Oil markets react to supply disturbances in USA and Russia
Oil prices are increasing on Wednesday due to disruptions in oil supplies in the USA and Russia, and markets are anticipating further details regarding peace talks in Ukraine, brokers report.
A barrel of West Texas Intermediate crude for March delivery costs approximately £57 on the NYMEX in New York, marking an increase of 0.31%. Brent on ICE for April is priced at around £60 a barrel, after a rise of 0.25%.
Russia reported that the flow of oil through the Caspian Pipeline Consortium (CPC), the main oil export route from Kazakhstan, was reduced by 30-40% on Tuesday following a Ukrainian drone attack on a pumping station. According to calculations by Reuters, a 30% reduction in flow would result in a loss of 380,000 barrels per day in supply to the market.
On 18th February, a team from CPC management and Western Consortium representatives was working at the station. The specialists' task is to undertake and complete repair work swiftly, in collaboration with contractors, to restore the functionality of all station facilities, as per a CPC consortium announcement.
The CPC Pipeline System is one of the major projects in the energy sector within the CIS. The length of the Tengiz – Novorossiysk pipeline is 1,510 kilometres. This route transports more than two-thirds of all Kazakhstan's oil exports and crude from Russian oil fields, including the Caspian region. The CPC Marine Terminal is equipped with three Single Point Moorings (SPM), which enable the safe loading of tankers at a considerable distance from the shore.
Frosts threaten U.S. supplies
Simultaneously, frosts are threatening oil supplies in the USA. The North Dakota Pipeline Authority estimated that production in the state could decrease by as much as 150,000 barrels per day due to the cold.
The U.S. administration under President Donald Trump reported on Tuesday that it agreed to further discussions with Russia regarding the cessation of the war in Ukraine. An agreement could alleviate or lift sanctions that have disrupted Russian oil supplies.
Trump enthusiastically referred to Tuesday's talks in Riyadh, which involved high-level U.S. and Russian delegations, stating that "he is much more confident" that Russia desires peace.
The U.S. president announced on Tuesday that he plans to impose tariffs on cars "around 25%" and similar tariffs on semiconductor and pharmaceutical imports. The tariffs could elevate consumer product prices and diminish fuel demand.
