U.S. West Coast Refiners Tap Malaysian Supply

By Charles Kennedy - Aug 14, 2026

A cargo of fuel oil from Malaysia is making its way to a refinery on the U.S. West Coast in the first such shipment in three years as global supply of feedstock for refineries has tightened in recent months due to the closure of the Strait of Hormuz.

The Solomon Sea tanker, laden with more than 540,000 barrels of low-sulfur and straight-run (LSSR) fuel oil, departed from Malaysia’s PRefChem refinery operated by state oil and gas giant Petronas last week, tanker data on MarineTraffic shows. The cargo is set to arrive in the United States in early September.

The tanker is heading to a refinery on the U.S. West Coast, a source with knowledge of the matter told Reuters.

The cargo is the first shipment from Malaysia’s 300,000-bpd PRefChem refinery in Pengerang to the United States since 2023, per shipping data monitored by Reuters.

U.S. refiners usually import fuel oil to use as feedstock from close exporting countries including Mexico and Venezuela, but the tight global fuel market and soaring refining margins have made the arbitrage wide enough for Malaysian supply.

The LSSR type of fuel oil is an uncracked residual petroleum product from low-sulfur crude oil. Due to the low sulfur content and minimal impurities, the uncracked LSSR fuel oil is a favored feedstock for refiners to produce gasoline or diesel, or blend into low-sulfur marine fuel.

Due to the tight fuel markets globally and peak seasonal demand, U.S. refiners have maximized capacity utilization rates this summer and are apparently in search of quality feedstocks from wherever available.

U.S. gasoline and diesel exports have run at record levels in recent weeks as the global fuel market is tightening amid depleting inventories, supply bottlenecks in the Middle East and Russia, and peak summer demand.

In the entire oil complex, refined products are facing the biggest squeeze, as diesel, gasoil, and jet fuel supplies tighten, pushing refining margins to record highs.

By Charles Kennedy for Oilprice.com

Hormuz Crisis Pushes Asian Refiners Toward U.S. Oil

By Tsvetana Paraskova - Aug 14, 2026

North Asian refiners have increased buying activity to secure U.S. crude oil supply as an alternative to the Middle Eastern crude that may not make it outbound from the Strait of Hormuz as the U.S.-Iran stalemate continues and the chokepoint remains effectively closed.

At least four Asia-based refiners have bought U.S. crude volumes this week alone, traders told Reuters on Friday.

This week, tanker traffic – and shipping traffic as a whole – at the Strait of Hormuz has slumped further, according to observable transits with AIS positioning on.

Amid the Hormuz stalemate, Asian refiners are looking further afield for alternative supply as tight fuel markets and sky-high refining margins encourage refinery runs, if there is enough crude available.

In the deals this week, GS Caltex of South Korea bought 2 million barrels of Mars crude from Shell for delivery in November, at a premium of $13-14 above the Dubai benchmark for October, according to Reuters’ trade sources.

Cosmo Energy Holdings, one of the biggest refiners in Japan, also bought Mars, from commodity trader Trafigura. Japan’s biggest refiner by capacity, Eneos Corp, Japan's biggest refiner, purchased 2 million barrels of West Texas Intermediate (WTI) ‌crude from Trafigura for November delivery, priced at a premium of over $10 per barrel above the October WTI price.

CPC Corp, the state-owned energy company of Taiwan, acquired 2 million barrels of WTI via a tender at a premium of around $8 to $9 per barrel to Dated Brent, according to Reuters’ sources.

Further south in Asia, some state-held Indian refiners are also seeking spot crude supply as term deliveries are constrained by the ongoing crisis in the Middle East and its key oil chokepoint, the Strait of Hormuz.

Mangalore Refinery and Petrochemicals Limited (MRPL) and Hindustan Petroleum Corporation Limited (HPCL) are looking to buy a combined 6 million barrels of crude oil via spot tenders, Reuters reported earlier this week, citing tender documents it has seen.

By Tsvetana Paraskova for Oilprice.com

The Battle Over North Sea Oil Is Heating Up Under Britain’s New PM

By Felicity Bradstock - Aug 15, 2026

• Burnham has signalled a pragmatic approach to North Sea oil and gas, raising expectations that his government could permit some previously approved projects to proceed.
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• Jackdaw and Rosebank are politically sensitive because their previous development consents were ruled unlawful after failing to account properly for downstream emissions.
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• Allowing either project to proceed could provoke opposition within Labour, while supporters argue domestic production would reduce reliance on imported energy.
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With a new Prime Minister in office, it is uncertain whether the United Kingdom will continue accelerating its green transition or backtrack on climate pledges to support fossil fuel development. Many have speculated that the new Labour Party PM Andy Burnham will back North Sea oil and gas projects. However, since taking power in 2024, the Labour Party has introduced a wide range of energy policies supporting renewable energy development and grid infrastructure updates, as well as restrictions on new oil and gas drilling.

Before taking over as PM, energy experts speculated that Burnham would likely approve drilling projects at the Jackdaw gas field and Rosebank oil field off the coast of Scotland, alongside an expansion of ‘tie-backs’ which allow further drilling near existing fields. Jackdaw and Rosebank are in legal limbo because approvals from the previous Conservative government were overturned by the court, which ruled the consents were illegal. However, Burnham is expected to wait for public consultations on the projects to conclude before making a formal decision.

In recent weeks, the U.K. has faced drought, fires, and heatwaves due to climate change, which were exacerbated by ongoing fossil fuel extraction, according to recent reports. With the public growing increasingly concerned about extreme climate change-driven weather conditions, Andy Burnham was warned he may face the first revolt of his leadership if he supports new oil and gas drilling.

In late July, Burnham indicated that he would likely support drilling, saying he would be “pragmatic” about oil and gas. This came just hours ahead of a speech by the UN secretary-general António Guterres in which he warned “every new fossil fuel project” made heatwaves more dangerous.

The Labour Party is facing competition from both sides of the political spectrum at present, with growing concerns about the increasing popularity of Zack Polanski’s Green Party. The Greens have voiced their staunch opposition to new oil and gas licences for the North Sea, while stressing the importance of a green transition.

Rachael Maskell, the Labour MP for York Central, encouraged ministers to “keep carbon in the ground”, and watch the recent national emergency climate briefing. Maskell stated, “We’re seeing ice caps melting, seas warming up, hotter and hotter summers. This summer has been a warning that we have to go towards a sustainable future fast.”

As many continue to speculate about what is in store for U.K. energy, Andy Burnham has remained silent about the climate crisis since taking office. However, he has appointed Miatta Fahnbulleh, who has a strong track record of climate activism, as Secretary of State for Energy Security and Net Zero. Meanwhile, Labour’s 2024 manifesto ruled out new licences for North Sea exploration, although it stated that existing ones would not be revoked. The ruling that Jackdaw and Rosebank are illegal has called into question whether the project approvals would be classed as new or old.

Insiders have suggested that Burnham might deliver a compromise based on the public consultations, with Jackdaw’s gas project potentially going ahead. The U.K. remains heavily dependent on gas for heating and electricity generation, with many continuing to view it as a “transition fuel”. As extracting gas is less carbon-intensive than oil, it could be seen as less harmful to the environment – although the approval of any new fossil fuel operations has been widely criticised by the International Energy Agency.

The Guardian’s environment editor, Fiona Harvey, explained, “Allowing it to go ahead is far less harmful than Rosebank… And Jackdaw is a tieback, so can be connected to existing infrastructure. “It could therefore come online quicker.”

The oil major BP, which has recently backtracked on many of its green pledges and sold off its North Sea assets, continues to be staunchly in favour of oil and gas expansion. The company’s CEO, Meg O’Neill, told Burnham that as the U.K, continues to get 75 per cent of its energy from fossil fuels, it is important that “the first barrel of oil we consume and molecule of natural gas we need should be coming from the UK North Sea.”

However, environmentalists and climate scientists continue to oppose new oil and gas development, suggesting that investment could be better spent on a green transition that will diversify Britain’s energy mix and boost long-term energy security. Moreover, approving Jackdaw and Rosebank will likely not drive down consumer prices or create a significant number of new jobs.

The UK Energy Research Centre wrote in a recent assessment, “Assertions that drilling the North Sea will provide energy resilience and affordability in the face of current fuel price shocks are a delusion.” Jackdaw is expected to create just 27 direct full-time jobs. Meanwhile, with the U.K.’s energy reserves rapidly depleting, new oil and gas drilling is not expected to support the country’s long-term energy security.

Therefore, if Burnham decides to back new fossil fuel projects, he risks facing a revolt within the Labour Party and staunch opposition from environmentalists, while failing to provide a significant number of new oil and gas jobs or tackle rising energy prices.

By Felicity Bradstock for Oilprice.com

PRIMITIVE ACCUMULATION OF CAPITAL

Somali Piracy Surges Amid Hormuz Blockade

By Alex Kimani - Aug 14, 2026

The effective closure of the Strait of Hormuz has forced hundreds of commercial ships onto longer routes around Africa, and Somali pirates are moving quickly to exploit the sudden increase in traffic off the continent’s eastern coast. Oil tankers MT Honour 25, MT Eureka and MT Asana were hijacked in the Gulf of Aden and off Puntland between April and July 2026, the largest attacks by Somali pirates in years. The Iran war has now delivered these groups more targets, spread across thousands of miles of ocean, while diverting naval resources to the Persian Gulf and Red Sea.

Somali piracy peaked in 2011 before an international crackdown reduced attacks to a fraction of their former levels. The first major revival came in late 2023, when Houthi attacks in the Red Sea forced hundreds of vessels away from the Suez Canal and around the Cape of Good Hope. And with U.S. forces all diverted to the war against Iran in the Persian Gulf, it’s largely a free-for-all for Somali pirates.  Unlike the disorganized bands of the early 2000s, today's Somali pirates are ranging much farther from shore, and their operations have become much more sophisticated. And perhaps even more concerning, according to reports from a UN panel of experts, there is now direct coordination between Yemeni militants and Somali networks.

In exchange for creating maritime chaos to keep Western navies distracted, the Houthis have supplied Somali pirate cells with advanced weaponry, military training and precision GPS tracking devices to pinpoint commercial hulls. Al-Shabaab--one of the most lethal terrorist groups in Africa--provides onshore logistical backing along parts of the Somali coast where pirate gangs launch operations or hold hijacked vessels. Intelligence reports indicate the group receives a generous cut of up to 30% from successful maritime ransom payouts.

According to a joint study by Interpol, the World Bank and the United Nations Office on Drugs and Crime (UNODC), Horn of Africa piracy generated over $400 million in ransom payments from 179 hijacked ships between 2005 and 2012, averaging roughly $2.23 million per ship. The money follows a structured economy, with pirate crews receiving a standard 10% to 15% fee, local financiers claim 30% to 50% for funding food, fuel and weapons, while the rest is laundered into legitimate businesses, according to the study. And it’s only becoming more lucrative with time. 

A June 30, 2026, analysis by the Global Initiative Against Transnational Organized Crime (GI-TOC) reports that ransom demands have been made for all three commercial vessels hijacked in the current wave. The demand for Eureka was reportedly $10 million. Separately, the pirates holding Honour 25 have demanded $3 million for the tanker, cargo and crew. 

GI-TOC says pirates received $1.2 million-$1.5 million for the release of the Chinese fishing vessel Liao Dong Yu 578 in March this year. The same vessel had reportedly generated another $2 million ransom in 2024. GI-TOC says counter-piracy officials believe the latest payment helped catalyze the current wave of attacks.

The Gulf of Guinea is yet another piracy hotspot in Africa thanks to the region’s riches in oil and gas as well as a well-trained militia due the Delta's secessionist movement. While local law enforcement and naval forces have managed to curb attacks in shallower waters, pirates are highly adaptable to new environments. Now, they are using heavily armed mother ships to strike targets well outside state jurisdictions and exclusive economic zones. The region’s pirate networks now operate with military-grade weapons, an intricate shipping intelligence network and complicated financial backing.

War-risk insurance premiums for commercial shipping transiting the Strait of Hormuz and the Persian Gulf spiked by over 1,000%--surging from pre-conflict levels of roughly 0.15%–0.25% of a vessel's value up to 7.5% and 10% per voyage shortly after the closure of the Strait of Hormuz in March.

With African maritime zones highly vulnerable due to a lack of equipment and manpower, and with American forces diverted to the Persian Gulf indefinitely, piracy sees its biggest opportunity yet. It means an African diversion isn’t necessarily going to avoid risk premiums.

By Alex Kimani for Oilprice.com

Mexico Is Betting on Biofuel to Tackle Its Seaweed Crisis

By Felicity Bradstock - Aug 15, 2026

• Mexico is experiencing a record sargassum season, with peak landings on Quintana Roo beaches reaching roughly 9,000 tonnes per day in 2026.
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• The government is investing heavily in offshore collection vessels, containment barriers and greater collection capacity in an effort to intercept more seaweed before it reaches tourist beaches.
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• Researchers and businesses are developing uses for harvested sargassum ranging from fertilizers and biofuels to bioplastics and construction materials.
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Over the past 15 years, Mexico has faced a severe seaweed problem, with vast quantities of a brown seaweed known as sargassum washing up on beaches along the Caribbean coast and hitting the tourism industry hard. Researchers are yet to find an effective way to prevent the seaweed from washing ashore or to effectively predict its movement. As the Mexican government attempts to manage the huge quantities of seaweed each year, researchers are exploring potential uses for the algae, such as biofuel or fertiliser.

As much as 9,000 tons of seaweed is washing up on Mexico’s beaches every day along the Caribbean coast, a popular spot for tourists who contribute heavily to the region’s revenue. Governments across major destinations such as Cancun, Tulum, and Playa del Carmen are fighting to keep beaches clean by using industrial equipment, such as diggers, to clear the seaweed so visitors can continue to use the beaches and swim in the sea. However, this is a daily battle and annual expenditure on sargassum management stands at around $2 billion, roughly equivalent to 11 per cent of the local GDP.

Sargassum smells like rotten eggs and releases methane as it decomposes. While it is not thought to significantly threaten public health, it can affect the health of vulnerable populations and workers who are regularly exposed to the seaweed. Meanwhile, tourists often avoid beaches where the seaweed washes up because of the smell, the inability to swim, and the weed’s visual impact. This has driven many visitors to explore alternative destinations that have not yet experienced sargassum problems, such as Mexico’s Pacific coast.

In July, Mexico’s President Claudia Sheinbaum announced a $115 million plan to combat surging sargassum in the Caribbean. The government plans to deploy two large ships to capture the seaweed before it reaches the coast. Mexico’s navy is also expected to install 30 miles of containment barriers to trap the sargassum at sea in the most critical areas, including Playa del Carmen, Cancún, Tulum, Puerto Morelos and Mahahual.

Meanwhile, workers will continue to shovel up the seaweed that does make it to shore. “The effort so far has been titanic, but we have to do more to prevent sargassum from reaching the beaches,” Sheinbaum said.

Mexican authorities and the private sector currently have the capacity to collect almost 2,200 metric tonnes of sargassum each day at sea and on beaches. The government intends to increase this capacity to around 4,000 tonnes by 2027. In addition, the government is partnering with Japan to tackle the problem. Japan will provide ocean-monitoring technology, specialised equipment including robotics and sensors, and financial cooperation as part of clean-up efforts.

Sargassum has become a major problem in several regions, with parts of the Caribbean and South Florida also reporting large quantities of the seaweed on their shores. As part of the project between Mexico and Japan, researchers will explore the potential to convert the sargassum into commercially viable products, such as fertiliser, biofuels, building materials, and soap, which could help these regions regain access to their beaches.

Mexico’s Environment Minister Alicia Barcena said that out of almost 200 sargassum-related projects, at least 11 had the potential for scaling up industrially and 39 were already making products, including fuel, fertilisers, laminates, and bioplastics to produce sandals.

In July 2025, the Quintana Roo state government announced plans to develop a new facility to monitor and manage Mexico’s sargassum and eventually convert it to biofuel. A Dutch consortium will finance, construct, and operate the Sargassum Centre with the aim of developing new technologies for the biodigestion of sargassum and organic waste to produce biomethane. If successful, it could provide the blueprint for other regions dealing with sargassum to follow.

The chemical composition of the sargassum found along Mexico’s Caribbean coast could also make it suitable for use as an agricultural input. A 2026 assessment by the Inter?American Development Bank (IDB) and the Mexican Institute for Sustainable Fisheries and Aquaculture Research studied the seaweed closely to better understand its potential as an economic opportunity rather than a burden.

Researchers from the Technological Institute of Santo Domingo and the IDB have developed methods to produce energy from sargassum while separating the arsenic contained in the algae. Mexican government departments and university research centres are also exploring the potential to use sargassum as an organic construction material to produce blocks, bricks, paving stones, and asphalt mixtures.

Mexico has invested heavily in cleaning up the huge influx of sargassum over the last decade. Now, the government and private sector hope to effectively analyse the brown seaweed to better understand its potential as a biofuel, fertiliser, or other product, and to develop economic opportunities from something that has so far been seen as a plague that disrupts regional tourist activity and revenue.

By Felicity Bradstock for Oilprice.com

 

India's Coal Demand Set to Hit 1.6 Billion Tons by 2030

By Charles Kennedy - Aug 14, 2026

India’s coal demand is set to jump to 1.6 billion tons in 2030, from about 1.2 billion tons now, due to higher electricity generation and industrial activity, Indian Coal Secretary Vikram Dev Dutt said on Friday.

India, which is the world’s second-biggest coal consumer behind China, plans to create a coal trade exchange and raise in its domestic coal supply to boost market transparency and energy security, respectively.

A local coal exchange will create a transparent marketplace for buyers and sellers and could later lead to the establishment of a market for coal derivatives in India, the secretary said at a commodity industry event in Mumbai.

“Coal demand is projected to rise further to an estimated 1.6 billion tonnes by 2030, and under this situation, where the country has moved from a scarcity scenario to a surplus scenario, a shift that underscores the need for more efficient, transparent and market-driven mechanisms for coal trade,” Dutt said, as quoted by Indian media.

Last year, India’s Coal Ministry proposed to establish a coal trading exchange as domestic coal production jumps with the government push for higher output and sector reforms allowing private firms to operate mines.

Overall coal-fired power generation and capacity installations in India continue to rise, and coal remains a key pillar of India’s electricity mix with about 60% share of total power output.

Despite booming renewable capacity additions, India continues to rely on coal to meet most of its power demand as authorities also look to avoid blackouts in cases of severe heat waves.

Coal will still be a key part of India’s power system for the next two decades, Rajnath Ram, adviser for energy at the government policy think tank, NITI Aayog, said at the end of last year.

“We cannot be subjective about coal. The question is how sustainably we can use it,” the official noted.

By Charles Kennedy for Oilprice.com 

Kazakhstan Accuses Big Oil of $10.7 Billion Corruption in Kashagan Oil Project

By Charles Kennedy - Aug 14, 2026

Kazakhstan has alleged in a confidential arbitration case that some of the biggest international oil firms that have developed the giant Kashagan oilfield awarded $10.7 billion worth of contracts with unjustified cost increases or through bribes, the International Consortium of Investigative Journalists (ICIJ) team reported on Friday, citing multiple sources.

The Kashagan oilfield was developed by the North Caspian Project consortium of international majors and Kazakhstan's state oil firm KazMunayGas. The shareholders in the consortium include KazMunayGas, Eni, Shell, ExxonMobil, TotalEnergies, China's CNPC, and Japan's INPEX Ltd.

The Kazakh government alleges in the confidential arbitration that the Kashagan consortium awarded in the 2000s about a dozen of contracts that contained unjustifiably high costs, or were compromised by bribery and self-dealing, ICIJ reports.

The claim has been registered with the Permanent Court of Arbitration in The Hague, and the tribunal has yet to make any decision on the corruption claims, people with knowledge of the matter told ICIJ.

This claim is the gravest accusation at Big Oil yet in the years-long court dispute between Kazakhstan and the consortium over cost overruns, project delays, and environmental damage at Kashagan.

The allegation of compromised contracts is part of a larger, $160-billion claim, from Kazakhstan against Big Oil over lost production and profits and environmental damages.

Kazakhstan has several arbitration cases with as much as $166 billion in claims against the oil majors for damages, mostly because of lost revenues from delays at the Kashagan oilfield.

The years of disputes have prompted Shell to pause investment in Kazakhstan.

“We are disappointed that we can’t see alignment between the joint venture partners and the government on some of these topics. It does impact our appetite to invest further in Kazakhstan. So we watch the situation with care,” Shell’s chief executive officer Wael Sawan told analysts during an earnings call early this year.

“We think that there’s still a lot of potential investment opportunities in Kazakhstan, but we will hold until we have better line of sight to where things end up,” the executive added.

By Charles Kennedy for Oilprice.com