A storm in the Black Sea shows how Russian oil can raise prices

Yesterday the fear of how the international market would react to the absence of Russian oil in the general supply returned. While Brent moved between US$114 and US$116 on Tuesday, yesterday it did so in a range of US$120 to US$122, and WTI in line with US$114.

Financial analyst Gregorio Gandini explained that the rise on Wednesday was the result of “a storm that affected the supply of crude oil coming from Kazakhstan and Russia through the Caspian Pipeline Consortium, on the Black Sea coast.

“That of course fuels the market’s nervousness that the supply of crude oil continues to be reduced,” added Gandini, and precisely the rise in oil is a first call for how prices can continue to rise once there is less Russian pumping.

This is an important area. Russia said oil exports through the pipeline from Kazakhstan to the Black Sea may temporarily drop by around 1 million barrels per day., which represents at least 1% of world oil demand; Report given for storm damage.

The fear of how the market would move stems from the report by the US Energy Information Administration, in which, according to them, Russia is listed as the third largest oil producer in the world, responsible for more than 10% of the supply world.

But we must remember another analysis of the sector that indicates that in 2021 the average for the year closed with 9.7 million barrels per day, and even peaks of 11 million by the Russians. With these figures, it is the second producer globally, after the 10.2 million of the American Union.

Similarly, if you look at their proven reserves, the International Energy Agency in 2020 estimated that Russia was the sixth on the list with 107,000 million barrels in terms of its potential. In addition to moving oil, Russia, which moves almost 40% of Europe’s gas, will take a further hit from the EU, with the bloc planning to cut its imports of Russian natural gas by two-thirds by the end of this year.

So far, following advances in sanctions on Moscow by leading Western governments, the United States and Canada have been among the first to ban what little Russian oil they import, while the European Union is considering a larger veto. Western restrictive measures have so far avoided directly capping most of Russia’s energy exports. However, US and EU decisions have already cut off Russia’s access to finance and advanced technology to develop and maintain its aging fields.

Another report from the energy sector shows how a good number of companies in the industry, but Western, are interrupting important projects from the Arctic to the Pacific Ocean. In the meantime, traders and banks have been avoiding shipments of Russian oil in recent weeks. All of this threatens Russian oil production, which accounts for one in 10 barrels pumped globally.

Other territories with strong oil reserves, but also sanctioned, such as Iran and Venezuela, have had trouble recovering from the big hit to production that those restrictions have caused. Analysts warn that Russia could too.

Bloomberg recalled the position of Mikhail Krutikhin, a partner at the independent consulting firm RusEnergy that advises oil companies in that country, who warns that “this will set the industry back many years. It means loss of competitiveness.”

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About Alex Marcell

He likes dogs, pizza and popcorn. Already a fanboy of Nintendo and Sony, but today throws anything. He has collaborated on sites and magazines such as GameBlast, Nintendo World, Hero and Portal Pop, but today is dedicated exclusively to Spark Chronicles.

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