A gas station in Haidian District, Beijing.

Photo by China News Service reporter Zhang Xu

  Zhongxin Finance, March 3 (Reporter Zhang Xu) International crude oil prices have risen sharply, and domestic oil prices may rise for four consecutive years.

  On March 2, international oil prices rose sharply due to the situation in Russia and Ukraine and other factors.

The main contract of Brent crude oil futures and the main contract of WTI crude oil futures both rose more than 7% at one time, breaking through the $110 mark.

  In the domestic futures market, half an hour after the opening of the market on the 2nd, the main contract of Shanghai crude oil futures hit the daily limit, with an increase of up to 7.99%, continuing to hit a new high since its listing, and asphalt, low-sulfur fuel oil, etc. followed suit.

  Just two years ago, affected by comprehensive factors such as the new crown pneumonia epidemic, on April 20, 2020, the May contract of WTI crude oil futures fell to a negative value for the first time in history, at -37.63 US dollars.

  Behind the surge in international crude oil prices is that Russia has faced sanctions and increased uncertainty in the energy market.

  A number of institutions said that the rising international oil prices means that the next round of domestic refined oil price adjustments is likely to rise, and oil prices may rise for four consecutive years this year.

  According to the principle of "ten working days", the current round of domestic oil price adjustment window is 24:00 on March 3.

According to the calculation of Jinlianchuang, as of the ninth working day of March 2, the average price of reference crude oil varieties was 96.96 yuan/barrel, with a change rate of 4.60%, and the corresponding domestic gasoline and diesel retail prices should be raised by about 170 yuan/ton.

  Jinlianchuang fuel oil analyst Zhou Mi said that at present, Russian crude oil has various risks due to economic sanctions in terms of shipping, bank credit and settlement.

At the same time, Western countries' demand for Russian crude oil has dropped to freezing point, especially recently, the European market has turned to buy Brazil and North Sea crude oil as an alternative.

  "In the short term, the international community's economic sanctions against Russia will have a certain impact on the structure of imported crude oil and the cost of imported crude oil for domestic refineries. The follow-up development of Russian crude oil is still pending. It is recommended that practitioners pay close attention to the development of the situation in Russia and Ukraine and the specific situation. Sanctions details."

  The impact of US and European sanctions on Russia is also emerging.

  Up to now, BP, Equinor, Shell, Exxon Mobil, etc. have successively announced their withdrawal from oil and gas cooperation with relevant Russian energy companies, and these companies have also suffered losses to varying degrees.

  BP said the exit could result in a loss of $25 billion; Equinor’s joint venture in Russia is worth about $1.2 billion; Shell has about $3 billion in illiquid assets in the Russian joint venture by the end of 2021.

Total Energy also announced on the 1st that it is evaluating the impact of the relevant sanctions on the company's activities in Russia.

  Russia plays a pivotal role in the global energy market.

Russia is the third largest energy producer in the world. In 2021, about 30% of crude oil and 40% of natural gas in Europe’s oil and gas imports will come from Russia; in addition, Russia’s oil and gas exports will account for the total global oil and natural gas exports. 12% and 21%.

  According to Jinlianchuang, Russia exports about 4-5 million barrels of crude oil and 2-3 million barrels of refined products to the world every day. Therefore, once Russia is expelled from the SWIFT payment system, the supply of crude oil and its petroleum products will be cut off. Goldman Sachs believes a slowdown in demand of at least 4 million bpd is needed to offset it.

  Lin Boqiang, dean of the China Energy Policy Research Institute at Xiamen University, told Chinanews.com: "Geopolitical conflicts often lead to a rise in international oil prices. Brent crude oil broke through a high of $110 today (March 2), and the conflict between Russia and Ukraine continues. , in the short term, international oil prices will still rise.”

  He further stated that if the conflict is not properly resolved, sanctions will substantially affect Russia's oil trade and investment, and international oil prices may remain high for a long time.

(over)