Yields on crude and petroleum products rose 11% year-on-month despite a 3% drop in exports, according to the International Energy Agency’s monthly report.
Western countries have imposed sanctions on Russian oil and gas – the Kremlin’s largest source of revenue. The United States has banned imports of Russian fuel, and the UK and the EU have agreed to phase out their use. However, Asian nations, including China and India, boosted imports of Russian fuel, lured by record discounts of more than 30% on Brent crude. Russia was able to cope with the rebates due to the rise in the price of Brent crude. The Urals, Russia’s main export mix, averaged $ 78.81 a barrel in May, up nearly 12 percent from a month earlier. Oil prices rose 70% year-on-year to about $ 121 a barrel. Although the price fell this week due to fears that the US Federal Reserve will surprise markets with a higher-than-expected rate hike. The US government seems ready to follow the Chancellor of the United Kingdom, Risi Sunak, in introducing an unexpected tax on the excessive profits of oil companies. Goldman Sachs said last week that oil prices could reach $ 140 this summer, causing more pump pain. The British are facing record prices for petrol and diesel due to the weakened pound and the compression of the refining capacity. Wholesale gas prices are also rising as the extensive shutdown of the Freeport liquefied natural gas (LNG) plant following a fire at US facilities and the cut in supplies through Russia’s Nord Stream 1 pipeline sparked supply concerns. The’s overnight gas contract in the UK rose 10p to 180p per heat and the next day’s contract jumped 14p to 180p per heat – a two-month high for both contracts. UK gas contracts for delivery in July rose about 25% to 97 1.97 per heat. Freeport LNG said Tuesday that repairs at its Texas Gulf Coast plant after an explosion last week could take until the end of the year and it will restart some operations in 90 days instead of July. The supply headache for European countries has worsened as Russia says it will reduce the capacity of the huge Nord Stream 1 pipeline to Germany by about 40%. Moscow has reacted after delays in the return of gas turbines to Russia’s Gazprom, which Siemens Energy said were blocked by Canadian sanctions after maintenance in Montreal. Analysts at Jefferies have warned that issues at Shell’s Prelude liquefied natural gas plant off Western Australia could also affect volumes. Workers began weeks of strikes last week and a survey by regulators on the area’s smoke detectors may also affect supply. Last week, the head of the International Energy Agency, Fatih Birol, described the failure of governments and businesses to accelerate energy efficiency efforts as “unexplained”.
