US House budget bill seeks more than $1.5 billion for Strategic Petroleum Reserve

 A U.S. House committee released a budget proposal that includes more than $1.5 billion to replenish and maintain the Strategic Petroleum Reserve, and cancels a congressionally mandated sale, following huge sales from the facility in 2022.

The proposal from the House Energy and Commerce Committee released late on Sunday contains $1.32 billion to purchase oil to help replenish the SPR, the world’s largest emergency stockpile of crude, and $218 million for maintenance of the facility.

U.S. Energy Secretary Chris Wright had estimated in March that it would take $20 billion and years to accomplish U.S. President Donald Trump’s goal of filling the SPR, a move that would help domestic energy producers amid relatively low oil prices. The facility has the capacity to store about 727 million barrels and currently holds about 399 million barrels.

The House committee is controlled by Trump’s fellow Republicans and this move is part of a wider proposal to cut grants and loan financing in former President Joe Biden’s landmark climate law, the Inflation Reduction Act.

Biden, a Democrat, sold a record 180 million barrels from the SPR in 2022 after Russia, a leading oil producer, invaded Ukraine, bringing the reserve down to its lowest level in 40 years.

The House measure, which faces a committee vote on Tuesday, also repeals a congressionally mandated sale of 7 million barrels from the SPR through fiscal year 2027. The Biden administration had worked with Congress to cancel congressionally mandated sales to help keep levels in the SPR from falling.

The Department of Energy also issued a proposal in the Federal Register on Monday that would allow the government to buy oil for the SPR at an indexed price, instead of a fixed price – meaning the actual price of the oil could move higher or lower with the market.

The Biden administration had adopted a fixed-price rule, arguing that it helped in arranging quick purchases for the reserve.

The DOE said in the new proposed rule that fixed-price contracts have “only served to unnecessarily create confusion in the industry.”

By: Reuters / May 12, 2025

Mexico’s Pemex Swings to $2 Billion Loss as Production, Sales Slum

Pemex, Mexico’s heavily indebted state energy company, reported an 11.3% drop in first-quarter production of crude and condensate on Wednesday as falling sales and foreign-exchange losses contributed to a 43.3 billion peso ($2.12 billion) net loss.

In a filing with Mexico’s stock exchange, Pemex, one of Mexico’s largest companies, attributed the production slump to the decline of mature wells and delays in new well completions.

During the first quarter, Pemex and its partners pumped 1.62 million barrels per day (bpd) of crude oil and condensate. The company processed 936,000 bpd in its local refineries, down 5% compared to the year-ago period.

Mexican President Claudia Sheinbaum has pledged to raise production to 1.8 million bpd, although older fields, particularly in the Gulf of Mexico, are being depleted and more recent discoveries have failed to compensate.

On a call with analysts, Pemex’s corporate planning chief, Jorge Alberto Aguilar, said the company was working to reach the 1.8-million-bpd goal by the end of the year and maintain it at that level.

Sheinbaum, who will govern until 2030, has said domestic crude production will ensure Mexico can produce the gasoline it needs and end its dependence on motor-fuel imports.

Production has been falling for several months. Pemex has not been within the government’s production target since March 2024, when it pumped 1.81 million bpd.

A series of contracts for joint ventures with private companies is being prepared to increase pumping, they added, noting that Pemex will have at least a 40% stake.

Revenue during the January-to-March period fell 2.5% to 395.59 billion pesos, mainly due to lower crude oil sales volumes, Pemex said.

Pemex said foreign-exchange losses and rising costs played roles in its swing to a net loss.

In the quarter, its refining unit yielded 305,000 bpd of gasoline and 171,000 bpd of diesel.

PEMEX AIMS TO REDUCE DEBT BALANCE

Pemex said its financial debt for the three-month period totaled $101.1 billion, up from the $97.6 billion reported in the fourth quarter of 2024.

Already the world’s most indebted energy company, Pemex has received billions of pesos in government support. The company said it received 80 billion pesos in government support in the first quarter.

The funds were mainly used to pay down debt. Pemex said its goal “is to reduce the financial debt balance over the course of the year, resulting in a lower balance at the end of 2025 versus the end of 2024.”

The company said that 136 billion pesos in transfers from the government were approved for amortizations.

Pemex also reported a decline in drilling activity, completing during the first quarter 12 development wells and five exploratory wells, down from 16 and eight wells, respectively, in the same period in 2024.

Executives of the state-owned giant did not mention on Wednesday whether the drop in well drilling levels had any relation to the debts to suppliers, which reached $19.9 billion at the quarter’s close.

In late 2023, local industry groups said Pemex’s ballooning debt to its oil service providers and private oil and gas producers was threatening hydrocarbon production and the survival of companies.

Executives said that Pemex will continue to make payments to suppliers and that it is working with the Finance Ministry to seek ways to manage financial and commercial liabilities.

By: Reuters / May 06, 2025.

California refinery closures panic politicians

California could lose up to 17pc of its refining capacity within a year, triggering major concerns about its tightly supplied and frequently volatile products market.

US independent Valero announced on 16 April that it will shut or repurpose its 145,000 b/d Benicia refinery near San Francisco by April 2026. The firm is also evaluating strategic alternatives for its 85,000 b/d Wilmington refinery in Los Angeles. And independent Phillips 66 said in October that it would shut its 139,000 b/d Los Angeles refinery in the fourth quarter of this year.

Valero’s Benicia announcement brought a quick reaction from state officials. Governor Gavin Newsom on 21 April urged regulators at the California Energy Commission (CEC) to work closely with refiners through “high-level, immediate engagement” to make sure Californians have access to transport fuels. He has ordered them to recommend by 1 July any changes to California’s approach that are needed to ensure adequate fuel supply during its energy transition.

The message appears to have hit home. The CEC delayed a vote on new refinery resupply rules to provide time for additional feedback and consultation with stakeholders after the Valero announcement. The CEC also plans to introduce a rule this year for minimum inventory requirements at refineries in the state as well as possible rules on setting a refiner margin cap.

The new rules are part of an effort by Newsom to mitigate fuel price volatility in California, including the signing of two pieces of legislation known as AB X2-1 and SB X1-2. Refiners have been unhappy with the state’s regulatory and enforcement environment for some time. It is “the most stringent and difficult” in North America owing to 20 years of policies pursuing a move away from fossil fuels, Valero chief executive Lane Riggs says.

The long and short of it

Refinery closures are fuelling long and short-term supply concerns in California. The most immediate is an anticipated supply crunch at the end of this summer. Phillips 66’s plan to shut the Los Angeles refinery by October will deal a significant blow to the state’s refining capacity and is likely to occur at a time when Californian gasoline prices are most prone to volatility.

The US west coast is an isolated market, many weeks sailing time from alternative supply sources in east Asia or the US Gulf coast. California’s strict product specifications further limit who can step in when refinery output falls. The state sometimes sees price spikes in late summer and early autumn because the switch from summer gasoline blends leaves local inventories low while in-state refineries adjust to producing winter grades.

California gasoline prices spiked in September 2022 when stocks fell to a nine-year low on the west coast. Spot deliveries hit a record $2.45/USG premium to Nymex Rbob futures in the Los Angeles market at the time (see graph). Production problems at several refineries in southern California led to another spot price surge in September 2023. The California Air Resources Board (Carb) permitted an earlier switch to cheaper winter gasoline production in response to both events.

Refinery closures will force California to rely on imports in the longer term, leaving the state exposed to stretched supply lines. State regulators’ proposed solutions have raised eyebrows. The CEC’s Transportation Fuels Assessment report in August last year included a policy option in which California would buy and own refineries, which the state is not pursuing. Another option involves state-owned products reserves to allow rapid deployment of fuel when needed. The CEC and Carb regulators will also release a draft transportation fuels transition plan later this year.

By Eunice Bridges and Jasmine Davis , Argusmedia, 05 May 20205.

Need to build robust industrial supply chain security while considering emerging technologies

As the industrial sector advances into 2025, industrial supply chain security is increasingly likely to be defined by mandatory SBOMs (Software Bill of Materials), regulatory scrutiny, and the rise of AI (artificial intelligence) and advanced technologies. Cyber adversaries are also expected to be active this year, as they aim to react to new political developments and prove their continued ability to take action. 

Adoption of emerging technologies such as AI, ML (machine learning) and IoT (Internet of Things) will change the processes by which companies will protect their supply chains and offer real-time monitoring, as well as predictive analytics, with precursors, which will help to uncover vulnerabilities.

Increase in the technical sophistication and number of cyber threats and threats is also pushing awareness of industrial supply chain vulnerabilities. Escalations of adversarial attacks generate the need for preventive actions, since the effects can be cascading and serious. Companies must balance efficiency with strong cybersecurity protocols, making risk mitigation strategies like segmentation and access controls essential.

Organizations are adopting industry standards and regulations to bolster supply chain security, enhancing trust among stakeholders and partners. Adhering to established guidelines ensures a unified risk management approach, enabling critical businesses to navigate the complexities of integrated supply chains.

In this changing environment, it is only by linking cybersecurity with the operational objectives that resilient supply chains will be established and prepared for disruptions. The investment in training, awareness programs, and continuous improvement will further solidify these efforts and usher in a new era of secure, efficient, and adaptive industrial supply chains facing the changing nature of challenges. By blending innovation and security, organizations are more likely to determine the resilience and competitive advantage of industrial organizations preparing for the future.

Key industrial supply chain security trends and strategies for 2025

Industrial Cyber reached out to experts in the industrial supply chain space to highlight the major trends set to transform industrial supply chain security by 2025, and explore strategies for organizations to proactively address emerging threats.

Matt Wyckhouse, CEO of Finite State told Industrial Cyber that in 2025, three trends will define industrial supply chain security – mandatory SBOMs; regulatory scrutiny; and growth of AI and advanced technologies. 

“With the EU CRA coming into effect, SBOMs will become standard practice. These documents, paired with machine-readable vulnerability feeds, will give organizations a clearer view of software components and risks,” Wyckhouse said. “Heightened government oversight will require deeper transparency and better compliance measures across critical infrastructure. We expect to see increased harmonization of standards worldwide, making proactive risk management even more essential.”

He also mentioned that AI will accelerate threat detection and response, but also create new exploit paths like data poisoning and adversarial attacks.

To stay ahead, Wyckhouse identified that organizations need automated processes for collecting SBOMs, analyzing vulnerabilities especially in legacy software, and integrating security controls into every stage of product development.

Robert Kolasky, senior vice president for critical infrastructure at Exiger told Industrial Cyber that industrial supply chain security is on the top of the agenda in 2025 because of the actions of the Chinese government, as it relates to the ‘typhoon’ campaign to breach communications networks and other critical infrastructure for the purpose of espionage and – more concerning – potential disruption of critical functions. “Third parties and supply chains have been a critical attack mode utilized by Chinese cyber actors as well as others,” he added. 

“At the same time, there is pressure on the industrial organizations to demonstrate that they are aware of critical suppliers and their underlying security – including with product assurance,” Kolasky highlighted. “Amongst the trends in 2025 will be advancement of software bills of material maturity, innovation in analytic tools to assess SBOMs, attestation of secure software development practices and contractual requirements.” 

In 2025, Kolasky expects to see more attention on ‘proving’ industrial supply chain security for critical infrastructure that supports national security and market-based approaches to incentivize enhanced security. “To stay on top of emerging threats, organizations need to maintain strong information sharing channels and prioritize participation in relevant Information Sharing and Analysis Centers (ISACs).”

“In oil and gas, tighter OT/IT convergence, AI-driven security tools and stricter regulatory requirements are reshaping supply chain security,” Syed M. Belal, global director of OT/ICS cybersecurity strategy at Hexagon’s Asset Lifecycle Intelligence division, told Industrial Cyber. “Organizations can stay ahead by adopting proactive threat detection, fostering collaborative partnerships with vendors and ensuring regular risk assessments to adapt to evolving threats.” 

AI, ML and IoT: Reshaping industrial supply chain security

The executives examine how the swift integration of AI, ML, and IoT technologies will reshape opportunities and vulnerabilities in industrial supply chain security.

Wyckhouse noted that AI and machine learning offer incredible opportunities for real-time threat detection and remediation. These technologies excel at sifting through massive datasets—spotting anomalies faster than humans ever could— and can significantly reduce false positives.

“However, the explosion of IoT devices in industrial contexts widens the attack surface significantly. Each connected sensor or controller introduces potential entry points that aren’t always covered by traditional IT security,” Wyckhouse remarked. “Additionally, AI itself is vulnerable to sophisticated manipulations, including adversarial attacks that confuse algorithms or data poisoning that corrupts machine learning models. To mitigate these risks, organizations must invest in specialized IoT/OT security solutions, robust testing of AI models, and a clear incident response plan that addresses AI-specific threats.”

Kolasky identified that these new technologies are all related to automation, seeing patterns, and learning faster. “By definition, they should both improve the ability of attackers and defenders. In the case of industrial security, the unfortunate reality is too often the attacker innovates more quickly than the defenders, so artificial intelligence may identify additional vulnerabilities and learn from exploit attempts.”

He added that the challenge for defenders is to use these technologies to better map supply chains and critical points to ensure they are hardened and monitored and – when incidents do occur – contained.

“AI/ML enables advanced threat detection and predictive maintenance in oil and gas operations, reducing downtime risks,” Belal said. “However, IoT expansion increases vulnerabilities. Integrating AI tools with cybersecurity frameworks enhances resilience, while strong vendor alliances can offer tailored solutions to address specific threats and operational needs.”

Cyberattack hotspots: Vulnerabilities in industrial supply chain

The experts identify the most vulnerable areas of the industrial supply chain to cyber threats and explain how attackers exploit these weaknesses. They also predict which types of cyberattacks are likely to prevail in 2025.

Wyckhouse pointed out that attackers frequently target embedded systems and IoT devices, which are often overlooked by traditional security platforms, third-party software components, and CI/CD (Continuous Integration/Continuous Delivery) pipelines. Legacy software is also a popular attack point, as older systems rarely receive patches or updates, leaving known weaknesses open for exploitation.

“In 2025, we expect continued dominance of ransomware and supply chain attacks. Ransomware remains profitable and highly disruptive, while supply chain attacks offer adversaries the chance to infiltrate multiple organizations simultaneously,” Wyckhouse said. “We also anticipate more attacks on AI systems as adoption grows and persistent threats against critical infrastructure.”

Kolasky remarked that the parts of the industrial supply chain most susceptible to cyber threats start with areas that are heavily software dependent and crucial to real time operations, which can include logistics management systems, enterprise resource planning, and related security and safety providers. “All of these are closely integrated with business operations and thus are potential targets from motivated adversaries. These systems also operate largely in the cloud, which means the ways that they are deployed and interact with CSPs creates a cyber vulnerability.”

“The attacks that are likely to dominate are opportunistic attempts of deploying ransomware and strategic exploration that can be seen as a precursor to enhanced geopolitical conflict,” Kolasky noted. “Adversaries are likely to be active this year, as they will want to be responsive to new political factors and demonstrate that they are still capable of acting.”

Belal said that third-party vendors, legacy OT systems and IoT devices in oil and gas are susceptible to attacks. Threat actors exploit these through ransomware, phishing and supply chain-specific malware. 

In 2025, he pointed out that ransomware-as-a-service and advanced OT-targeted attacks will dominate. Regular assessments and targeted security controls are crucial for risk mitigation.

Addressing lessons learnt, consequences of supply chain breaches

Reflecting on past supply chain breaches, the executives focus on the most critical operational and financial consequences industrial organizations should prepare for.

Wyckhouse mentioned that past breaches illustrate there are four main consequences industrial organizations need to prepare for. These include operational disruptions like halted production lines, disrupted product deliveries, and compromised critical control systems; financial losses from ransoms, system restoration, regulatory fines, legal ramifications, and reputational damage; supply chain instability due to a compromised vendor; and loss of intellectual property and sensitive data.

Kolasky said that supply chain breaches are most significant when they are used to cause operational shutdown, which can occur via ransomware or other malware that is used to shut down connections that impact operating systems or to obfuscate availability of information which could prevent the ability of organizations to operate their core systems safely.

“In industrial cyber, when a security incident becomes a potential safety incident that is the most significant concern,” according to Kolasky. “This also crosses over with regulatory requirements and avoiding liability, which can have significant negative financial consequences. Organizations need to account for these downsides by being proactive in demanding and demonstrating transparency with their suppliers.”

“Supply chain breaches in oil and gas can cause operational shutdowns, environmental risks, regulatory penalties, and reputational harm,” Belal said. “The Colonial Pipeline breach demonstrated how disruptions cascade through operations and the economy. Organizations should prepare by enhancing incident response plans, focusing on asset visibility, and fortifying supply chain resilience.”

Blending industrial supply chain efficiency with cybersecurity

The executives offer practical strategies that industrial organizations can adopt to balance maintaining supply chain efficiency with implementing strong cybersecurity defenses. They also discuss the most effective approaches for mitigating risks.

Wyckhouse said that organizations can strike a balance between efficiency and implementing robust cybersecurity defenses by focusing on ‘shifting left’ and integrating security from the earliest stages of development; automating SBOMs, binary analysis, and vulnerability scanning within CI/CD pipelines so these tasks become routine rather than disruptive; and investing in real-time monitoring to detect anomalies early. He also called for focusing remediation efforts on the highest-risk vulnerabilities, and enforcing multi-factor authentication, least-privilege policies, and strict vendor access policies to reduce the impact of compromised credentials.

He added that proven approaches include DevSecOps (embedding security into every aspect of software development), adopting standards-based programs (like IEC 62443 or ISO 27001), and continuous employee training at all levels.

“The first practical strategy is to know your vendors and their vendors and regularly evaluate how they are used in your systems to understand which are the most critical in terms of importance to operations and system connectedness and access,” Kolasky said. “For the most critical vendors, their cyber security posture needs to be assessed and monitored using best in class technology.” 

From there, Kolasky added that organizations should put in place contract language, where possible, that demands attestation of good cyber security and secure by design processes as well as information sharing about any cyber incidents that occur – to include sharing of software and hardware bills of materials. “These bills of materials can be used to identify risk factors and possible correlations to vulnerabilities, which can enable conversations between organizations and their suppliers and, as mandated by contract, corrective actions.”

Belal said that strategies include segmenting OT/IT networks, leveraging real-time threat detection tools, and conducting supplier security audits. “Embedding cybersecurity into design processes, supported by AI-enabled monitoring tools, helps maintain efficiency while ensuring robust defenses. Collaborative efforts across the supply chain also enhance collective resilience.”

Leveraging industry standards, regulations for industrial supply chain protection

The executives examine how organizations can utilize industry standards and frameworks, such as NIST, ISO, or CMMC, to bolster supply chain security while preserving operational efficiency. They emphasize effective strategies that can harmonize compliance, risk mitigation, and supply chain performance.

“Standards like NIST, ISO, and CMMC provide a structured roadmap for identifying and mitigating risks in industrial environments,” Wyckhouse said. “Organizations that map their security programs to these frameworks can more easily demonstrate compliance, allocate resources effectively, and integrate security measures into daily operations.” 

He added that key steps include aligning internal processes, like secure coding practices, vulnerability scanning, and incident response, to recognized frameworks; using tools that automatically track controls, generate SBOMs, and document adherence to requirements to reduce manual overhead and maintain continuous security; and performing regular risk assessments, focusing on high-impact improvements first. 

Kolasky said that industry standards and frameworks provide the common language by which organizations can communicate with suppliers about security needs and practices. 

“Organizations can utilize supply chain risk capabilities to assess risk factors with critical suppliers and ensure that their most critical vendors and others that present high- and medium-risk follow accepted industry standards,” he added. “This should not add additional compliance burden if the standards are already in place, which limits the need for new evaluations for every vendor and for vendors to do bespoke assessments for every new contract.”

Belal said that industry standards such as NIST CSF and ISO 27001 offer structured guidelines for risk management and incident response. “Organizations can ensure robust security while maintaining efficiency by integrating these standards into operational workflows and automating compliance processes. Periodic reviews and gap analysis help balance compliance with performance needs,” he concluded.

By: Anna Ribeiro, Industrialcyber / 05 May, 2025.

Saudi Arabia can control oil supply. Demand could be its Achilles heel

Saudi Arabia has signalled it is willing to enter a painful price war to assert dominance over other oil producers, but worsening global economic conditions mean the kingdom’s standard playbook might be less effective this time around.

Saudi Energy Minister Prince Abdulaziz bin Salman in recent weeks has appeared to threaten an all-out price war to restrain recalcitrant OPEC+ members that have failed to comply with the alliance’s production quotas.

The strategy appeared to shift into a higher gear over the weekend. On Saturday, six key members of the Organization of the Petroleum Exporting Countries plus Russia and Kazakhstan agreed to rapidly unwind production cuts for a second consecutive month.

The decision to add 411,000 barrels per day of oil in June means that between April and the end of next month, OPEC+ will have added 960,000 bpd into the market, which is already well supplied.

OPEC+ sources have told Reuters that the group could further accelerate the production hikes and bring back to the market as much as 2.2 million barrels per day by November.

The OPEC+ moves shocked the market, pulling benchmark Brent crude prices below $60 a barrel on Monday, a threshold beneath which many producers will struggle to make money.

Even more ominous, oil future prices from October onwards are now in a contango structure, whereby crude prices for future delivery are trading at higher prices than contracts for closer delivery, indicating market expectations for long-term oversupply.

This will likely make oil producers think twice before investing in new production, and could lead many short-cycle U.S. shale producers to cut activity.

SAME OLD STORY?

On its face, this looks like a familiar pattern. In 2014, Saudi Arabia launched a market share war to strangle soaring U.S. shale production. In 2020, it clashed with Russia at the peak of the coronavirus pandemic.

And today the kingdom is allowing more supply to flood markets at a time when it is upset with Kazakhstan, Iraq and possibly the United Arab Emirates for repeatedly exceeding production quotas under an OPEC+ supply agreement.

But the 20% drop in oil prices since the start of this year has arguably been driven mostly by concerns over the global demand outlook due to U.S. President Donald Trump’s trade war, particularly the spat with China.

Slowing freight activity between the world’s two largest economies and warnings from big-name multinationals suggest that tensions could persist for months, if not years.

So there is no guarantee that a sharp drop in oil prices will spark a meaningful surge in demand.

Instead, producers could potentially end up fighting for share of a shrinking oil demand pie. This could produce further price volatility and threaten to undermine Riyadh’s longstanding control of the market.

Perhaps a better parallel can be drawn from late 1997, when OPEC raised members’ production quotas sharply only months before the Asian financial crisis hit, leading to a 50% drop in oil prices over the following 12 months as demand crumbled.

VOLATILITY BUSTER

Saudi officials have been telling market participants behind closed doors that the kingdom is willing and able to withstand a price downturn.

This is partly thanks to the country’s ability to access debt. Saudi Arabia’s Public Investment Fund (PIF) has raised $11 billion in sukuk, or Islamic bonds, so far this year and is looking to raise up to an additional $2 billion in the coming weeks, according to Reuters.

But Riyadh would likely have to make uncomfortable sacrifices to withstand a sustained drop in prices.

Even though its oil production costs are among the lowest in the world, it also requires a crude price of over $90 a barrel to balance its national budget, according to the International Monetary Fund’s assessment of the 2025 budget.

And protracted market weakness could make OPEC+ members restless. That risks blowing up an alliance that has become a central tenet of Saudi Arabia’s foreign policy in recent years.

So Saudi Arabia can start a price war, but with Washington now the biggest factor in the demand equation, Riyadh may struggle to win it.

By Ron Bousso, Reuters / May 5, 2025

Saudi Arabia, India to deepen energy ties, to set up two oil refineries

An accord was reached to establish two oil refineries in India through a joint venture between the countries, India’s Ambassador to Saudi Arabia Suhel Ajaz Khan said in a briefing

Saudi Arabia and India agreed to deepen energy ties and pursue closer cooperation in areas like tourism and technology as the countries seek to strengthen relations at a time of turbulence for the global economy. 

An accord was reached to establish two oil refineries in India through a joint venture between the countries, India’s Ambassador to Saudi Arabia Suhel Ajaz Khan said in a briefing, without giving more details.  

The developments come after Saudi Crown Prince Mohammed bin Salman and Indian Prime Minister Narendra Modi met in Jeddah on Tuesday night. India’s leader departed shortly after, rather than staying in the kingdom until Wednesday, following one of the worst attacks on civilians in India’s northern Jammu and Kashmir region in years.

India and Saudi Arabia’s leaders met as both countries look to support their economies in the face of wide-ranging US tariff policies that threaten to stunt growth. India is already facing its slowest economic expansion in four years and Saudi Arabia is forecast to come under renewed pressure from subdued oil prices.

Deeper ties would stand to bolster stability and energy security for both and follow on years of flirtation between the G-20 nations on partnerships for everything from oil to agriculture and technology. 

Saudi Crown Prince MBS had in 2019 pledged $100 billion of investments in India, but only about $10 billion of that has materialised. State-owned oil behemoth Saudi Aramco has also long sought entry into India’s refining sector with little success.

A plan to jointly build a mega complex in western India, for example, hasn’t come to fruition due to challenges over land and a proposal for a stake in Reliance Industries Ltd.’s mega refinery in Gujarat failed to fructify on valuation issues.  

It’s unclear if Aramco will be involved in the refineries mentioned by India’s envoy to Saudi Arabia on Tuesday. 

Saudi Arabia, the de-facto leader of the OPEC+ producer group, was once India’s largest oil supplier but has seen its share of the market decline as imports from Russia and Iraq increase. 

Ahead of his visit, Modi had said the two sides are exploring joint projects in refineries and petrochemicals, according to comments he made to Arab News.

By Sudhi Ranjan Sen and Sherif Tarek, Business Standard / Apr 23 2025.

Five petroleum product pipelines were completed in the United States in 2024

In 2024, pipeline companies completed five pipeline projects to transport petroleum liquids in the United States, according to our recently updated Liquids Pipeline Projects Database.

The five projects consisted of three hydrocarbon gas liquid (HGL) pipelines and two petroleum product pipelines.

The completed projects are:

Texas Western Products system
Enterprise Products Partners’ Texas Western Products system is a conversion and reversal of a 60,000-barrel-per-day (b/d) pipeline that transports refined products (gasoline and diesel) from the Texas Gulf Coast to markets in the Mid-continent and Rocky Mountain regions. The system serves four key destinations: Gaines County, Texas; Jal, New Mexico; Albuquerque, New Mexico; and Grand County, Utah. It was completed in the fourth quarter of 2024.

Houston to El Paso refined petroleum products pipeline
ONEOK’s Houston to El Paso refined petroleum products pipeline system is a 30,000-b/d expansion along its existing route between Odessa and Crane, Texas. The new 30-mile, 16-inch pipeline increases the total capacity to approximately 100,000 b/d from Gulf Coast and Mid-Continent refineries to El Paso. It was completed in the first quarter of 2024.

Daytona NGL Pipeline
Targa Resource’s Daytona NGL Pipeline is a 400,000-b/d pipeline that transports Y-grade natural gas liquids (NGLs) from the Permian Basin to North Texas, where it connects with Targa’s Grand Prix NGL Pipeline. From there, NGLs move to Targa’s fractionation and storage complex in Mont Belvieu, Texas. The pipeline is approximately 400 miles in length with a 30-inch diameter and was completed in the fourth quarter of 2024.

Seminole Red Pipeline
Enterprise Products Partners’ Seminole Red Pipeline is a conversion of a 280,000-b/d crude oil pipeline back to an HGL pipeline while the company builds the Bahia Pipeline, another HGL pipeline project that will also service the Permian Basin. The pipeline transports Y-grade NGLs approximately 440 miles from the Permian Basin in West Texas to Enterprise’s fractionation and storage facilities in Mont Belvieu, Texas. The Seminole Red Pipeline was originally an HGL pipeline before it was converted to a crude oil pipeline in 2019. The conversion back to HGL service was completed in the first quarter of 2024.West Texas NGL Loop

The West Texas NGL Loop developed by ONEOK is a 40,000-b/d expansion that increased the total pipeline capacity to 515,000 b/d. The looping expansion involved installing additional pipeline segments in parallel to the existing line, which extends along the West Texas NGL Pipeline route from the Permian Basin to multiple fractionation and storage facilities in Mont Belvieu, Texas. The company completed the project in the fourth quarter of 2024 and plans to add pump stations by mid-2025 to further expand capacity to 740,000 b/d.

Our Liquids Pipeline Projects Database contains information about projects at various stages of construction. In addition to these completed projects, we estimate there are nine announced pipeline projects and eight projects under construction in the United States. We estimate 17 projects have been permanently canceled since 2020.

Our Liquids Pipeline Projects Database compiles information on more than 270 future, ongoing, and past liquids pipeline projects in the United States. These pipelines carry crude oil, HGLs, and petroleum products—which include gasoline, diesel, jet fuel, and other refinery products. This database includes projects that date back to 2010. Our database contains project types, start dates, capacity, mileage, geographic information, and project status. We track expanded, reversed, converted, and new pipeline projects.

Some projects are connected to each other, with some pipelines doubling as segments of other longer lines that may carry the same fuels to their final destination. As a result, adding together the capacity of all projects would result in overestimating or double counting some pipeline capacity.

The Liquids Pipeline Projects Database complements our Natural Gas Pipeline Projects tracker. We update our Liquids Pipeline Projects Database based on the best available information from pipeline company websites, trade press reports, and government documents, such as U.S. Department of State permits for border crossings. We update the database twice each year. The data reflect reported plans and do not reflect our assumptions on the likelihood or timing of project completion.

By: Merek Roman, Jim O’Sullivan, EIA / April 21, 2025.

How chemical manufacturers can train AI models

Companies can use AI to summarize lengthy regulations, such as TSCA, but need to continually verify data accuracy, panelists said at last week’s GlobalChem conference.

Chemical manufacturers are increasingly turning to artificial intelligence to enhance operations.  

AI usage in the chemical industry has particularly increased over the last five years, Seneca Fitch, director of the health sciences practice at scientific consulting firm ToxStrategies, said at a GlobalChem conference panel in Washington, D.C. last week.

Fitch was joined by Rebecca Morones, a senior product steward at BASF, and Sean Watford, an environmental systems and information scientist at the U.S. Environmental Protection Agency, to discuss how they use AI and how to train the technology to give the answers needed.

AI can be used to perform risk assessments, as well as simplify and summarize laws with hundreds of pages, such as the Toxic Substances Control Act, to help companies stay compliant.

Data management, Fitch added, is an important use of the technology, but only if manufacturers start with quality data. 

“Garbage in equals garbage out. We’ve heard that saying a lot, and so it’s very important that we are using optimal data when we are training models, so that we are making sure to get the most valid and reliable results,” Fitch said.

AI hallucinations can skew results

Morones said she uses Microsoft Copilot to summarize information, such as EPA risk evaluations. She noted, however, that while the platform provides highlighted outlined points, it does not perform an in-depth analysis of information, Morones said.

“You still have to read the documents,” Morones said. “But I feel like there’s also 200 pages it’s sifting through, which does at least help get you to kind of where you’re looking for and give you a great oversight.”

However, AI can pull incorrect data, also known as hallucinations, Morones added. Her colleagues have asked AI for the density of a safety data sheet or what a TSCA fee is, and the platform found an incorrect answer.

“So if your businesses are using this, and I do caution that, just make sure that they are aware of these hallucinations,” Morones said. “And anytime it comes to regulatory aspects, you should probably have them come to the regulatory experts. Don’t rely on what they’re seeing or what they’re doing.”

At other times, the technology may pull up references that appear legitimate but actually do not exist, Fitch said, adding that any information generated by an AI model should be independently verified by staff to ensure its validity. 

“With that lesson, it’s really important that not only are we reviewing the things that are coming out of any AI model, but also that we’re verifying them,” Fitch said. “Because something could certainly sound logical, it could certainly look real, and yet it’s not. It’s false information and that hallucination, that’s not rare.”

Leveraging prompt engineering

To obtain the necessary answers to queries, manufacturers will need to use prompt engineering to train the technology.

“I think that the most practical advice is that it is a computer and it uses logic,” Fitch said.

Morones described prompt engineering as instructing a computer to perform a simple task, such as how to make a peanut butter and jelly sandwich. “It’s not going to understand, ‘Grab two slices of bread,’” Morones said. “You have to be very specific for what you’re doing.” 

One strategy the EPA uses to reduce hallucinations through prompt engineering is to ask the model the same question multiple times, to ensure consistency in answers, Watson said. “If the question or the task might be repeated over and over again, you want to ensure that you’re getting similar performance for each iteration of the task,” Watson said. 

If companies are interested in exploring AI for regulatory purposes or efficiency, Morones said qualified employees should be involved in its development.

“You’re the one that understands better than AI is going to understand,” Morones said. “You know what you’re looking at, what you need to find.”

 By: Sara Samora, Manufacturingdive / April 21, 2025.

Petroleum supply hit as refineries face crisis

The sub-optimal capacity utilisation of oil refineries has started affecting the supply of critical petroleum products, including jet fuel, at important installations.

Sources at the Oil and Gas Regulatory Authority (Ogra) told Dawn that an important defence organisation had asked the regulator to ensure that its regulated entities, particularly local refineries, honour their commitments to supply JP-8 fuel.

The sources said that none of the six oil refineries had provided their committed quantities to defence organisations in the first nine months (July-March) of the current fiscal year.

Based on the complaint, the government and Ogra have now pushed all refineries to ensure their committed supplies.

However, the refineries have responded that Ogra’s lenient view towards importing finished petroleum products like petrol and diesel by a couple of selected oil marketing companies was taking a toll on their capacity utilisation, and they were pushed to close their refining units.

Data showed that Rawalpindi-based Attock Refinery Limited (ARL) had supplied about 85pc of its committed quantities of JP-8 to defence organisations in the nine months under review. This was followed by 70pc of committed quantities by Parco and 52pc by Pakistan Refinery Limited.

The remaining three refineries — National Refinery, Byco and Enar — have supplied 25.5pc, 25pc and 44pc of their contracted supplies, respectively. All put together, the combined supplies by six refineries reached just 58pc against their contracted quantities for July-March.

Sources said the ARL had reported that it was the only refinery that supplied about 85pc of its contracted volumes during the current financial year and had promised to do more on a “best-effort basis”, given technical reasons.

The refinery, which relies entirely on indigenous crude, highlighted that depletion of reserves in northern oilfields had hampered output. It has requested the government to reallocate 5,000 barrels per day of crude oil from southern oilfields, which are currently being exported — a request ARL says it has pursued since 2022 but in vain.

Moreover, the refinery was also facing serious challenges in abrupt and frequent curtailment in local crude production due to forced gas curtailment by the SNGPL to accommodate imported LNG. Furthermore, condensate supplies from certain Khyber Pakhtunkhwa fields were often disrupted due to frequent strikes and the law and order situation.

As if that was not enough, the free influx of smuggled petroleum products in the country also posed a serious existential threat to the oil refining industry. “The local refineries, including the ARL, have been constantly complaining about falling capacity utilisation and sales, due to the unabated influx of smuggled petroleum products in the country,” it said.

The sources said that Parco had also complained to the government that its diesel stocks were touching historic levels and its storage facilities were full due to lower purchases by oil marketing companies, which had been freely allowed by the regulator to import refined products. As a result, the production of jet fuels was adversely affected.

By: Khaleeq Kiani , Dawn / April 18th, 2025

Could Shell or Chevron Make a Move on BP?

For years, BP has been tipped as a potential target of the next mega-merger deal in the oil industry.

Speculation about a blockbuster acquisition involving BP resurfaced again this year after activist hedge fund Elliott bought nearly 5% in the UK-based supermajor and demanded changes, big and fast.

BP’s shares have underperformed the stocks of the other four of the Big Oil group – Shell, TotalEnergies, ExxonMobil, and Chevron – ever since 2020.

Neither former BP CEO Bernard Looney, with the push toward renewables, nor his successor Murray Auchincloss, with the strategy reset to return on the path of oil and gas, have managed to erase the company’s underperformance in the past five years.

Speculation about another oil giant taking over BP is not new—such rumors have been swirling for over a decade, particularly ones suggesting that Shell could be the bidder for a merger with BP.

But this year, Elliott’s aggressive approach to the companies in which it buys significant stakes has rekindled speculation about BP becoming a target of the next mega-merger deal in the global oil industry.

Analysts aren’t ruling out anything, not even one of the U.S. supermajors – Exxon or Chevron – approaching BP for a potential deal.

At the start of this year, 6 out of 50 M&A experts surveyed by Bloomberg mentioned BP as one of Europe’s top mergers and acquisitions targets for 2025. BP collected the fourth-highest number of votes from these experts, after mining giant Anglo American, French video-game company Ubisoft Entertainment, and UK broadcaster ITV.

Elliott’s demands for changes in strategy, board reshuffles, and a swift turnaround of the stock performance have prompted analysts this year to speculate about which potential suitor could be best positioned to take over BP.

A year ago, reports emerged that Abu Dhabi National Oil Company (ADNOC) had weighed buying BP, but talks didn’t go far, and ultimately, the state firm of the United Arab Emirates decided not to pursue a takeover of the UK supermajor.

A national oil company in the Middle East could be one possible BP suitor, considering BP’s presence in the region, especially in Iraq, where BP has just been given the go-ahead to a $25-billion contract to develop Kirkuk oil fields.

Yet, analysts tend to speculate more about a Shell-BP merger of equals or a potential Chevron approach for BP if the U.S. supermajor fails to complete the deal to buy U.S. Hess Corp.

BP also has a huge presence in the U.S. oil industry.

In the U.S. Gulf of Mexico, BP looks to boost its production capacity to more than 400,000 barrels of oil equivalent per day by the end of the decade, the company said this week as it announced an oil discovery in the deepwater U.S. Gulf of Mexico 120 miles off the coast of Louisiana.

The discovery at the Far South prospect comes as BP announced a few weeks back a strategy reset to shift focus back to growing oil and gas production and investments after a few years of trying to be an integrated energy company with a major presence in renewables.

In a very unfortunate development for BP, any positive share performance from the strategy reset was obliterated within a month by the tariff and trade wars, which crashed the price of Brent Crude oil to the low $60s per barrel.

Lower oil prices could test BP’s ability to sustain its returns to shareholders, including dividends, especially as the supermajor flagged an increase in its net debt in the first quarter of 2025.

The pressure from Elliott on BP to boost returns and stock performance is likely to continue, as well as speculation over whether or not a split or acquisition of BP would give investors more bang for their buck.

As for who the potential buyer could be, Allen Good, director of equity research at Morningstar, told CNBC, “I wouldn’t take anything off on the table.”

By Tsvetana Paraskova,  Oilprice.com / Apr 17, 2025