I. International oil prices and market fundamentals
1. Oil prices continued to fluctuate downward
WTI crude oil futures closed down 1.5% to $61.2/barrel, and Brent crude oil fell 1.3% to $65.8/barrel, mainly due to the accumulation of US commercial crude oil inventories for the third consecutive week (an increase of 3.1 million barrels), and the US dollar index climbed to a new high of 102.1 this year. The market's expectations for the Fed's interest rate hike further suppressed commodity prices.
2. OPEC+ emergency meeting signal
The Saudi Ministry of Energy proposed to hold an OPEC+ emergency meeting to discuss "market stabilization measures", but Russia, the UAE and other countries had ambiguous attitudes. Analysts believe that if oil prices fall below $60/barrel, OPEC+ may be forced to reduce the current production increase plan (originally planned to increase by 410,000 barrels per day).
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II. Policy and geopolitical dynamics
1. The United States expands its oil embargo on Iran
The U.S. Treasury Department has added sanctions on 12 entities involved in Iranian oil transportation, including three Chinese shipping agencies. Iran responded that it had circumvented restrictions through "gray fleets" and RMB settlements, and its crude oil exports to China in April grew 18% year-on-year.
2. The EU accelerates energy transition legislation
The European Commission passed the "Net Zero Industry Act", requiring the use of green hydrogen in the refining industry to be no less than 15% by 2030, and to impose a cross-border carbon tax of 60 euros per ton on high-carbon petrochemical products. Chinese petrochemical companies are accelerating the construction of hydrogen-coupled refineries in Europe to avoid costs.
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III. Corporate strategy and technological breakthroughs
1. China Petroleum's deep-sea exploration breakthrough
The "Deep Sea No. 2" ultra-deepwater gas field was put into production, with an annual gas supply capacity of 5 billion cubic meters, and the world's first floating CCUS platform was built to store 1 million tons of carbon dioxide annually. The project marks a leap in China's independent development capabilities in the South China Sea.
2. Rongsheng Petrochemical layouts the African market
Rongsheng Petrochemical signed an agreement with the Nigerian National Petroleum Corporation (NNPC) to jointly build a 20 million tons/year refining and chemical integration project, with an annual production of 500,000 tons of blue hydrogen equipment, with a total investment of US$18 billion, and aims to cover the West African and European markets.
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IV. China Market and Policy Implementation
1. Remarkable results in combating refined oil smuggling
The General Administration of Customs of China reported the results of the "National Sword 2025" special operation: 120 cases of smuggled refined oil were seized in the first quarter, involving 420,000 tons of oil products, with a case value of more than 2.8 billion yuan, focusing on combating the "ant moving" smuggling along the coast of Guangdong and Fujian.
2. The commercialization of hydrogen heavy trucks is accelerating
The first batch of 100 hydrogen heavy trucks were put into operation in the Lingang New Area of Shanghai, and the retail price of hydrogen dropped to 22 yuan/kg (including subsidies), which is 30% lower than the operating cost of fuel vehicles. It is expected that the number of hydrogen heavy trucks in the country will exceed 10,000 by the end of 2025.
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V. Industry risks and long-term trends
- Impact of green transformation in the aviation industry
According to data from the International Air Transport Association (IATA), global sustainable aviation fuel (SAF) production will reach 8 million tons in 2025, replacing crude oil demand of about 500,000 barrels per day. The mandatory blending policy in the United States and Europe has forced refineries to transform.
- Excessive refining capacity contradictions have intensified
The global refining capacity utilization rate has dropped to 78% (82% in 2024), the operating rate of Chinese local refineries is less than 60%, and industry integration has accelerated. More than 30 million tons of backward production capacity may be eliminated this year.