Oil prices rose for the fourth day in a row, with fears of supply disruptions from Russia exceeding expectations of reduced demand in China.
Crude Brent rose 1.7% to $ 109.40 a barrel, while WTI crude rose 1.03% to $ 106.50 a barrel.
Both contracts are due to end during the week and mark their fifth consecutive monthly profit, backed by reports that the European Union (EU) will phase out Russian oil imports by the end of the year.
Germany – the bloc’s largest economy – has given up resistance to the measure, which is being considered for inclusion in a possible sixth EU sanctions package against Russia since its invasion of Ukraine in February.
Over the next two months, prices were volatile, peaking at a 14-year high of $ 139 a barrel in early March before falling below $ 100 later that month as developed economies struggled with the prospect of shortage of supplies.
The choice of the United States and the United Kingdom to impose sanctions on Russia’s energy supplies has led to a spiraling price spike, exacerbated by tight markets amid OPEC + ‘s continued failure to boost production in line with modest promised increases of 400,000 extra barrels a day.
With requests from the West to increase supplies unheard of, the United States and members of the International Energy Agency (IEA) have chosen to flood the market with 240 million barrels, leading to falling prices as President Joe Biden desperately seeks to curb the cost of a living crisis before key by-elections this year.
The latest resumption of the two main benchmarks was weighed down by the ongoing blockades of Covid-19 in China, the world’s largest importer of crude oil.
The country shows no signs of easing blockades in Shanghai, despite the impact on its economy and global supply chains.
However, prices are likely to remain high nonetheless, with fears of supply shortages continuing to escalate.
Oil production in Russia could fall by as much as 17 percent this year, according to documents reviewed by Reuters, as Western sanctions hurt investment and exports.
Related: The German energy giant will pay for Russian gas in rubles
Reflecting on this reality, Exxon Mobil revealed earlier this week that Russia’s Exxon Neftegas division had announced force majeure about Sakhalin-1’s operations.
The Sakhalin-1 project produces Sokol crude oil off the coast of Sakhalin Island in Russia’s Far East, exporting about 273,000 barrels a day, mainly to South Korea, along with Japan, Australia, Thailand and the United States.
The energy giant revealed last month that it would abandon about $ 4 billion in assets and suspend all its operations in Russia, including Sakhalin.
Meanwhile, OPEC + is likely to stick to its existing deal and agree on another small increase in production for June, when it takes place on May 5th.
From CityAM
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