Chinese Oil Buyers Reduce Russian Purchases

By Irina Slav - Nov 03, 2025

Chinese refiners are canceling Russian oil cargos and adopting a wait-and-see attitude after the latest U.S. sanctions on Russia’s oil industry.

Bloomberg reports, citing traders, that state-owned majors including Sinopec and PetroChina had canceled previously ordered Russian oil cargos, while the so-called teapots, or independent refiners, had stopped buying Russian crude to avoid getting penalized for violating the U.S. sanctions.

The publication cited Rystad Energy as estimating that some 45% of Chinese imports of Russian crude have been affected by the sanctions. The figure represents some 400,000 barrels daily. As a result of the forced change in buying habits, Russian crude is trading at a deeper discount, with the flagship Urals at $57.99 per barrel at the end of last week. China mostly imports another blend, the Eastern Siberian-Pacific Ocean or ESPO, and the cargo cancellations have pushed its price lower, Bloomberg noted.

Russia became the largest single oil supplier to both China and India over the past three years, thanks to the discounts its oil carries amid Western sanctions. Now, both China and India need to find alternatives to Russian crude, of which there are plenty, but at usually higher prices. China has made itself a supply cushion by importing more crude than it is using this year, and building more storage capacity. Plans are to have 11 new storage sites with a combined capacity of 169 million barrels by the end of 2026.

India is having a more challenging time replacing Russian oil supply. Russia accounts for a third of its total oil imports, which in turn account for some 85% of consumption. Due to its overwhelming dependence on imported crude, India is especially vulnerable to price differences and is especially motivated by discounts when making buying decisions. Even Indian refiners are reportedly turning away from Russian crude as well, to avoid U.S. sanction penalties.

By Irina Slav for Oilprice.com

Indian Refining Giant Switches From Russian to Emirati Crude

By Irina Slav - Nov 03, 2025

Bharat Petroleum, one of the largest refiners in India, has bought a cargo of Emirati Upper Zakum crude, as it seeks alternatives to Russian oil, Reuters has reported, citing unnamed sources.

The cargo is 2 million barrels, to be delivered next month. Bharat Petroleum bought it on the spot market, where it previously mostly bought Russian crude, at the same rate of around 2 million barrels monthly.

Reports of Indian refiners buying non-Russian oil cargoes have become frequent in the past couple of weeks, following Washington’s decision to impose sanctions on two of Russia’s biggest oil exporters, Rosneft and Lukoil.

The two together handle about half the country’s crude exports, a big portion of which goes to Indian refiners. While the news initially caused a small price shock, the effect quickly evaporated as it became clear that there are ways around the sanctions, such as buying Russian crude from non-sanctioned entities and, ultimately, changing the supplier, even at a higher cost.

Indian Oil Corp., for instance, last week bought as many as five cargoes of Russian crude oil for December delivery from non-sanctioned sellers. IOC is the largest refiner in India, and the purchase signals there are still ways to buy Russian crude without violating the latest sanctions, aimed at draining Russia’s energy export revenues, widely assumed in Washington to be the only source of funding for the war in Ukraine.

Other Indian oil processors, meanwhile, are buying crude from elsewhere, including the Middle East, the Americas, and West Africa. That oil often costs more than Russian crude, which, thanks to the sanctions, sells at a discount, but at least there is supply, even if the bills end up higher.

This could become an issue over the longer term. India imports over 80% of the oil it consumes, meaning it is quite sensitive to price increases on global markets or, in the case of sanctions, the need to switch from cheap to costlier crude.

By Irina Slav for Oilprice.com

Indian Refiners Pivot Away From Russian Oil

By Alex Kimani - Nov 01, 2025

• Indian refiners are moving away from Russian oil following new U.S. sanctions, opting for more expensive U.S. and Middle Eastern grades to avoid repercussions.
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• The sanctions have reduced the attractiveness of Russian oil by narrowing discounts and increasing transaction risks, causing India's share of Russian oil imports to decline.
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• The upcoming OPEC+ meeting on November 2nd will be crucial in determining the future oil price trajectory, with analysts predicting a continuation of current production plans.
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Oil prices were little changed in the current week, with bearish sentiment still ruling the markets after the U.S. agreed to a one-year truce to its trade war with China, despite reports that Indian refiners are ditching Russian oil following fresh U.S. sanctions. Brent crude for December delivery traded at $65.07/bbl at 2.22 pm ET on Friday, a slight drop from $66.48/bbl a week ago, while the corresponding WTI contract was changing hands at $60.92/bbl, down from $61.95/bbl. 

Last week, the Trump administration announced fresh sanctions targeting Russia’s oil and gas giants, Rosneft and Lukoil,  just days after the UK unveiled similar sanctions. Previously, Trump threatened tough measures against Moscow for failing to agree to a peace pact with Ukraine, but had avoided making good on his threats. And now there are reports that Indian refiners are shunning Russian oil in favor of costlier U.S. and Middle Eastern grades in a bid to avoid incurring Trump’s wrath.

Over the past three years, India has been taking advantage of cheap Russian crude, frequently offered at discounts of $8-$12 per barrel over Middle Eastern benchmarks. Russia has consistently been India’s largest supplier since mid-2022, with India buying ~1.75 million barrels per day from Russia at its peak, largely from Lukoil and Rosneft. India typically imports 86% of the oil it consumes. However, the latest round of U.S. sanctions targeting shipping, insurance and trading networks that Indian refiners leveraged to buy Russian oil at scale has narrowed those discounts and raised transaction risks, making Russian oil far less attractive. 

Further, the sanctions have made banks more cautious with settlement channels. Consequently, the share of Russian oil in India’s import basket has declined to 34% in the current year from 36% in the previous two years. In contrast, U.S. crude imports into India surged to 575,000 barrels per day in October, the highest level in three years, signalling a deliberate pivot. India will now have to contend with higher energy bills, “Crude oil prices surged sharply following fresh sanctions on Russian oil majors, sparking tightening supply fears and renewed inflation concerns. This could negatively impact India, as elevated crude prices may widen the fiscal deficit and strain the import bill,” Vinod Nair, Head of Research at Geojit Investments, said.

Commodity analysts at Standard Chartered have predicted that the oil price trajectory will be determined by the quantity of Russian barrels removed from supply following the sanctions. Rosneft and Lukoil exported 1.9 million barrels per day (mb/d) of crude via sea over the past year, most of it to India and China. China also imported ~ 800K barrels of crude per day (kb/d) from Rosneft via pipeline. 

Russia has lately been trying to woo Chinese energy buyers over the past few months: Last month, Gazprom and Beijing signed an agreement to construct the Power of Siberia 2 natural gas pipeline while Rosneft has agreed to supply additional pipeline volumes via Kazakhstan. Russia will likely struggle to replace India and Chinese barrels if they start substituting Russian Urals with barrels from the U.S., Middle East, Brazil, Canada and West Africa.

All eyes will now turn to OPEC+ when its members meet virtually on 2 November. StanChart has predicted that the group will continue with its latest plan of adding 137 kb/d to the market each month, with no good reason for OPEC+ to adjust the strategy at its upcoming meeting.

Meanwhile, Iraq’s compliance with its first month of compensation cuts is also likely to be highly scrutinized. 

The latest compensation plan suggested the OPEC member would decrease its output by an additional 130 kb/d in each of the September and October loadings, nearly enough to offset the barrels added to the market by OPEC+. 

Crude exports from Kurdistan to Türkiye commenced at the end of September after a 2.5-year hiatus, with these exports falling under the total Iraqi production quota. Iraq’s oil Minister Hayan Abdel-Ghani recently revealed that the country’s oil exports are 3.6mb/d, of which ~200kb/d are from Kurdistan. Iraq exported 3.4mb/d of crude in the first nine months of the year, with 64% destined for India and China. It’s not yet clear whether exports were impacted by the fire at the Zubair-1 depot, which was estimated to have cut off 400-600kb/d of Basra medium crude from export markets. Any long-term disruption would make it harder for India and China to replace Russian oil.

By Alex Kimani for Oilprice.com 

Why the Global Methane Pledge Is Falling Short

By Felicity Bradstock - Nov 02, 2025

• The Global Methane Pledge, launched at COP26, aimed to cut global methane emissions by 30% by 2030, but progress has stalled.
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• UN satellite data reveals over 14,000 methane leaks, with nearly 90% going unaddressed by governments and fossil fuel companies.
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• Ahead of COP30, experts warn that without stronger monitoring, enforcement, and political will, global climate targets will be impossible to meet.

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The Global Methane Pledge was launched at the COP26 climate summit to accelerate the reduction of carbon emissions worldwide. However, since joining the pledge, many countries have failed to cut their methane emissions at the rate needed to meet global warming reduction targets. While the focus of climate change is often centred around carbon emissions, the fact that methane heats the planet up to 80 times more than carbon dioxide over two decades is less widely discussed. Methane has contributed around 30 percent of the increase in global temperatures since the Industrial Revolution. The energy sector accounts for over 35 percent of the methane emissions from human activity, meaning that a transition from fossil fuels to green alternatives could help to significantly cut emissions.

The Global Methane Pledge was introduced in 2021, led by the United States and European Union and signed by 111 countries, which, together, contribute around 45 percent of global human-caused methane emissions. The pledge states the aim of reducing methane emissions by at least 30% below 2020 levels by 2030. For several countries that joined the pledge, this was their first policy commitment to reduce methane emissions.

While the pledge is non-binding, the U.S. and EU requested that all participants develop or update a national methane reduction action plan by COP27 in 2022. However, the pledge does not state any specific actions or steps for member states to take. Some of the countries that emit the highest levels of methane each year, such as China, India, and Russia, have not yet joined the pledge. However, China did commit to developing a “comprehensive and ambitious National Action Plan on methane, aiming to achieve a significant effect on methane emissions control and reductions in the 2020s.”

Participant commitments to methane reduction vary significantly. For example, Canada announced plans to reduce methane emissions from the oil and gas sector by at least 75 percent from 2012 levels by the end of the decade. Meanwhile, some countries, such as Iran, have yet to establish any methane reduction strategies to date.

The United Nations also developed a scheme for oil and gas companies to measure and report their methane emissions, with 154 companies currently enrolled, representing around 42 percent of global oil and gas production. In 2025, the firms reported 2.5 million tonnes of methane emissions, which was higher than the previous year. However, the UN noted that around four-fifths of companies fail to report their emissions accurately. Despite over a hundred countries joining the pledge, as well as the launch of the company's emissions reporting scheme, the world is falling short on cutting global methane emissions.

A recent report by the UN showed that methane emissions are not falling fast enough to meet the 2010 reduction target. Satellite imagery from one UN programme revealed that there are over 14,000 methane leaks worldwide. The UN said that nearly 90 percent of satellite-detected methane leaks being reported to governments and fossil fuel companies are not being addressed. The International Methane Emissions Observatory achieved a 12 percent response rate from 3,500 alerts from leaks detected. In addition, most methane leaks are too small to be detected by satellites, suggesting that global emissions are far higher than satellites can show.

Inger Andersen, the executive director of the UN Environment Programme, which oversees the observatory's Methane Alert and Response System, said, “Actions remain too slow… We are talking about tightening the screws in some cases,” in reference to methane leaks from oil and gas venting and flaring. Andersen added, “We can't ignore these rather easy wins.”

Under President Trump, the U.S. has pulled back on methane emissions targets, despite its leading role in the methane pledge. The Trump administration has proposed ending pollution reporting requirements and has halted plans to begin taxing methane emissions.

Recently, investors representing over $5.3 trillion of assets encouraged the EU not to weaken its methane emissions law, owing to concerns that the bloc may relax the rules to support higher levels of LNG imports from the United States, aimed at easing trade tensions.

Despite the failure to reduce global methane emissions at an accelerated rate, the UN report did highlight that many energy companies were improving the quality of their methane reporting. The report stressed the importance of accurate reporting, “Reliable measurement-based data is required not only to guide effective and efficient mitigation, but also to track changes in emissions over time and assess progress toward climate goals.”

The UN’s report comes just weeks ahead of the COP30 climate summit in Brazil and emphasises the need for greater discussion around methane emission reduction efforts. COP30 could provide the necessary platform to establish clear international goals for methane emissions cuts and encourage countries and companies to improve monitoring and reporting mechanisms to help meet global 2030 targets.

By Felicity Bradstock for Oilprice.com

Energy Transition Stalls 10 Years After Paris Agreement

By Tsvetana Paraskova - Nov 02, 2025

• A decade after the Paris Agreement, the global transition to clean energy is slowing despite record renewable capacity installations, due to geopolitical, financial, and regulatory challenges.
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• China maintains its leadership in clean energy investment and installations, while the EU continues its decarbonization efforts amid rising costs and political resistance, and the U.S. has scaled back its clean energy incentives.
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• The upcoming COP30 summit in Brazil will address these challenges, with the host country promoting sustainable fuels while simultaneously planning an expansion of its upstream oil sector, highlighting the complex realities facing large energy markets.
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Ten years after the landmark Paris Agreement to pursue net-zero emissions by 2050, the world faces a slowing transition to clean energy despite record-breaking renewable capacity installations.   

Much has changed in the energy systems in the decade since the Paris Agreement was signed in 2015. These systems faced a global pandemic, the first war in Europe since WWII, an energy crisis, a U.S. government that questioned climate change, and backlash against net-zero policies in banking and equity investment.   

Some things have remained constant. One is China’s undisputed leadership in clean energy investment and installations, and cheaper domestically-manufactured equipment, allowing the rollout of solar and wind power capacity at much lower costs compared to Europe and the U.S. 

The other constant is the EU’s unwavering insistence on decarbonizing to achieve net-zero emissions across its economies by 2050, despite soaring costs and growing political resistance to intermediate targets and warnings from trade partners that the burdensome EU climate directives on emissions and carbon prices could undermine its energy supply. Last week, the United States and Qatar joined forces for a fresh warning to Brussels that its corporate sustainability directive risks LNG imports from two of the world’s biggest exporters at a time when the EU is seeking to ban all Russian gas imports. 

All these developments are taking place amid growing uncertainty – both financial and regulatory – for clean energy developers. 

U.S. President Donald Trump pulled the United States out of the Paris Agreement – twice, on Day One of each of his terms in office. Coinciding with President Trump’s inauguration in 2025, banks started quitting net-zero alliances and stopped the previously very vocal pledges to cut off financing for fossil fuels, with a U.S. Administration, which is now openly hostile toward clean energy solutions, especially offshore wind, and which drastically scaled back U.S. renewable energy and EV incentives. 

Amid geopolitical, financing, cost, and regulatory challenges to clean energy, Brazil is hosting the annual global climate summit COP30 in Belem from November 10 to 21. 

Ten years after Paris, COP30 will take place as renewable energy installations soar to record highs, but investment and capacity additions are not yet on track for net zero or for any other intermediate or renewable energy goal. 

“Some countries are quietly wavering on their climate commitments on the eve of the meeting while the US very loudly questions the entire concept of global warming,” Ethan Zindler, Countries and Policy Research at BloombergNEF, says. 

Despite the record-high investments into clean energy technologies and soaring solar power installations, “the transition to a lower-carbon economy is not moving nearly fast enough to deliver on the ambition for net-zero emissions agreed in Paris a decade ago,” BloombergNEF noted. 

In the first half of 2025, China remained the world’s top market for renewable energy investment, accounting for 44% of the global total, BNEF has estimated. The U.S. U-turn in policy, on the other hand, may prompt developers and investors to reallocate capital from the United States to Europe, according to the research provider. 

Ahead of COP30, the International Renewable Energy Agency (IRENA), the COP30 Brazilian Presidency, and the Global Renewables Alliance (GRA) said in an October report that the world is falling behind on its renewable energy and efficiency goals despite record progress last year.

The global progress report flagged bottlenecks in investment, grids, and supply chains, and urged governments for bolder renewable targets before COP30. 

The climate summit in Brazil is not without controversies, as were the previous two editions held in major oil and gas producing countries, the UAE and Azerbaijan. 

The host country, Brazil, South America’s top oil producer and exporter, is expected to push for the Belém Commitment for Sustainable Fuels—known as Belém 4x—an initiative aimed at building high-level political support for the global goal of quadrupling the production and use of sustainable fuels by 2035.  

But “Brazil faces a fundamental contradiction as it prepares to host COP30: leading the world in sustainable fuels while simultaneously planning an expansion of its upstream sector,” David Brown, Director, Energy Transition Research at Wood Mackenzie, said this week. 

“This tension reflects the complex realities facing large energy markets and companies.”   

By Tsvetana Paraskova for Oilprice.com

Why the World’s Coal Addiction Won’t End Anytime Soon

By Felicity Bradstock - Nov 02, 2025

• Global coal demand rose 1.5% in 2024 to an all-time high of 8.79 billion tonnes, mainly driven by China and India.
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• Despite growing renewable capacity, rising electricity demand kept coal-fired power generation at record levels.
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• Experts warn that unless coal use declines sharply, the world will fail to meet the 1.5°C climate target set by international agreements.

While many countries around the globe pledge to transition away from fossil fuels to renewable alternatives, the use of coal for power generation has once again risen. Several governments have committed to cutting coal production and use over the coming decades, due to its reputation as the “dirtiest fossil fuel”. Coal is being increasingly replaced with less-polluting fossil fuels, such as natural gas, as countries gradually expand their renewable energy sectors to transition towards green energy. However, it seems that despite big promises and heavy investment in alternative energy sources, coal use remains high.

Global coal use rose to a record high in 2024, which will likely have a negative impact on global warming. For several years, governments worldwide have been introducing policies aimed at reducing coal use to help tackle climate change. While the contribution of coal for electricity production fell as the global renewable energy capacity increased, the overall increase in power demand led to more coal being used for power last year, according to the recently published annual State of Climate Action report.

In 2024, global coal demand rose by 1.5 percent compared to 2023, to reach an all-time high of 8.79 billion tonnes. The increase was driven mainly by emerging economies in Asia, particularly China and India. China’s demand rose by 82 million tonnes (Mt), or 1.7 percent, while India’s use grew by 45 Mt, or 4 percent. Indonesia and Vietnam also experienced a rise in coal demand. Meanwhile, the European Union saw a decrease in coal use by 40 Mt, or 11 percent, while the United States saw a 14 Mt, or 4 percent, reduction, as many coal plants were retired and renewable energy capacity grew.

As countries in Europe and North America decrease their dependence on coal, other regions, principally Asia, are expected to continue relying heavily on coal for years to come. China, India, and the Association of Southeast Asian Nations (ASEAN) countries contributed around 77 percent of the 2024 global coal demand.

Coal-fired power generation, the principal driver of global coal demand, also reached a record high in 2024, at around 10,766 TWh. Meanwhile, the use of coal in iron and steel production remained fairly stable. China has a significant impact on the world’s coal consumption, using around 30 percent more of the fossil fuel than the rest of the world combined. Much of its coal is used to power its expansive manufacturing industry.

The report suggested that while many governments are making a clear effort to decrease their reliance on coal, in favour of renewable alternatives, the world is not transitioning at a fast enough rate to meet international greenhouse gas reduction targets by the mid-century.

“There’s no doubt that we are largely doing the right things. We are just not moving fast enough. One of the most concerning findings from our assessment is that for the fifth report in our series in a row, efforts to phase out coal are well off track,” said Clea Schumer, a research associate at the World Resources Institute thinktank. “The trouble is that a power system that relies on fossil fuels has huge cascading and knock-on effects… The message on this is crystal clear. We simply will not limit warming to 1.5°C if coal use keeps breaking records,” explained Schumer.

At the COP26 climate summit in 2021, governments agreed to “phase down” the use of coal as part of the “Glasgow climate pact”. Despite changing the language last minute, from a “phase-out: to a “phase-down”, government representatives at the conference made a clear commitment to reduce their reliance on coal. While many environmentalists were disappointed by the decision to water down the language, most thought it signalled the end of the coal era.

At the time, the executive director of the International Energy Agency, Fatih Birol, said that over 40 percent of the world’s existing 8,500 coal plants would need to close by the end of the decade, and no new ones could be built, to stay within the global heating limit of 1.5°C. Birol stated, “I would very much hope that advanced economies take a leading role and become an example for the emerging world. If they don’t do it, if they don’t show an example for the emerging world, they shouldn’t expect the emerging world to do it.”

However, the view of coal use varies significantly from country to country. Despite its commitment to reducing greenhouse gas emissions over the coming decades, India sees coal as a major contributor to the industrial expansion needed to support the country’s economic growth. India’s prime minister, Narendra Modi, celebrated surpassing 1 billion tonnes of coal production earlier this year. Meanwhile, United States President Donald Trump has backtracked on the Biden administration’s climate efforts, instead declaring his support for coal and other fossil fuels this year.

The failure to reduce coal consumption at the rate needed to meet international climate pledges demonstrates the need to reinforce the commitment to phasing down coal use in the upcoming COP30 UN climate summit in Brazil. In addition, greater efforts must be taken to support emerging economies in transitioning to green without compromising economic growth reliant on the use of fossil fuels. 

By Felicity Bradstock for Oilprice.com

 SCI-FI-TEK 70 YRS IN THE MAKING

Merz Action Plan Aims for World's First Commercial Fusion Reactor

By Haley Zaremba - Nov 02, 2025

• Germany has announced a €1.7 billion investment in nuclear fusion, aiming to develop the world's first commercial fusion reactor, a significant reversal of its long-standing anti-nuclear energy stance.
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• This policy shift is driven by Germany's ambitious decarbonization goals and the need to overhaul its energy mix, moving away from heavy reliance on fossil fuels.
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• The investment positions Germany at the forefront of a global technology race in nuclear fusion, a field experiencing major breakthroughs and considered crucial for future energy sovereignty.
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Germany just made a huge bet on nuclear fusion, putting an exclamation point at the end of its historic u-turn on nuclear energy policy. A new action plan from Chancellor Friedrich Merz aims to ensure that the world’s first commercial fusion reactor and throws €1.7 billion ($1.98 billion) in funding behind the cause. The unexpected announcement is making major waves in what is already a conflicted political environment when it comes to energy planning.

This announcement comes as something of a shock considering that Germany has been Europe’s staunchest nuclear energy opponent for years. Germany decommissioned its last three nuclear power plants offline in 2023, and has – until very recently – stood firmly unified in this resolve. "We have decided to phase out nuclear power. This has also been accepted by society," the nation’s Environment Minister Carsten Schneider told Deutsche Welle (DW) just a few months ago. "There are no further commitments [to the nuclear industry], nor will there be any," he went on to say.

But cracks have been showing in that unified front for a while now. Back in May, German Economy Minister Katherina Reiche publicly said that she was "open to all technologies,” marking a major departure from Germany’s traditional stance. Even more surprising, Germany ceded its side of a long-standing nuclear energy cold war with France, agreeing to make peace with French officials by dropping anti-nuclear power rhetoric from European Union legislation. 

Even against this backdrop, however, Germany’s bid to become the preeminent global superpower for nuclear fusion technology is a surprising one. But though it’s politically fraught, the plan has logical strategic grounding. An ambitious approach to clean energy production is absolutely necessary if Germany has any hope of meeting its decarbonization goals. As Europe’s largest economy, Germany’s greenhouse gas footprint is also pivotal to the wider climate goals of the European Union. The pressure is on for the nation, which currently relies heavily on fossil fuels, to overhaul its energy mix in the coming years.

Sarah Klein, commissioner for fusion research at the Fraunhofer Institute for Laser Technology in Aachen, told DW this week that investing in fusion technology is a "smart long?term strategic bet” that “keeps Germany at the forefront of a global technology race.” She added that in tandem with renewable energy development, nuclear fusion is “crucial for ensuring energy sovereignty after the phaseout of fossil fuels.”

Germany’s policy shift comes as part of a sea change of nuclear energy sentiment in Europe and abroad. Just this year, Italy and Denmark began motions to overturn their respective 40-years ban on nuclear energy production, and the government of Spain indicated that they were considering extending the lives of domestic nuclear power plants slated for phaseout. 

The shift also comes at a time of major technological breakthroughs in the field of nuclear fusion science. Researchers around the world are racing to achieve commercially viable nuclear fusion, and they are getting closer all the time. China, in particular, is investing heavily in fusion research and development and aims to achieve viability by 2050. Labs in the United States are also breaking record after record for achieving net positive energy production from their laser-based fusion models. 

The ramifications of any country or project achieving commercial nuclear fusion are difficult to overstate. In the words of a Daily Galaxy report from earlier this year, “If China or any other nation succeeds in making fusion commercially viable, it could trigger an energy revolution, transforming how the world powers homes, industries, and even space exploration.”

And, of course, it means a major geopolitical leg up for the country that gets there first. As a result, even Germany, once the world’s biggest anti-nuclear government, is now throwing its hat into the crowded ring. 

By Haley Zaremba for Oilprice.com