"Explosion" in the oil market: prices are approaching the 2022 record
Prices in the global oil market continue to rise rapidly. During the trading session on October 23, the price of the benchmark North Sea oil Brent reached $113.7 per barrel, and during daily trading even exceeded $114.
Although this figure is slightly lower than the short-term peak of $118 in the spring, due to the escalating geopolitical situation in the market, prices are moving boldly towards updating the historical record of $122 set in 2022.
Why are prices rising sharply? Main factors
International experts explain the rise in oil prices by serious supply disruptions and risks:
Saudi Aramco headquarters evacuation: Following the escalation of clashes between Saudi Arabia and Yemen's Houthis, Saudi Aramco, the world's largest oil exporter, urgently evacuated its employees from its headquarters located in the Persian Gulf city of Dhahran;
Closure of pipelines in Libya: The National Oil Corporation of Libya announced the closure of the oil pipeline valve connecting the Hamada and Tahara fields to the port of Zawiya. This led to a significant reduction in production volumes at both fields;
Tanker and shipping crisis: UBS analyst Giovanni Staunovo noted that logistics risks and the excessive rise in tanker charter rates have caused a real supply deficit in the market;
The Iran factor and geopolitical environment: The comprehensive escalation in the Middle East poses a direct threat to oil infrastructure, forcing investors to add a large risk premium to prices.
Urals price exceeds $100: 60% higher than expectations
The rise in prices on the global market has also directly affected the price of Russian oil:
Crossing the $100 threshold: Russia's Urals grade oil is trading on markets at prices above $100 per barrel;
Reuters estimate: According to the agency's analysis, the average price for Urals in October is expected to be 60 percent higher than the Russian government's initial plans and expectations.
As noted by XS.com analyst Lin Tran, market participants are currently focusing on how long the existing disruptions will last — if infrastructure restoration drags on, oil prices could rise even higher than the $122 mark.
Comments 0
…