Compared to last week, an increase in prices was observed in the global oil market this week. Oil exchanges, taking into account the tense situation in the Middle East, started operations with a 2 percent price increase. The United States' accumulation of weapons and ammunition at its military bases in Gulf countries and the redirection of its aircraft carriers towards the Gulf caused the price of “Brent” crude oil to increase by 12 cents, and the price of WTI crude oil by 14 cents.
Modern.az reports that Toni Sycamore, an analyst at the British investment company “G Group Holdings”, stated that the market is still operating under the influence of geopolitical tension. In his opinion, the price increase is not related to the balance of supply and demand, but to potential problems in oil transportation.
US President Donald Trump's statements against Iran and the response from Iran's military structures are escalating tensions. Some traders are buying oil and storing it in terminals to sell after a price increase. However, since the terminals of oil-producing countries are full, oil cannot be stored for a long time, which prevents a sharp increase in prices despite geopolitical tensions.
Yesterday, the Kazakh government restored the electricity supply to the “Tengiz” and “Korolev” fields, and the transportation of extracted oil via the Caspian Pipeline Consortium was also restored. The halt in oil exports to the global market through this pipeline last week also affected the price increase. While the increase was 2 percent at the beginning of the week, it rose to 2.7 percent by the end. Oil transportation routes to the global market are at risk. The war between Russia and Ukraine endangers terminals and ports on the Black Sea coast, while tensions between the US and Iran threaten the entire Gulf.
Another reason for the price increase is the extremely cold weather in the US. Analysts at “J.P. Morgan” stated that operations in Oklahoma and Texas states, as well as in fields in the Bakken region, were temporarily suspended due to weather conditions, which hindered the production of 250 thousand barrels of oil.
Currently, Russian oil is sold at the lowest price in the global market. The price of “Urals” crude oil is 35 dollars, the reason for which is related to geopolitical processes. As a result of sanctions by the European Union and the US, demand for Russian oil has decreased, leading to a drop in its price. The most expensive oil is Azerbaijan's “Azeri Light” crude oil, with its price around 68 dollars per barrel.
According to the report by the International Energy Agency, today the global oil market has a demand for 70 thousand barrels of oil. Geopolitical reasons prevent a price decrease. However, this year non-OPEC countries will increase production, thereby also increasing supply in the market. (Source: Azertac)
