Latest Commodity News

Electricity exports from Russia have decreased by approximately 4% this year, primarily due to a significant decline in supplies to China. The head of InterRAO, the state energy holding responsible for Russia's electricity export and import operations, indicated that these exports are also expected to fall by a similar percentage in 2025. This decline in 2024 was notably marked by a 17.6% drop, resulting in total exports of 8.53 billion kilowatt-hours, largely influenced by restrictions within the Russian Far East's power system.

Kazakhstan has emerged as the largest market for Russian electricity exports, accounting for nearly 54% of the total in 2024. Despite the reduction in overall exports, volumes to Kazakhstan and Mongolia are anticipated to stay relatively stable. As of mid-June, a decrease in exports to China was noted, with expectations that overall exports would mirror the previous year with a modest decline.

The future of Russia's electricity exports relies on multiple factors, including electricity prices both domestically and internationally, as well as fluctuations in the rouble exchange rate. Significant constraints have led to a 44% drop in exports to China since the start of 2025. This is attributed to increasing domestic electricity demand and depletion of resources in hydroelectric reservoirs, with predictions that exports to China will remain lower than in 2024. In contrast, production in Russian assets is projected to see growth in 2025.

India's coal stock at thermal power plants has hit an unprecedented level of 58.25 million tonnes, ensuring energy security for about 25 days of consumption before the upcoming monsoon season. This increase in coal reserves is significant as the monsoon often disrupts coal mining and transport, potentially impacting power generation.

The country, recognized as the second-largest consumer of coal globally, is actively boosting its domestic coal production. This initiative aims to satisfy the increasing demand for electricity and lessen the dependence on imported coal, supporting India's energy infrastructure.

Despite the heightened production, the share of coal in India's overall power generation mix has seen a decline, dropping to 70.7% in May from 74.0% a year prior. This decrease marks the lowest coal generation level since June 2022, highlighting the ongoing transition towards incorporating more non-fossil fuel energy sources while still planning to expand coal capacity in the coming years.

Europe is facing a challenging position regarding its relationship with the United States and Israel amid the ongoing conflict with Iran. European foreign ministers are meeting to discuss their approach, emphasizing the need for diplomacy and direct talks between the US and Iran. Despite being caught off guard by recent US strikes on Iran, Europe aims to maintain its role as a mediator, fostering communication rather than confrontation. There is an underlying sense of humiliation as European diplomatic efforts appeared futile in the face of American actions.

The European Union (EU) continues to cling to the Joint Comprehensive Plan of Action (JCPOA), a deal designed to limit Iran's nuclear capabilities in exchange for sanctions relief. However, this agreement has suffered setbacks, particularly under the Biden administration, which continues to adopt a hardline stance. While the EU officials acknowledge that the snapback sanctions option remains on the table, there is skepticism about its implementation. The sentiment among European leaders is that genuine diplomatic engagement may be the only viable path forward.

In addition to the broader diplomatic concerns, there is discussion of potential actions such as a European weapons embargo on Israel and suspending trade agreements due to alleged human rights abuses in Gaza. However, divisions within the EU make such actions unlikely. Furthermore, Europe is cautious about criticizing its transatlantic allies, particularly the US, as it seeks to balance its diplomatic relations while navigating the geopolitical landscape leading up to a crucial NATO summit.

The U.S. Senate is facing challenges with a significant tax and budget bill due to provisions requiring 60 votes for passage. Specifically, a provision that allows offshore oil and gas projects to bypass federal environmental reviews has been flagged by Senate parliamentarian Elizabeth MacDonough as needing the higher vote threshold. This requirement stems from the Byrd Rule, which aims to prevent extraneous matters from complicating the federal budget process.

MacDonough has identified several controversial provisions, including those that would authorize land sales and expedite gas export payments, which must also clear the 60-vote requirement. Notably, there are efforts underway by Republican leaders, including Senate Majority Leader John Thune, to push the bill—known as the OBBB Act—through Congress before the July 4 holiday.

Skepticism about the final outcome of the bill is present among Senate members as they navigate the reconciliation process. Some provisions, such as the rollback of emissions regulations and changes to environmental permitting for companies, have also been deemed in need of a 60-vote consensus. Democrats have expressed strong opposition to the Republican strategies aimed at altering public land management as a means of funding tax cuts for wealthy individuals.

Russia is exploring the possibility of utilizing its surplus natural gas to power artificial intelligence data centers and cryptocurrency mining operations as its gas exports to Europe have dramatically fallen. Since 2022, pipeline gas supplies to the EU have dropped significantly due to Russia halting deliveries to several customers and issues like the sabotage of the Nord Stream pipeline.

Alexei Chekunkov, the Minister for the Development of the Russian Far East and Arctic, recently expressed the urgency of addressing the excess gas that is no longer reaching the West. He highlighted that the country possesses a substantial amount of gas, which he proposed could be redirected to support initiatives like crypto mining.

Nevertheless, Pavel Sorokin, the First Deputy Energy Minister, indicated that the economics of using natural gas for these operations are not favorable. He mentioned the rising costs associated with gas extraction and suggested that coal might be a better energy source for powering data centers. Sorokin remarked that while gas may seem inexpensive, costs are increasing, and alternatives should be considered for effective resource utilization.

Mauritius is seeking international investors to establish and operate a floating power plant to address its increasing energy needs. A tender has been issued by the state-owned Central Electricity Board, indicating the nation's urgent requirement for an additional 100 megawatts of electricity by January next year.

The proposed floating plant will run on heavy fuel oil and aims to diversify energy sources while ensuring greater security of supply. Public Utilities Minister Patrick Assirvaden highlighted the need for this initiative to meet the rising demand for energy within the country.

The contract for the floating barge plant is expected to last for five years, with plans for it to be anchored near the capital, Port Louis, and connected to the electrical grid. The tender is open for proposals until August, although the document did not specify the projected cost of the plant.

European Union diplomats are anticipating a deal on an 18th package of sanctions against Russia at an upcoming summit. These sanctions are part of the EU's ongoing efforts to compel Russia to negotiate a ceasefire in Ukraine. The proposed package aims to target Russia's energy revenues more significantly, specifically by including banks and tackling the shadow tanker fleet that supports energy exports.

At the summit, EU leaders will discuss the proposed energy ban, which has raised concerns particularly from Slovakia and Hungary. Slovak Prime Minister Robert Fico expressed that he might block the sanctions unless the energy concerns are addressed, worrying that cutting off Russian gas could lead to increased prices in central Europe.

Slovakia is seeking a mechanism to limit EU transit fees and guarantees against gas shortages, showing the need for tailored treatment for landlocked countries. Meanwhile, the Slovak state-owned gas importer, SPP, is concerned about potential compensation claims from Gazprom if there is a ban on Russian gas imports, further complicating the discussions around the sanctions.

Oil prices have experienced a significant decline following a swift ceasefire agreement between Israel and Iran, though the peace remains unstable. The immediate reaction in the oil market was a drop of $6.5 per barrel, bringing ICE Brent down below the $70 mark. The situation is a departure from previous volatility seen in recent years, particularly since the summer of 2022, as the closure of the Strait of Hormuz has been avoided for now.

In the United States, electricity demand is predicted to reach levels last seen in 2013 due to rising temperatures, with consumption potentially hitting 158 GW. This surge in demand, coupled with an increase in natural gas consumption to 47.5 billion cubic feet per day, has slowed the rate of natural gas storage injections. On the trading side, Henry Hub gas futures remained stable despite the geopolitical tensions, suggesting limited immediate impact on natural gas pricing.

Several key industry developments emerged, including a non-binding agreement between Glenfarne and Thailand for the Alaska LNG project, and Eni's plan to spin off its Italian refining operations. BP has halted its hydrogen project at Whiting refinery, while Keyera has announced a significant acquisition of Plains All American's NGL business. Additionally, India has reached record levels of crude imports, while European companies operating in Iraq are evacuating personnel amid security concerns.

Market conditions also indicate a resurgence in thermal coal prices as LNG prices ascend, and insurance rates in the Middle East have markedly risen due to regional tensions. The demand for cobalt has spiked in response to extended export bans in Congo, while LNG freight rates have surged due to tightness in tanker availability. Moreover, China's push for solar energy continues to expand, and Niger has nationalized a French-operated uranium mine, impacting global uranium supply dynamics.

A precautionary alert was issued for the electric grid serving Boston and its surrounding region due to an anticipated reduction in power surplus amid soaring temperatures. The alert began on Monday, as energy supplies were expected to tighten significantly.

Wholesale electricity prices surged dramatically, reaching nearly $430 per megawatt hour (MWh), a stark ten-fold increase compared to standard pricing when the grid is not under stress. In order to maintain electric reliability, power plant operators were instructed to halt any testing or maintenance activities.

New England, experiencing extreme heat, employed strategies similar to those of other regional grids to balance supply and demand for electricity. This included increasing imports, deferring maintenance, and activating standby units. Electricity demand was forecasted to peak at around 25,800 megawatts (MW), with surplus capacity anticipated to drop to just 266 MW, much lower than the usual buffer.

Oil and gas companies in Alberta have surpassed the province's self-imposed limit on natural gas flaring for the second consecutive year, as reported by Reuters. Flaring, which involves the controlled burning of natural gas during oil production and processing, was regulated in Alberta for the past 20 years until the recent removal of the limit.

The Alberta Energy Regulator (AER) announced the scrapping of the flaring limit through a ministerial order issued by Environment Minister Rebecca Shulz. In 2024, it was estimated that energy companies in Alberta flared approximately 912.7 million cubic meters of natural gas, exceeding the previous limit of 670 million cubic meters by 36%. This follows a flared volume of 753 million cubic meters in 2023, indicating a trend of non-compliance with the established limit.

The decision to lift the flaring restriction is based on the belief that the original rule does not reflect the significant growth in Alberta’s oil production over the last two decades, as well as other measures taken to reduce emissions. At the same time, Alberta Premier Danielle Smith is seeking private investment for a new crude oil pipeline, which is intended to transport around 1 million barrels per day to British Columbia, aiming to enhance export capabilities to markets outside the U.S. amid challenging trade relations.