America decided to oust Russia from the world oil market

A barrel was predicted to soon rise in price to $100

The West is convinced that it will soon destroy the Russian raw materials industry with its sanctions. According to European Commissioner for Energy Kadri Simson, although Russian Deputy Prime Minister Alexander Novak claims that our country is voluntarily reducing oil production, Moscow was forced to take such measures by new fuel sanctions. At the same time, the United States is slowly increasing the production of “black gold” in the hope of conquering the market of the Old World. Against this background, oil prices are showing rapid growth.

“It was not voluntary. It was forced on them. They don’t have the ability to maintain production because they don’t have access to technology,” Simson said in response to Novak’s recent announcement that Russia voluntarily cut oil output by 500,000 bpd in March. According to her, Western sanctions have limited Moscow’s ability to find buyers for all 10.9 million barrels per day that our country produced in 2022. Even despite the big discounts that domestic manufacturers provide to Asian buyers. At the same time, the European Commissioner promised that Russia’s reduction in the production of “black gold” would not lead to an increase in prices.

Stock speculators refuted Simson’s forecast. Immediately after Novak’s statement, oil jumped in price to $87 per barrel, adding almost 3% per day. In just a week, Brent quotes rose by more than 8%, which was the highest figure in the last four months. Market players were not even embarrassed by the announcement of the US Department of Energy about the increase in daily production of raw materials in March at the main US oil and gas fields by 75 thousand barrels and the sale by the States of 26 million barrels from its strategic reserves.

Unlike the EC Energy Commissioner, many in Europe tend to think that the world market should prepare for a rise in the cost of fuel resources. According to the major Polish news web portal Interia, a global rise in oil prices cannot be avoided. According to analysts of the publication, with the recovery of the Chinese economy, quotations of raw materials may rush up sharply and exceed the mark of $100 per barrel.

Russian experts are also confident that even an increase in production at American fields will not become an obstacle to accelerating the cost of energy resources. “Relatively low oil prices ruined forecasts of a recession in the global economy, but in February it became obvious that they were on the rise: China is easing pandemic restrictions, and high inflation in Europe is no longer so likely,” believes the director of the corporate finance department at IVA Partners Investment Company. Artem Tuzov. — There is a demand for energy resources and prices are rising. According to the most modest forecasts, quotes will soon overcome the bar of $90 per barrel.”

True, according to the head of the analytical department of AMarkets Artem Deev, for now, all the cream from rising prices will go to the United States and Arab states, which are able to make up for the volumes of Russian raw materials falling from the European market. “The White House has never hidden that it intends to disconnect our suppliers from Old World buyers to the maximum, and so far this strategy has justified itself,” the expert says. According to analysts at the North American CME Group, last year the total volume of oil supplies from the United States to Europe increased by 70% to 1.75 million barrels per day. Now that a price “ceiling” has been introduced for Russian oil and fuel, and our country is switching its main supplies to the Asia-Pacific region, Washington will be able to further increase the number of tankers sent overseas.

Domestic industry experts, however, still retain some optimism and believe that sooner or later Russia will return to the market of the Old World. “For hundreds of years, our country had disagreements with European states, but over time, conflicts were replaced by a transition to partnerships. It will be so now, – Tuzov is sure. “Our oil and oil products have not disappeared from the EU market, it’s just that raw materials come mixed with “non-toxic” hydrocarbons produced in other regions of the world. In addition, supplies are maintained through the Druzhba pipeline, through which our “black gold” goes to Hungary, the Czech Republic and Slovakia, and Bulgaria is completely allowed to buy Russian oil delivered by sea.”

In general, by declaring a war of destruction on Russian energy resources, the members of the European Union put themselves in a difficult position. Having changed our country to other trading partners, they have to buy energy resources at inflated prices. Moreover, there is little hope that the United States and the Middle Eastern countries will be able to make up for Europe’s lost West Siberian volumes. “According to the International Energy Agency, this year Russia will reduce daily oil production by 1.7 million barrels (until recently, this raw material was sent to the EU – MK). In turn, as the US Department of Energy predicts, by the end of 2023, the production of raw materials at American fields will increase by only 620 thousand barrels per day, ”explains Natalia Milchakova, Leading Analyst at Freedom Finance Global. According to the expert, Europe could be rescued by OPEC, but in practice the organization is unlikely to rush to help. Saudi Arabia, the UAE and other leading producing countries of the cartel are interested in maintaining a shortage of hydrocarbons, since in such a situation they will be able to increase profits due to high prices. In addition, for OPEC, as well as for Russia, not the European, but the Chinese and Indian markets are of great importance. “Our country theoretically, of course, can resume sea supplies of raw materials to Europe, but only when the embargo and the price ceiling are lifted. However, the West is not going to lift its sanctions, and Moscow has explicitly stated that it will not resume supplies if these conditions are maintained. Therefore, Russia’s oil comeback to Europe will not happen very soon – it will take several years, if not decades,” Milchakova is sure.