Oil Updates – crude slips on easing US Gulf supply concerns, weak China inflation

SINGAPORE: Oil prices extended gains on Tuesday amid concerns over Russian and Iranian oil supply and sanctions threats, despite worries that escalating trade tariffs could dampen global economic growth.

Brent crude futures were up 55 cents, or 0.72 percent, at $76.42 a barrel by 10:17 a.m. Saudi time, while US West Texas Intermediate crude rose 50 cents or 0.69 percent to $72.82.

Both contracts posted gains of near 2 percent in the prior session after three weekly losses in a row.

“It’s more financially driven and price mean aversion rather than fundamental. Brent went from over $80 per barrel (in mid-January) to $74 (last week) so its time to take the position again,” LSEG analyst Anh Pham said.

The rebound came amid signs of tightening supplies, ANZ analysts said in a research note.

ANZ analysts noted Russian oil production fell short of its OPEC+ quota in January, easing concerns of an oversupply. Output fell to 8.96 million barrels per day and is 16,000 bpd below its approved levels under the production agreement.

Shipping of Russian oil to China and India, the world’s major crude oil importers, has been significantly disrupted by US sanctions last month targeting tankers, producers and insurers.

Adding to supply jitters are US sanctions on networks shipping Iranian oil to China after President Donald Trump restored his “maximum pressure” on Iranian oil exports last week.

But countering the price gains was the latest tariff by Trump which could dampen global growth and energy demand.

Trump on Monday substantially raised tariffs on steel and aluminum imports to the US to 25 percent “without exceptions or exemptions” to aid the struggling industries that could increase the risk of a multi-front trade war.

The tariff will hit millions of tons of steel and aluminum imports from Canada, Brazil, Mexico, South Korea and other countries.

Trump last week introduced 10 percent additional tariffs on China, for which Beijing retaliated with its own levies on US imports, including a 10 percent duty on crude.

Also weighing on crude demand, the US Federal Reserve will wait until the next quarter before cutting rates again, according to a majority of economists in a Reuters poll who previously expected a March cut.

The Fed faces the threat of rising inflation under Trump’s policies. Keeping rates at a higher level could limit economic growth, which would impact oil demand growth.

US crude oil and gasoline stockpiles were expected to have risen last week, while distillate inventories likely fell, a preliminary Reuters poll showed on Monday.

The poll was conducted ahead of weekly reports from industry group, the American Petroleum Institute, due at 12:30 a.m. Saudi time on Wednesday and an Energy Information Administration report due later that day.

RIYADH: The Argentine Embassy in collaboration with the Riyadh Chamber of Commerce and Industry hosted a seminar at the UN World Tourism Organization’s regional office in Riyadh on Monday, bringing together senior government officials and business leaders from both nations to explore trade and investment opportunities.

The seminar was held on the sidelines of an official visit by Argentina’s Foreign Minister Gerardo Werthein and focused on the country’s newly launched investment framework — the New Legal Framework for Major Investments in Argentina, also known as RIGI — and opportunities available to Saudi companies.

The RIGI program, which offers the global investment community access to projects in key sectors of the Argentine economy, is designed to attract large-scale international investments by offering significant incentives across key sectors, including mining and energy, infrastructure and tourism, technology and advanced industries and manufacturing.

It provides regulatory stability, tax incentives, and long-term predictability for foreign investors, ensuring that businesses operating in Argentina can expand with confidence and access high-growth opportunities.

Daniel Gonzalez Casartelli, Argentina’s deputy minister of energy and mining, said at the seminar that the objectives of the investment incentive scheme were to develop the economy, increase competitiveness, boost exports, and generate employment.

He said the incentives on exchange rate included incremental free exports and unrestricted foreign exchange access for equity and debt repayments. On tax it offered accelerated depreciation; tax loss carryforward without expiration date; income tax decrease to 25 percent compared to a general rate of 35 percent; VAT exemption for capex; and tax on dividends reduced to 3.5 percent after seven years of joining the RIGI, with the general rate at 7 percent.

The incentives on customs include full exemption from export duties, starting in the third year; exemption from tariffs on capital goods imports; and tariff and import quota exemptions for the value chain of RIGI projects.

Companies that adhere to the RIGI will benefit from a 30-year stability period, and evaluation of RIGI applications is guaranteed within 45 business days.

The minimum investment amount is $200 million, and companies should invest at least 40 percent of it in the first two years of the project.

Speaking to Arab News, Matias Javier Mana, the undersecretary of international financial relations for development at the Argentine Ministry of Economy, and who is part of the delegation, said: “We came with a very important delegation to present to Saudi investors very specific incentives, (a) large investment incentive regime that is part of our macro-economic program that will show the investors how we will give them benefits and also some certainty and regulation for them to have a safe environment to invest in Argentina.

“Those incentives include goals from tax reductions to customs, facilitated treatments and also legal protections, international arbitration and also some specific regimes for all the supply chains that are somehow related to the project presented.”

He added: “It’s a regime that only considers projects or investments of over $200 million. The main sectors that we have identified and that are acceptable … within this regime are oil and gas, midstream mining, renewable energy, tourism, AI, and nuclear energy.

“As for us, all these sectors represent what we intend to develop and all the potential opportunities that Argentina can offer to international investors; in this case Saudi Arabia.

“This is all within the mission that we are currently undergoing in Saudi Arabia, led by our minister of foreign affairs with the Saudi Arabian government (which is) in order for us to design a road map of bilateral exchanges and strengthen the cooperation and relationship between our countries.”

Demian Reidel, the chief of advisers to the Argentine president, and who is also a member of the visiting delegation, told Arab News: “I oversee a wide portfolio with the main interest in AI and nuclear energy, and I am here with the delegation to facilitate everything that covers these interests.”

Facundo Vila, the ambassador of Argentina to the Kingdom, told Arab News: “The delegation is here about the new incentives regime for large-scale investments in Argentina.

“They include the secretaries of energy and mining, because those are the two key sectors in which we think Argentina has a lot to offer.

“The presentation focused on the main advantages that investors and prospective foreign investment would enjoy in Argentina.

“We believe it (the RIGI) is a very good opportunity in areas in which Saudi has a lot of expertise, oil and gas for example.

“We have a big oil base in Argentina but that needs to be worked on and they need capital infrastructure to make it work.”