Oil prices soar above $ 110 a barrel – Russia’s 3 million barrels deficit and Saudi Aramco plant bombed – Gas price hits 3-week low
For the third day in a row, the price of oil strengthened, which again climbed to the level of $ 110 per barrel, intensifying the energy crisis and maintaining the inflationary spiral.
According to analysts, there are two main factors that push “black gold” back to such high levels.
On the one hand, the completion of almost a month since the Russo-Ukrainian war
On the other hand, the new “hit” of the Houthi rebels in the energy facilities of Saudi Arabia.
US crude rose 4% to $ 108.98 a barrel today, while Brent rose 3.7% to 111.86. It is recalled that last week, prices had fallen below $ 100. But this de-escalation has finally proved to be temporary, recording a rally of almost 14% since last Wednesday.
The Russian invasion of Ukraine is in full swing, with the front of the conflict focusing on the besieged Mariupol, a key port on the Black Sea. At the same time, at the diplomatic level, although there is progress, the negotiations may take longer than originally expected.
In this context, several traders have launched an informal embargo on Russian oil, although officially only the US, Canada and – in part – the United Kingdom have imposed sanctions and restrictive measures on Moscow’s energy sector.
Last week, the International Energy Agency (IEA) warned that Russian production would fall by 3 million barrels a day in April. This, reasonably, creates a gap in the market, which must be filled immediately in order to avoid a new rally. Hence the “decalogue” of the IEA with instructions to the global community on how to reduce consumption by 2.7 million barrels per day over a four-month period.
It is recalled that during March, the price of oil had reached up to $ 130 per barrel, the highest level since 2008.
Meanwhile, Iranian-backed Houthi rebels in Yemen, who are fighting Saudi Arabia, hit six Saudi Aramco facilities over the weekend, adversely affecting the Arab country’s output.
And all this, as mentioned above, while OPEC is looking for ways to fill the gap in Russian production, with the burden falling on the shoulders of Saudi Arabia and the United Arab Emirates, two of the key “players” of the oil market, who are called increase exports and production so that the market does not collapse.
“The Houthi attack, the warnings about structural shortages in production and a possible EU embargo. “They have given a new impetus to Russian oil prices,” said Jeffrey Halley, an OANDA analyst who spoke to CNBC.
“Even if the war ends tomorrow, the world will have to deal with the energy deficit,” he said, adding that oil prices would not fall immediately to pre-war levels.