The rise in oil prices since April is raising inflationary pressures. Oil prices are expected to continue to rise for the time being as China is lifting city lockdowns and the European Union (EU) has decided to stop importing most of Russian crude.
According to CNBC on the 1st, the price of West Texas Intermediate (WTI) for July on the New York Mercantile Exchange stood at $115.02 per barrel as of 12:42 am (local time) on the same day.
It rose 0.3% from the closing price of the previous day ($114.67). Compared with the price of oil ($76.08) at the beginning of the year (January 3), it rose by 51.2%. August Brent crude ended at $122.84 a barrel on the ICE Futures Exchange in London on the 31st of last month. After regarding three months since March 8, it once more entered the $120 range.
Oil prices rose from both the supply and demand side. First of all, there is a growing possibility that oil demand will increase in China, where economic activity has contracted due to the COVID-19 outbreak. The Chinese government has decided to lift the lockdown in Shanghai from the 1st.
On the supply side, the EU’s embargo on Russian crude oil on the 30th of last month boosted oil prices. The EU has decided to immediately suspend imports of Russian crude oil by sea. The EU accounts for 67% of the total crude oil imports from Russia. Including imports from oil pipelines, which account for the rest, it has decided to reduce 90% by the end of the year.
The Organization of Petroleum Exporting Countries (OPEC) has responded to disruptions in the supply of Russian oil. According to the Wall Street Journal on the 31st, OPEC is considering excluding Russian oil from the oil production agreement. If Russia is excluded from the oil production agreement, other OPEC members such as the United Arab Emirates (UAE) and Saudi Arabia might increase oil production.
On the 2nd, 13 OPEC member countries and 10 non-member oil-producing countries, including Russia, will participate in the ‘OPEC Plus’ meeting to discuss plans to increase production.
Reporter Lee Joo-hyun
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