“Optimism is seeping away about progress in talks to achieve a ceasefire in Ukraine and that’s sent the price of oil on the march upwards,” Susannah Streeter, senior markets analyst at UK-based asset manager Hargreaves Lansdown, said. With little sign of the conflict easing, the focus returned to whether the market would be able to replace Russian barrels hit by sanctions. “With the possibility that more than a million barrels of Russian oil a day will be snubbed, given that the Netherlands and Germany combined received around a quarter of Russia’s crude and light oil exports, demand would shoot up for crude supplies from OPEC+ nations.”
Over the weekend, attacks by Yemen’s Iran-aligned Houthi group caused a temporary drop in output at a Saudi Aramco refinery joint venture in Yanbu, feeding concern in a jittery oil products market, where Russia is a major supplier and global inventories are at multi-year lows. The latest report from the Organisation of the Petroleum Exporting Countries and allies including Russia, together known as OPEC+, showed some producers are still falling short of their agreed supply quotas. Oil prices were also sensitive to talk of Hong Kong lifting COVID-19 restrictions, which could increase demand, and in response to the growing list of U.S. companies retreating from Russia – including Baker Hughes , ExxonMobil , Shell , and BP. Text by Reuters