The Russian-Ukrainian war sets the course for oil prices. The market is overwhelmed by an avalanche of information. Sometimes it propels them to new heights, as was the case last Monday. They came close to 140 dollars, a level close to the absolute record of 147.50 dollars reached in July 2008. Sometimes they suffer a decline like that of Thursday which caused a notorious drop in the barrel of Brent from the North, benchmark for black gold in Europe, for delivery in May which closed that day at 109.33 dollars.
What happened to make the barrel change its mood? The explanation would be found in the statements of Russian President Vladimir Putin who assured that Russia was maintaining all its hydrocarbon deliveries, despite Western sanctions. “All volumes” were delivered to Europe as elsewhere, assured the master of the Kremlin, specifying that even “the gas transport system of Ukraine is 100% full”. It should be remembered that the Ukrainian gas pipeline network is one of the essential routes for supplying the European continent, of which 45% of gas imports come from Russia. This has not evacuated the tension on the offer.
Will OPEC be solicited? The United Arab Emirates, a member of the Organization of the Petroleum Exporting Countries, said on Wednesday it would work with partners to increase production following prices hit historic highs. “We are in favor of an increase in production and we will encourage OPEC to consider increasing production levels,” said the ambassador of the Emirates in Washington, Youssef Al Otaïba. “The Emirates have been a serious and responsible supplier of energy to markets for more than 50 years, and they believe that the stability of energy markets is essential for the global economy,” he added. American media have even mentioned the possibility of a visit by American officials to Saudi Arabia, leader of OPEC, a country close to Western countries but also to Moscow, to convince Riyadh to put more barrels on the market.
An approach that is far from being won in advance. It should be emphasized that the Organization of Petroleum Exporting Countries and its 10 allies, led by Russia, which together produce more than 40% of the crude oil consumed in the world, are sticking to an increase in their pumping of 400,000 barrels per day (bpd) every month. “No matter what challenges we may face, the OPEC-non-OPEC Declaration of Cooperation will continue to be the modus operandi of our common success and will help us move closer, step by step and day by day, to achieving our goal. our common objectives,” OPEC SG Mohammad Sanusi Barkindo said on the eve of the OPEC+ summit held on March 2 by videoconference. A barely veiled call to stay the course. Experts do not believe in a solo UAE. “The United Arab Emirates will not act on its own to increase oil production,” said Carsten Fritsch, analyst for Commerzbank, Germany’s second largest banking group. It should also be noted that the assurances given by President Putin concerning Russian oil supplies have not led Western countries to stop the series of sanctions affecting his country, while the Russian offensive in Ukraine intensifies and does not seem ready to find a way out. Which led to a further rebound in prices. A barrel of Brent from the North Sea, the benchmark for black gold in Europe, for delivery in May, traded yesterday at 8:45 a.m. at 111.86 dollars, up 2.31%.
As for the barrel of American West Texas Intermediate for delivery in April, it was at 108.08 dollars, posting an increase of 1.94%, following having fallen the previous session to 106.02 dollars. “The risk of further disruption remains high, especially with further sanctions coming that will make life more difficult for Russia and companies less willing to do business with it,” warned Craig Erlam, analyst for Oanda. The barrel has probably not finished its jolts…
