Adedapo Adesanya
By Adedapo Adesanya
The value of Brent crude on the global market increased by 5.3 per cent or $5.98 to $122.70 per barrel on Wednesday as disruptions to Russian and Kazakh crude exports added to worries over tight global supplies.
Also, the price of the United States West Texas Intermediate (WTI) crude futures appreciated by 5.18 per cent or $5.66 yesterday to trade at $115.50 per barrel.
Crude oil exports from Kazakhstan’s Caspian Pipeline Consortium (CPC) terminal on Russia’s Black Sea coast stopped fully on Wednesday after damage caused by a major storm and continued bad weather.
The market then reacted when Russian Deputy Prime Minister, Mr Alexander Novak, later said that oil supplies by the CPC may be completely stopped for up to two months.
The CPC pipeline carries around 1.2 million barrels per day of Kazakhstan’s main crude grade, which accounts for 1.2 per cent of global demand.
The situation adds to market worries about the ripple effect of heavy sanctions on Russia, the world’s second-largest crude exporter, after its invasion of Ukraine.
Meanwhile, US President alongside European leaders and representatives are set to announce more Russian sanctions at a meeting on Thursday in Brussels, including an emergency meeting of the North Atlantic Treaty Organisation (NATO).
The market stopped its recent rally at the previous session after indications show that European Union member countries remain split on whether to ban imports of Russian crude and oil products.
Poland as well as Latvia and its Baltic counterparts were among the most vocal supporters of restricting the purchases of Russian oil but Germany and some others noted that Russian dependency was too high a risk.
Following the other sanctions against Russia over its invasion of Ukraine, as well as buyers’ self-sanctioning, the global markets could lose around 3 million barrels per day of Russian crude and products supply.
Prices also shot higher after the Energy Information Administration (EIA) reported a crude oil inventory draw of 2.5 million barrels for the week to March 18 compared with a build of 4.3 million barrels for the previous week, which temporarily arrested the latest oil price rally.
