicals Park Rheinland into a manufacturing facility for Group III base oils, used in making high-quality lubricants such as engine and transmission oils. 

Crude oil processing will end at the Wesseling site by 2025 but will continue at the Godorf site at the Rheinland park, Shell said in a statement.

Shell’s Energy and Chemicals Park Rheinland near Cologne is comprised of the Wesseling and Godorf sites. The park currently has the capacity to process over 17 million tons of crude oil a year, of which 7.5 million tons are processed at the Wesseling site.  

The Wesseling base oil plant is expected to start operations in the second half of this decade. It will have a production capacity of around 300,000 tons per year, which would be equal to around 9% of current EU demand and 40% of Germany’s demand for base oils.

The high degree of electrification of the new base oil plant, as well as the ceasing of crude oil processing at the Wesseling site, is expected to reduce Shell’s Scope 1 and 2 carbon emissions – those which come directly from operations and those from the energy to run said operations – by around 620,000 tons annually.  

“This investment is part of Shell’s drive to create more value with less emissions,” said Huibert Vigeveno, Shell’s Downstream and Renewables Director.

Over the past few years, Shell has divested several refineries globally, including the sale of the Martinez Refinery in California to PBF Holding Company, and the sale of its 50% stake in the 340,000-barrels-per-day Deer Park Refinery in Texas to its joint venture partner Pemex.

 

Can China Use Offshore Wind to End Reliance on Foreign LNG and Coal?

And could that make Beijing more open to risk-taking, including vis-à-vis Taiwan?

File image courtesy Mingyang Smart Energy

PUBLISHED JAN 28, 2024 3:25 PM BY THE LOWY INTERPRETER

 

[By Joseph Webster and Zoe Leung]

A worldwide scramble for energy supplies following Russia’s invasion of Ukraine has intensified China’s quest for energy security. The nation is doubling down on all forms of domestic energy generation – from coal to renewables – to lessen reliance on imports.

Major energy exporters to China, including the United States and Australia, have every reason to keep an eye on Chinese offshore wind development. China’s wind-generated power will significantly reduce and potentially eliminate its reliance on Australian thermal coal but is much less likely to remove China’s liquefied natural gas (LNG) needs.

China’s offshore wind push

China’s primary energy policy objectives are security of supply and affordability, both of which have been affected by worldwide energy shortages triggered by surging post-Covid demand and supply disruptions from Russia’s invasion of Ukraine. Offshore wind electricity production is generated domestically, lessening China’s dependency on imported energy, especially as Chinese firms are dominant throughout wind supply chains.

Chinese offshore wind production enjoys strong economic and technical fundamentals. China’s southern coastal provinces have some of the world’s strongest offshore wind speeds. These provinces have comparatively high electricity prices yet relatively weak solar and onshore wind potential, and are far from domestic coal and natural gas production. Finally, China’s lavishly subsidized turbine manufacturing, shipbuilding, and steelmaking industries synergize with offshore wind.

But the push to develop offshore wind also has political elements.

China’s unrelenting offshore wind push supports China’s dual circulation strategy to shield its economy from external shocks while boosting indigenous innovation. Offshore wind generation is prominent in China’s current five-year plan lasting to 2025, which calls for mastering deepwater wind technologies and developing low-frequency power transmission systems to facilitate high-capacity offshore facilities. It also sets guidelines for large-scale offshore wind turbine demonstration projects. The development is also central to the country’s plan to build a “new energy system”, which highlights this decade as a period of “accelerated transition” on the way to China’s 2045 and 2060 goals.

These plans incentivize Chinese coastal jurisdictions to develop their offshore wind potential. Building local power generation is highly attractive to municipal governments, which own the rights to develop maritime resources. Moreover, local production leaves them less dependent on other provinces for electricity – and therefore less vulnerable to China’s extremely fraught inter-provincial power trade.

Coal imports are on the way out – LNG is here to stay

China’s offshore wind industry is massive, poised to grow further, and will enable coastal regions to displace coal consumption – and imports.

In 2022, coal accounted for 55 percent of China’s primary energy consumption and 61 percent of its overall electricity mix. China is also largely self-sufficient in metallurgical coal used for steelmaking but imports the thermal coal used for electricity generation, especially in southern provinces.

China’s offshore wind development will, all things being equal, reduce its needs for imported and domestically produced thermal coal for electricity generation. This will be especially true during winter, when China’s offshore wind speeds and generation peak.

Interestingly, China has also stockpiled record levels of coal, with inventories tripling in the past two years, according to Australia’s Department of Industry, Science and Resources. China’s development of offshore wind and other renewables, as well as its stockpiling of coal inventories, may enable it to zero out coal imports much faster than many anticipate. A 2021 Australian National University paper by Jorrit Gosens, Alex Turnbull, and Frank Jotzo predicting reduced Chinese overseas coal imports appears highly prescient.

China’s offshore wind electricity generation will reduce thermal coal consumption, pollution and carbon dioxide emissions. These are highly positive developments.

At the same time, and less favorably, China’s development of offshore wind and other renewables will lessen its reliance on energy imports. Consequently, Beijing might become more risk-seeking, including vis-à-vis Taiwan.

Offshore wind could also impact China’s natural gas imports, as coastal provinces that rely on LNG for power generation will, all things being equal, reduce imports as offshore wind generation rises. Offshore wind electricity generation cannot replace all of China’s natural gas demand, however. Industry and heating comprised 42 percent and 33 percent of Chinese natural gas consumption in 2022; electricity accounted for only 17 percent. Meanwhile, LNG accounted for 25 percent of all Chinese natural gas consumption in 2022.

Moreover, China is building dozens of gigawatts of new gas-fired baseload power capacity along coastal provinces, along with new LNG import terminals, suggesting LNG for power burn could rise, at least over the medium term. While Chinese natural gas data is not transparent, offshore wind electricity generation cannot by itself eliminate LNG imports.

Renewables, heat pumps, and clean hydrogen could – and likely will – eventually eliminate China’s LNG demand, but these developments are very far off, for now, barring a dramatic policy shift.  

In sum, China’s offshore wind buildout is beneficial for the climate, yet it will also lessen Beijing’s reliance on hydrocarbon imports from Australia and the United States. Offshore wind will notably limit China’s exposure to Australia’s thermal coal exports. Western policymakers should continue to closely monitor Beijing’s energy security strategy for signs of potential aggression against Taiwan.

This article represents the authors’ personal opinions.

Joseph Webster is a senior fellow at the Atlantic Council’s Global Energy Center, where he leads the center’s efforts on Chinese energy security and specialises in energy geopolitics.

Zoe Leung is the former senior director of research at the George H. W. Bush Foundation for US-China Relations. 

This article appears courtesy of The Lowy Interpreter and may be found in its original form here.

Uzbekistan Eyes Deepened Economic, Energy, and Security Ties with China

By RFE/RL staff - Jan 26, 2024

• Mirziyoev praises China's economic model and seeks to deepen ties, focusing on green energy projects, science, and boosting tourism.
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• The visit follows significant global and regional developments, including the war in Ukraine, influencing Uzbekistan's approach to China as a stable political and economic partner.
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• Investment in renewable energy and electric vehicles are key areas of interest, reflecting China's global leadership in these sectors and its strategic BRI investments.
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Uzbek President Shavkat Mirziyoev is in Beijing to meet with Chinese leader Xi Jinping for a high-profile state visit intended to lay the groundwork for strong ties between the two countries.

In an article signed by Mirziyoev that appeared in Chinese state media ahead of the trip, the Uzbek leader praised China’s model of economic development and said relations between the two countries are experiencing “new historical heights” that will allow him to use the January 23-25 trip to “develop a new long-term agenda” for the two countries that will last for “decades.”

"Every time I visit China, I sincerely admire the scale of the reforms taking place here, the accomplishments, creative strength, diligence, and talent of the Chinese people who are confidently pursuing the path of modernization to realize their centuries-old dream,” the article said.

The state visit comes following the first in-person China-Central Asia leaders’ summit in May where China inked several agreements to deepen its economic and security links with the region. In Beijing, Mirziyoev is looking to build upon those deals as well as a comprehensive strategic-partnership agreement signed in 2022.

While meeting with Xi and other top-level Chinese officials, the Uzbek delegation will look to court investment and agree with their counterparts on how to bring many previously signed deals to fruition, from developing green energy projects to cooperation in science and boosting tourism between China and Uzbekistan.

“This is less about concrete outcomes and more about setting a road map for the future,” Niva Yau, a fellow at the Atlantic Council's Global China Hub, told RFE/RL. “China has committed to investments and projects and this high-level visit is [about] how to achieve them and to search for new areas to cooperate together.”

Evolving Ties

The visit takes place against the backdrop of several major developments that have changed the political environment at home and abroad for Uzbekistan’s relationship with China.

Russia’s 2022 full-scale invasion of Ukraine has boosted China’s standing as a reliable political and economic force for the countries of Central Asia as Moscow -- the region’s traditional dominant partner -- has grappled with financial and geopolitical fallout from the conflict.

After a decade of infrastructure investments around the globe through Beijing’s multibillion-dollar Belt and Road Initiative (BRI), China wants to use the project to invest in new sectors and become a more strategic lender after facing criticism for a lack of transparency in BRI loans as it now grapples with a slowing domestic economy.

Facing such headwinds, China is looking to make the BRI smaller and greener through more risk-averse loans and investments in renewables, and Yau said this could factor into the results from Mirziyoev’s visit.

China, she notes, has been investing heavily in environmental and scientific research and monitoring, with several notable investments in Central Asia.

Tajikistan, which neighbors Uzbekistan to the southeast and shares a border with China, opened a Chinese observation station on Lake Sarez in 2021, reportedly for environmental research and “international disaster reduction and prevention,” according to the Chinese Academy of Sciences.

In July 2023, Chinese researchers also unveiled a new “super” observation post for climate and environmental monitoring in Shahritus, near the meeting point of China's borders with Uzbekistan and Afghanistan.

The stations have scientific and technological applications, but observers note the installations are part of a broad network of similar stations across BRI countries in South and Central Asia that could have dual applications for security and surveillance.

Beijing has also looked to expand the list of countries cooperating with its space program, reaching an agreement with Turkmenistan in 2023.

While traditional Chinese investments in Central Asia are still in play, such as a proposed natural gas pipeline from Turkmenistan to China and a railway connecting China to Kyrgyzstan and Uzbekistan, their futures are uncertain.

Yau said Beijing is looking to bring these new areas of investment and industry that it has expanded elsewhere in the world to Central Asia, and Uzbekistan, with a population of some 35 million, is an attractive partner.

One particular sector of interest is renewable energy and opening up new markets for Chinese electric vehicles.

China has been positioning itself as a market leader around the world for years and, in December, China’s Henan Suda signed a deal with the Uzbek Energy Ministry to build some 50,000 charging stations for electric vehicles around the country by 2033.

“These are areas where China is becoming a global leader and it wants to bring them to Central Asia,” Yau said.

New President, New Era

While events like the war in Ukraine have affected the relative appeal of Beijing and Moscow as partners for Central Asia, Mirziyoev’s high-profile visit is the product of years of warming ties between China and Uzbekistan, says Temur Umarov, a fellow at the Carnegie Russia-Eurasia Center in Berlin.

“This direction towards China has been Mirziyoev’s priority from the beginning,” he told RFE/RL. “Mirziyoev is very interested in China and often quotes [former Chinese leader] Deng Xiaoping in his speeches; and he clearly sees the country as an example for how to develop economically.”

China’s experience combating top-level corruption under Xi and its efforts to lift millions out of poverty, Umarov says, have been a particular focus for the Uzbek leader since he came to power in 2016 following the death of Islam Karimov, the country’s first ruler after the collapse of the Soviet Union in 1991.

“China has become a source of knowledge in a way for Mirziyoev,” Umarov said. “Given that Uzbekistan is a personalistic regime, how he sees China matters a lot.”

Uzbekistan followed a far more isolationist foreign policy under Karimov that was suspicious of outside influence.

China was still an important partner, with Chinese leader Hu Jintao inviting Karimov to Beijing for a visit in 2005 less than two weeks after the bloody crackdown against protesters in the northeastern Uzbek city of Andijon, though the relationship was limited. Under the hard-line Karimov regime, Chinese companies and capital in many sectors of the economy were restricted.

That changed following Karimov’s death, which brought Mirziyoev to power.

As the new Uzbek president has opened up his country’s economy, China has been both a reliable source of investment and a valuable ally that has helped Mirziyoev build his legitimacy at home and abroad.

As Umarov notes, China’s own model of opening its economy while retaining tight political control is one that looks increasingly appealing to Mirziyoev.

“This is very relevant to him as he tries to build his own political regime based on Karimov's heritage,” Umarov said. “He knows that he needs to adapt to the world and learn from similar regimes about how to navigate the complex realities of today.”

By RFE/RL

China’s Record Solar Additions in 2023 Top Entire U.S. Solar Capacity

By Charles Kennedy - Jan 26, 2024

China installed a record-high solar power capacity last year, with additions in 2023 alone topping the current capacity of the entire U.S. solar fleet.

China added as much as 216.9 gigawatts (GW) of solar power capacity in 2023 – a record high, obliterating its previous record of 87.4 GW of solar power additions 2022, according to data from the National Energy Administration cited by Bloomberg.

Per estimates by BloombergNEF, the Chinese additions in 2023 alone were higher than the whole U.S. solar capacity fleet of 175.2 GW.

Last year, China commissioned as much solar PV as the entire world did in 2022, the International Energy Agency (IEA) said in a report on renewables earlier this month. Renewable capacity installations globally surged by almost 50% last year as renewable energy capacity hit nearly 510 GW, led by solar PV and a jump in new Chinese installations, the IEA noted.

Last year, China also added 75.9 GW of wind—another record high and much higher than the 37.6 GW added in 2022, according to the Chinese data released today.

In 2023, renewable energy generation capacity in China surpassed 50% of the total—a milestone which China expected to achieve by 2025.

China dominates not only solar power installations globally, but also the solar panel market.

China’s costs for producing solar modules have plummeted by 42% over the past year, which gives Chinese manufacturers a huge cost advantage over the U.S. and European solar equipment producers, Wood Mackenzie said in a report last month.

While China is the world’s largest investor in wind and solar, it is also investing heavily in hydropower and hydrocarbons as it pursues an “all of the above” approach to energy supply.

China continues to rely on coal and coal-fired power generation to meet its growing power demand, and despite being the world's top investor in solar and wind capacity, it also plans a lot of new coal-fired electricity capacity.

 

Latin America: The Next Chapter in China’s Global Economic Strategy

By Alex Kimani - Jan 24, 2024

• Harsh economic times are forcing China to change its investment tack in its pivotal markets, including in Latin America.
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• China is investing in Latin America’s critical minerals, technology, renewable energy,  electric vehicles and high-end manufacturing sectors.
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• China is likely to remain the global superpower in renewable energy for years, if not decades, to come.
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For decades, China has been a key driver of global economic growth thanks to an economy that managed to maintain blistering growth for what seemed like forever. China’s economy ballooned from $1.2 trillion in 2000 to nearly $18 trillion in 2021, good for a nearly 10% annual clip ever since Beijing embarked on economic reforms in 1978. The country's gross domestic product (GDP) per capita, adjusted for inflation, rocketed from $293 in 1985 to more than $12,000 in 2021, one of the greatest economic transformations of modern times. But signs are now legion that China's economic nirvana has ended, with some analysts predicting that the Asian nation probably has another decade or so before it plunges into civil unrest and long-term economic decline.

The clearest sign of this decline is China's deflation problem. At a time when Americans are fretting about rising prices of goods and services, aka inflation, policymakers in Beijing are growing increasingly worried because prices are declining, aka deflation. China’s consumer price index declined for the final three months of 2023, marking the country’s longest deflationary streak since 2009. Deflation is a sign that China’s current economic model is broken and points to deeper malaise gripping the Chinese people.   

More worryingly, foreign investors are losing confidence in the Chinese dream. Last year, outflows of foreign direct investment in China exceeded inflows for the first time since 1998, with escalating tensions with the U.S. cited as a key reason why investments are fleeing from the beleaguered economy. Two-thirds of respondents to a survey taken last fall by the American Chamber of Commerce in the People's Republic of China cited rising bilateral tensions as a major business challenge. Last year, overseas companies invested 1.13 trillion yuan (S$209 billion) in China, good for an 8% Y/Y decline- the first decline since 2012. Unfortunately, the situation is not expected to improve any time soon.

“2024 will be worse. They would need to fully open many more sectors, eliminate forceful locations, and close down a few state agencies, but none of that is going to happen, so I think FDI will continue to fall,” Alicia Garcia Herrero, chief economist for Asia-Pacific at Natixis, told the Business Times.

Harsh economic times are forcing China to change its investment track in its pivotal markets, including Latin America. Whereas the United States is Latin America's largest trading partner, China remains South America's top trading partner. As you might expect, China’s foreign direct investments have come under pressure, and Latin America is no exception. Over the years, China’s FDI in Latin America has been cut by more than half, from $14.2bn per year between 2010 and 2019 to $7.7bn from 2020 to 2021, and then to $6.4bn in 2022, the last year for which data is available.

But the massive decline does not tell the whole story. China has changed its investment strategy in the region from putting money into expensive infrastructure projects to strategic sectors such as critical minerals, technology, renewable energy, electric vehicles, and high-end manufacturing.

“Our data show a clear shift in Chinese FDI towards specific industries in Latin America and the Caribbean. Many of these new priority areas are described by China as ‘new infrastructure’, a term which encompasses industries — telecommunications, fintech and energy transition, for instance — which are . . . critical to China’s own economic growth strategy,” Margaret Myers, a co-author of the report by the Washington-based think-tank, has told the Financial Times.

Renewable Energy Superpower

China might not achieve its lofty ambition to surpass the United States as the world’s pre-eminent economic and military power any time soon, but is likely to remain the global superpower in renewable energy for years, if not decades, to come.

In its Renewables 2023 report, the International Energy Agency predicted that China will continue to cement its status as the colossus of renewable energy over the next five years by adding more capacity than the rest of the globe combined. The IEA says China will account for 56% of renewable energy capacity additions in the 2023-28 period. The world’s second-biggest economy is expected to grow its renewable capacity by 2,060 gigawatts (GW) in the forecast period, dwarfing the 1,574 GW capacity addition by the rest of the world. The IEA report highlights how Beijing is employing supportive policies to drive the massive expansion.

"China accounts for almost 90% of the global upward forecast revision, consisting mainly of solar photovoltaic (PV). In fact, its solar PV manufacturing capabilities have almost doubled since last year, creating a global supply glut. This has reduced local module prices by nearly 50% from January to December 2023, increasing the economic attractiveness of both utility-scale and distributed solar PV projects," the report said.

The IEA has pointed out that lower costs are making utility-scale solar cheaper in China than coal- and gas-fired generation.

 

North Dakota Oil Production Climbing Back Faster Than Anticipated

By Julianne Geiger - Jan 26, 2024

North Dakota’s production of crude oil is returning to full force at a quicker pace than first suggested by authorities, new data from the state’s regulator showed on Friday.

Crude oil production in the Peace Garden State is now down by between 30,000 and 80,000 bpd after extreme cold led to operational challenges. Associated natural gas production—the natural gas produced as a byproduct of crude oil production—was estimated to be down 0.10 and .22 Bcfd.

Extreme weather cut crude oil production in North Dakota by hundreds of thousands of barrels. At the peak of the production outages due to the cold temperatures, 650,000 bpd—roughly half of what North Dakota typically produces—was taken offline. Just a week ago, the North Dakota Pipeline Authority said that production had clawed back to settle at just 350,000 – 400,000 bpd, but cautioned that it could be another month before its production returned to normal.

Today’s data, however, suggests that production could return to normal before a month, with less than 80,000 bpd of crude production remaining offline.

Production outages from the Bakken—one of the largest deposits of crude oil and natural gas in the United States—and disruption of oil tanker traffic due to fears about traversing the Red Sea have contributed to a rise in crude oil prices. On Friday, WTI was trading at $76.94—a $2.80 rise from a month ago. Brent crude was more than $3 less than what it is today.

The Houthi attacks on vessels in the Red Sea and U.S. production outages have perhaps made OPEC+’s job a bit easier as it tries to curb oil production to keep oil markets in check.

In other North Dakota’ oil news, the state’s Director of Mineral Resources Lynn Helms, who held office during North Dakota’s oil boom that catapulted it to the nation’s third-most prolific oil producer, announced on Thursday that he is retiring effective June 30.

By Julianne Geiger for Oilprice.com