On Tuesday, September 19, world oil prices reached their highest level in the last ten months. Thus, during trading on the ICE exchange in London, the cost of Brent crude rose by 0.95% and reached $2022.95 per barrel for the first time since November 33.
Oil quotes began to grow rapidly from the end of June and since then have increased by about a third. In many ways, this dynamics is due to the actions of the countries of the OPEC+ alliance, in particular Russia and Saudi Arabia, said Igor Yushkov, a leading analyst at the National Energy Security Fund.
"Back in February, Russia announced a reduction in oil production. Saudi Arabia and other OPEC+ members did the same. As a result, more than 1.5 million barrels per day left the market in the spring. In the summer, the trend continued, as Moscow and Riyadh decided to further reduce the supply of raw materials, "said the interlocutor of RT.
Recall that the OPEC+ agreement includes 23 oil-producing countries, including Russia and Saudi Arabia. As part of the deal, the states jointly control the production of raw materials and thereby regulate the supply of hydrocarbons on the world market. Such a policy is designed to keep the cost of oil from significant collapses.
Earlier, the parties agreed to reduce the total level of oil production by 2 million barrels per day by the end of 2023. In parallel with the official reduction, some parties to the deal decided to voluntarily reduce production by another 1.66 million barrels per day. As part of the initiative, Russia and Saudi Arabia began to reduce oil production most actively - by 500 thousand barrels per day each, and the remaining volumes were distributed between Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Algeria, Oman and Gabon.
In addition to this, since July, Saudi Arabia has begun to voluntarily reduce oil production by another 1 million barrels per day. Russia, in turn, decided to reduce the export of its raw materials: in August - by 500 thousand, and since September - by 300 thousand barrels per day. Both countries plan to follow this plan by the end of this year.
As noted in the International Energy Agency (IEA), until recently, the reduction in oil supplies to the world market by OPEC + countries was compensated for by increasing the production of raw materials in states outside the alliance. First of all, we are talking about the United States and Brazil. However, since September, the situation has changed against the backdrop of decisions by Moscow and Riyadh to further limit supply.
As a result, as early as the fourth quarter of 2023, a "significant deficit" may form in the global oil market, IEA experts predict. The growing scarcity of the resource, in turn, traditionally leads to an increase in its cost.
"The alliance between Saudi Arabia and Russia is proving to be a serious challenge for oil markets. Throughout August, the dynamics of oil prices at trading was relatively calm, and volatility was at its lowest level in many years. However, after Saudi Arabia and Russia decided in early September to extend the reduction in oil supply until the end of the year... Prices have risen sharply," the organization said.
- AP
- © Lisa Leutner
Against the backdrop of a reduction in global oil supply, global demand for fuel continues to grow steadily, especially in China. Under these conditions, a barrel of Brent oil may rise in price to $100 in the foreseeable future, Igor Yushkov did not rule out. A similar point of view is shared by Igor Galaktionov, an expert on the stock market at BCS World of Investments.
"The most authoritative analytical agencies agree that prices above $80 per barrel will persist until the end of 2024. In the near future, quotes may rise above $100 per barrel in the short term, but I think the corridor of $90-95 looks more stable in the long run, "Galaktionov suggested in a conversation with RT.
In addition, according to Igor Yushkov, OPEC+ countries are not interested in too much rise in oil prices, since excessively high prices scare away buyers and lead to a decrease in demand. Thus, in the event of further growth in quotations, the alliance may again increase production and exports, the analyst believes.
"Budget revenues have recovered"
Following the rise in the price of Brent crude oil, quotations of raw materials of the Russian Urals grade continue to grow. According to the latest estimates of the Ministry of Finance of the Russian Federation, from August 15 to September 14, its average price was $77.03 per barrel, which is significantly higher than the price ceiling set by the West.
Recall that since February 2022, after the start of a special military operation in Ukraine, the EU countries, together with the United States and a number of other states, began to alternately refuse to import Russian oil. Moreover, in an attempt to put pressure on Moscow and deprive it of profits from the sale of energy resources, the EU and the G7 banned their companies from insuring and transporting raw materials from the Russian Federation by sea to other regions of the world at a price above $60 per barrel.
In response, Russia imposed a ban on the supply of energy resources to anyone who requires compliance with the price ceiling when concluding contracts. At the same time, the country's companies began to rebuild trade routes, but at first they were forced to provide significant discounts. For example, at the beginning of 2023, a barrel of Brent was trading at an average of $81.8 on the world market, while Urals was bought at about $46.8. Thus, at that time the size of the discount was $35, but by mid-September this value had dropped to almost $10.
- RIA Novosti
According to the Ministry of Finance, taking into account the observed price dynamics, the Russian budget may receive more than 279 billion rubles of additional oil and gas revenues in September. Thus, the current state of affairs has a positive effect on the state of the Russian treasury, as President Vladimir Putin said the day before.
"In general, the situation is stabilizing in terms of the execution of the current federal budget. In August, it was once again executed with a surplus. Yes, in general, so far - starting from the year - there is a small deficit, but in August already with a surplus, and not for the first time ... Oil and gas budget revenues in July-August recovered approximately to the level of last year, and taking into account the situation on world markets, active growth continues (their. - RT), "Putin stressed.
According to Igor Yushkov, at the moment Russia is compensating for the revenue that it lost in the first half of 2023 - during a period of low prices and large discounts on oil. At the same time, in addition to improving the situation with the budget, the current state of affairs in the energy market can have a positive impact on the state of the national currency, Igor Galaktionov is sure.
"The rise in oil prices is positive for the ruble. However, this is not the only influencing factor. Of great importance will also be the volume of foreign exchange earnings, which will actually come to the country, as well as the dynamics of imports," Galaktionov added.