Global Energy Shift: BP Pivots Back to Oil, India Plans Fuel Levy, US Stocks Tighten

BP's corporate strategy has shifted "markedly" from its 2020 clean-energy ambitions back toward oil, gas, and shareholder returns, according to a report from OilPrice.com. CEO Meg O'Neill is seeking buyers for the company's North Sea business and its Archaea Energy biogas unit as part of a sweeping portfolio overhaul. The report states O'Neill told UK Prime Minister Andy Burnham that the country gets 75% of its energy from fossil fuels and argued the "first barrel of oil" should come from the domestic North Sea.

This strategic pivot comes as O'Neill conceded BP's recent performance has not met shareholder expectations. The move away from assets like Archaea, bought for $4 billion in 2022, signals a renewed focus on core hydrocarbon returns, a sentiment closely watched by global operators including those in the Bakken.

In Asia, India is considering a new funding mechanism for a massive $42-billion strategic fuel reserve program, OilPrice.com reported. The proposal includes levies on liquefied petroleum gas (LPG) and natural gas consumption to raise about $1.5 billion annually. The decade-long plan aims to create emergency stockpiles for LNG and LPG alongside crude oil, targeting reserves to cover roughly two months of crude and LNG demand.

If approved, the levies would increase household gas bills by about 2%. India currently has no dedicated strategic reserves for LNG or LPG, with existing emergency fuel reserves covering less than 10 days of demand. This push for energy security underscores sustained long-term demand for hydrocarbons in key growth markets, supporting global oil prices that underpin Bakken economics.

In the United States, oil product inventories continued to fall last week despite a build in crude stocks, according to EIA data cited by OilPrice.com. Commercial crude inventories rose by 2.5 million barrels for the week ending July 31, bringing stockpiles to 407 million barrels, which are 6% below the five-year average.

However, gasoline inventories fell by 1.6 million barrels, and middle distillate inventories decreased by 3.5 million barrels. Distillate stocks are now 12% below the five-year average. Total products supplied, a proxy for demand, averaged 20.4 million barrels per day over the last four weeks, down 0.9% year-over-year. Distillate demand averaged 3.6 million barrels per day, up 1.8% year-over-year.

On Wednesday morning, Brent futures were trading at $79.62 per barrel, up $0.26 on the day, while WTI was at $75.35, down $0.42. Both benchmarks are down roughly $9-$10 per barrel from the same time last week. The tightening refined product inventories, particularly for distillates, point to steady downstream demand even as crude prices face volatility.