Weather Catastrophe & Immediate Impact:
Historic monsoon rains have wreaked havoc on India’s energy logistics, leading to widespread disruption. In several regions, critical infrastructure has been compromised, with 38 major oil depots in Gujarat reported to be underwater. This natural disaster has forced a sharp decline in diesel demand, reducing it to levels last seen during the 2020 lockdown, and has led to LNG supplies being rerouted to support emergency power generation.

Global Ripple Effects:

• Price Adjustments:In response to the sudden supply challenges, Middle Eastern exporters are offering an 8% discount on spot prices.
• Refinery Margins:Refining margins in Singapore have collapsed, with figures dropping to just $3.80 per barrel.
• Risk Premiums:The ongoing crisis has also resulted in a surge in climate risk premiums within global energy futures, reflecting heightened uncertainty and investor caution.