On February 2, 65438, EU governments agreed to set a price ceiling of $60 per barrel for Russian offshore oil, and established an adjustment mechanism to keep the ceiling at 5% below the market price. By contrast, the price ceiling originally proposed by G7 last week was $65-$70 per barrel, and there was no adjustment mechanism.
The EU document also shows that the price ceiling will be reviewed in the middle of June 5438+ 10 next year, and then the operation of the plan will be evaluated every two months to deal with the possible "turmoil" in the oil market.
If the EU and G7 can reach an agreement, they will start to impose a price ceiling on Russian crude oil on February 5, 65438, replacing the EU's direct ban on Russian crude oil and ensuring global oil supply.
On the whole, the price ceiling of $60/barrel has little impact on Russia, which is almost the same as the discount price of Russian oil. The price ceiling of $60 oil is basically "better than nothing".
From the uneventful trend of international oil prices, we can also see the chicken ribs on the price ceiling. 65438+February 1, the futures price of light crude oil for June delivery in the New York Mercantile Exchange rose by 0.83% to close at 8 1.22 USD/barrel; London Brent crude oil futures for February 2023 fell 0. 10% to close at $86.88 per barrel. On February 2, 65438, the international oil price dropped little.
The oil price cap has limited impact.
After the implementation of the price cap, the EU and G7 will prohibit shipping, insurance and reinsurance companies from operating Russian crude oil commodities on a global scale unless the sales price is not higher than the stipulated price. Since the major shipping and insurance companies in the world are in G7 countries, the price ceiling will make it difficult for Russia to sell oil at a higher price.
The price ceiling has two main purposes. First, it is to reduce Russia's oil revenue through the price ceiling, and also to ensure that Russia will continue to supply crude oil to the world, but it is not easy to grasp the balance. A low oil price cap may stir up the market, trigger Russian retaliation, and push up prices and freight rates, while a high oil price cap may have little impact.
Therefore, many EU officials also question the significance of the price ceiling. In the process of balancing the interests of European countries and G7 countries, the price ceiling should not be set too low. In a sense, such sanctions have become a ritual move.
According to Russian data, the proposal of $60/barrel is only slightly lower than the current price of Ural crude oil, and the trading price of Ural crude oil has been basically lower than the price of Brent crude oil by more than $20/barrel, which also means that the current price ceiling has little impact on Russia. According to ArgusMedia, a well-known market pricing company, the price of Ural crude oil even fell to $ 45.8+0/barrel this week.
According to Gui Chenxi, chief energy analyst of CITIC Futures, after Russia announced its special military action at the end of February, it triggered large-scale sanctions in the United States and Europe. The International Energy Agency and us energy information administration predicted that sanctions would reduce Russian output by 654.38+500,000-3 million barrels per day in the second half of the year. However, from the actual situation, as of the end of 10, Russian crude oil production only decreased by about 200,000 barrels per day, and exports even increased to a three-year high. Almost all the reduction in exports to Europe has been transferred to Asia.
After the escalation of the conflict between Russia and Ukraine, Russian petroleum and petroleum products originally shipped to Europe began to gradually turn to Asia, and India is a typical example. According to Luft, Reliance Industries, the operator of the world's largest refinery, is snapping up Russian refined fuel oil and rarely buying Russian naphtha.
From September to June this year, India imported about 4 1000 tons of Russian naphtha, of which Reliance received about 150000 tons of naphtha from Lugo, TuApche and Novorossiysk ports in Russia. In contrast, Reliance never bought Russian naphtha in 2020 and 20021year. In the four years up to 20 19, Reliance imported very little Russian naphtha every year.
Under the influence of geopolitics, the behavior of "going further and further" will naturally lead to soaring freight rates. More and more tanker owners avoid related trade, and the transportation cost of Russian crude oil has soared. Some top tanker owners from European countries such as Greece will stop providing shipping and other services for Russian crude oil.
According to the data of ship brokers, after the latest EU-Russia oil sanctions come into effect on February 5, 65438, the freight from the Baltic Sea to India will reach about150,000 US dollars, that is, 20 US dollars per barrel, compared with about 9 million US dollars before. However, if the price of Ural crude oil is lower than the price ceiling, it is not clear whether the freight from the Baltic Sea to India will remain at a high level of $6.5438+0.5 million.
Gui Chenxi believes that in 2023, it is necessary to focus on whether the EU's oil sanctions against Russia will continue to be implemented as planned and the actual impact on Russian supply. Whether Russia can continue to maintain production this year, or choose to actively reduce production and protect prices, will lead to a major adjustment in the balance between supply and demand and oil price expectations.
The supply outlook is unpredictable.
Compared with the gradually slowing demand, the supply side of the oil market is more uncertain.
Earlier this week, the market was almost sure that OPEC+would announce further production cuts at its meeting on February 4, 65438, but then the situation changed. The OPEC+meeting is held online rather than offline. It is reported in the market that OPEC+may keep its output unchanged, the prospect of crude oil demand improves, and the possibility of the Fed slowing down interest rate hikes is increasing.
JoePerry, a senior analyst at Jiasheng Group, told reporters that the impact of the price ceiling on Russian oil supply is not yet fully clear, and there are also variables in the demand outlook under the epidemic. Whether OPEC+65438+will further reduce production on February 4 is uncertain, and it is estimated that it will "play it by ear". If OPEC+keeps its production policy unchanged, but China's demand increases, the price of crude oil will still rise.
Gui Chenxi believes that if the Organization of Petroleum Exporting Countries continues to hedge demand variables through output adjustment and achieve a dynamic balance between supply and demand, it may keep oil prices at a high level.
It should be pointed out that OPEC+has significantly reduced production last month. On October 5th, 65438/kloc-0, Saudi Arabia, Russia and other non-OPEC oil-producing countries announced that their daily oil production would be reduced by 2 million barrels from1October 165438. After the new agreement was reached, the output reduction of the Organization of Petroleum Exporting Countries last month reached the largest since 2020. According to the survey, in June, the crude oil supply of the Organization of Petroleum Exporting Countries decreased by 6.5438+0.05 million barrels per day +0. 1.08, and the average daily output was 28.79 million barrels. Saudi Arabia's daily output decreased by 470,000 barrels to 6.5438+0044 million barrels per day, and Kuwait and the United Arab Emirates also significantly reduced production.
On the other hand, Russia's output was unexpectedly unaffected. Including crude oil and condensate oil, Russian oil production rose to an eight-month high of 1 1.9 million barrels per day.
At present, there are still some problems in the supply of oil market, especially in the United States and Europe. As winter approaches and oil price uncertainty intensifies, Biden's government is considering using more heating oil and crude oil reserves. The White House is considering whether to call on Congress to raise the ceiling of heating oil reserves, possibly doubling it, and establish additional reserves so that the government can release these reserves when supply is tight or oil prices rise again.
The US Department of Energy said in a statement: "Despite the recent improvement, the fuel inventory owned by this industry is still below average. The government continued to contact the industry and asked them to increase fuel stocks. The government continues to work with legislators and industry to find out all the options that can help American consumers. "
Correspondingly, the data released by us energy information administration this week showed that US crude oil inventories fell by12.58 million barrels last week, the biggest weekly decline since June 20 19, and the growth of refinery processing capacity was a key reason.
Looking ahead, Gui Chenxi predicted that in 2023, the slowdown of economic growth will be relatively certain, or the pressure of oil demand will remain high, while the influence of geopolitics on crude oil supply will be quite uncertain. Specifically, if geopolitical conflicts expand, Russia will take the initiative to cut production, and the Organization of Petroleum Exporting Countries will cut production excessively. , which may lead to an additional increase in oil prices. If the EU lifts the sanctions, Iran's nuclear agreement is reached, and the Organization of Petroleum Exporting Countries substantially increases its production, which may lead to a further drop in oil prices.