On Wednesday night, the US Department of the Treasury's Office of Foreign Assets Control hit Russia's two largest oil exporters, Rosneft PJSC and Lukoil PJSC, with sanctions. The move raises the stakes for buyers of their barrels, principally refiners in China, India and Turkey.
Rosneft PJSC and Lukoil PJSC, together with Surgutneftegas PJSC and Gazprom Neft PJSC, which were blacklisted in January, accounted for almost 70% of Russia's crude exports — around 3.1 million barrels a day — in the first half of the year.
If just half the Russian barrels covered by sanctions are curtailed, that could push the global oil market next year from a surplus of 700,000 barrels a day into a deficit, according to Bloomberg calculations using forecasts from the Organization of the Petroleum Exporting Countries.
That's far from a sure thing. The International Energy Agency has pegged the global supply surplus next year at a whopping 4.7 million barrels a day. That would be enough to cover any loss from Russia, potentially making this the ideal time to hit Moscow's crude exports without sending prices soaring.
But if OPEC's forecast is closer to reality, there could be some upward pressure on prices. With no spare production capacity elsewhere, other members of the group, namely Saudi Arabia, could come under pressure from Trump to pump more.
For the kingdom's de-facto leader, Crown Prince Mohammed bin Salman, having to choose between Trump and Putin would be an uncomfortable situation.
Ties between the Moscow and Riyadh are getting ever tighter — national airline Saudia recently inaugurated its first direct flights between Riyadh and Moscow — so MBS wouldn't jump at the chance to steal Russia's customers.
Then again, when the Crown Prince visits the White House next month, the urge to please Trump could be equally powerful.
Bloomberg News
No comments:
Post a Comment