Without sanctions on Russian oil, the price could fall to $ 65 a barrel. In the meantime, consumers pay …
According to Simon Watkins , an analyst at Oilprice, the failure of the oil sanctions against Russia would drive the price of oil back to $ 65 a barrel, possibly taking a bigger blow to Moscow than the sanctions themselves . Without considering the positive effects on inflation and on the pockets of EU citizens. But it seems that the direction is completely the opposite.
According to the analyst, a key factor in the current high price of crude oil is market concern about the possible ban on exports of Russian oil to the European Union (EU). Before the invasion of Ukraine, Europe imported about 2.7 million barrels per day (bpd) of crude oil from Russia and another 1.5 million bpd of petroleum products, mainly diesel. This fear of sanctions has been largely exaggerated. Removing this particular fear factor in the price of oil will allow it to return later this year to the level it was before the Russia-Ukraine "war premium" began to be priced in September 2021, which is around US $ 65. per barrel (bp) of Brent.
We recall that Hungary and Slovakia continue to say that they will not vote in favor of a ban on Russian oil. According to data from the International Energy Agency (IEA), Hungary imported 70,000 barrels a day, or 58 percent, of its total oil imports in 2021 from Russia, while the figure for Slovakia was even more. high, at 105,000 barrels a day, equal to 96 percent of all its oil imports last year. Other European countries that depend on the southern Druzhba pipeline are the Czech Republic (68,000 barrels a day, or 50 percent or its oil imports in 2021 were from Russia) and Bulgaria (which is almost completely dependent on the giant's gas supplies. state-owned oil company Gapzrom, and its only refinery is owned by the Russian state-owned oil giant, Lukoil, which supplies more than 60% of its total fuel needs). This makes serious application of oil sanctions by the EU very unlikely, which, in the end, would have to include so many exemptions that the measure would appear to be a form of Gruyere!
At this point it would be much more serious to abandon the measure and not to ban oil, as long as possible, allowing the abundance of production to bring down the price and therefore damaging Russia with cheaper prices, perhaps reopening to Iran and encouraging Venezuelan and Libyan productions. But the demagogy is very strong in the Commission, more so than logic and economics.
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Article Without sanctions on Russian oil the price could fall to 65 dollars a barrel. In the meantime, consumers pay… it comes from ScenariEconomici.it .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/senza-sanzioni-sul-petrolio-russo-il-prezzo-potrebbe-cadere-a-65-dollari-al-barile-nel-frattempo-pagano-i-consumatori/ on Tue, 17 May 2022 13:30:29 +0000.