Crude Quarterly Q2'25: In the absence of war, the oil market is well s...

Energy Morning - 17 June 2025

Energy Morning - 6 June 2025

Better across the board

Q1 slightly better than expected

Wallenius Wilhelmsen ASA (Buy, TP: NOK87.00) - Still-attractive value

We have cut our near-term forecast to reflect heightened uncertainty and more cautious full-year guidance, but remain confident that the majority (79%) of the current market cap should be derisked by end-2027e, leaving an attractive stub value for the long-term business potential in the world-leading car carrier. We reiterate our BUY, but have cut our target price to NOK87 (91).

Needs to lock in 2026

Offshore Drilling (DNB Markets) (, ) - (39 pages)

Sticking to the lower end of '25 guidance

2025 guidance down, but Q2 better than Q1

Another round of Aramco suspensions expected

Market sources suggest Saudi Aramco will further reduce its rig count in the coming months through early contract terminations and potentially more suspensions, which would mark the ‘fourth round’ of rig reductions. This follows last month’s request for dayrate discussions (historically, such requests have preceded it suspending rigs). We believe this round could be extensive, affecting c10 jackups out of its current rig count of c57 rigs. At the peak, Aramco had 92 jackups (22% of global demand...

Muted 2025 growth expectations

Following Q1 earnings calls by some of the oil service companies, 2025 outlooks appear more challenging than previously. Baker Hughes expects international upstream spending to decline by mid- to high-single digits, while Halliburton sees its international revenues flat to slightly down. Furthermore, Weatherford expects 2025 international revenue to decline by low double- to mid-double digits. Precision Drilling flagged additional rig suspensions by Saudi Aramco, and SLB highlighted a slow start...

Demand recovery continues to be delayed

Should continue to be the relative winner

ENI capex cut but maintains shareholder returns

Driven by macro headwinds and uncertainty around trade tariffs, ENI was the first large oil company to introduce capex cuts for 2025, contributing to a more challenging business environment for oil services. Over the past five years, we estimate ENI to have been the oil major with strongest offshore spending growth, and it has been considered active and opportunistic while others have been more conservative. Hence, we see its reduction as a soft datapoint for oil services. ENI has optimised its ...

Wallenius Wilhelmsen ASA (Buy, TP: NOK91.00) - Solid value in troublin...

Challenging times for the car carriers is reflected in depressed equity valuations. We believe a considerable backlog to derisk the investment over time, and potential upside on any respite in peaking trade tensions, make for an attractive investment case. We reiterate our BUY, but have cut our target price to NOK91 (115).

US tariffs pressure trade and rates

USTR port fees watered down; positive for shipping overall, except car...

Another abrupt change

The US Trade Representative on 17 April published revised US port fees with significant changes to the initial proposal based on industry feedback. In its current form, the fees will primarily discourage use of Chinese-controlled maritime trade services to the US, and directly affect the use of Chinese-built vessels in US ports (with several considerable exemptions to avoid harm to US trade). The previous broader fees based on fleet composition and share of Chinese-built vessels has been scrappe...

Welcomed tender from Petrobras

Updates suggest Petrobras yesterday launched a new tender for “one or more” deepwater rigs for the Buzios field starting late-2026/early-2027. As it has been a while since the last Petrobras tender, and there has been uncertainty related to the timing of upcoming tenders, we believe a new Petrobras tender would offer relief for investors. As we count nine rigs already contracted with Petrobras to match the start-up window, we expect the requirement would be filled by rigs already in the country,...

Looking at required day-rates

Although there are several ongoing deepwater tenders, the lack of recent deepwater fixtures has created uncertainty among investors related to day-rates. Consequently, we have analysed the required day-rates to support current share prices and valuations. Given the high operating leverage and multiple variables involved (utilisation, lifetime and cost of capital), we estimate the sector requires 7G drillship day-rates from the mid-USD300k and above to support the current share prices.