Anyone who owns a car will certainly have noticed: the oil price has risen sharply in recent times. After the comment by US Secretary of State Blinken that the United States and allies are discussing a ban on the import of oil from Russia, the price went even further through the roof.
Can that just be, stop with Russian oil, what does that mean for the oil price, and two more questions.
Why is the price of oil rising?
The oil market is determined by supply and demand. Fewer and fewer parties are buying Russian oil, so that price falls, with or without a substantial discount. Last weekend For example, it became known that Shell could buy Russian oil at a bargain price.
Because fewer parties want Russian oil, but the demand for oil has remained unchanged, the demand for non-Russian oil is only increasing. So that price will go up.
According to Hans van Cleef, energy expert at ABN Amro, about 8 percent of the global oil supply comes from Russia. “In Europe, the dependence on Russian oil is even greater. Of the 8 million barrels of oil that Russia exported until last week, about 7 million went to Europe.”
How does the global oil market work?
Oil is traded in an international market in two ways. Either physically through the buying and selling of cargoes of oil, or on paper through the trading of oil contracts.
That trading in long-term contracts, also called futures, explains energy expert Sjak Lomme as follows: “Suppose KLM says that they need 100 tons of kerosene in July, then you as a refinery want to know how much they will pay for the required oil. You agree: then I will buy this quality oil for this price. You make an appointment for the future.”
And these contracts are increasingly traded on the stock exchange, Van Cleef sees: “Such a contract can easily change owner 15 times via hedge funds and brokers, before it ends up from producer to the actual buyer. Many contracts have a different owner in the morning. then in the evening.”
Will the price of oil continue to rise?
Van Cleef and Lomme both think that prices will rise for a while before stabilizing.
“You see that Russian oil is still being traded, but with huge discounts,” says Lomme. “After the criticism of Shell, a company is scratching its head before it buys up Russian oil. But that means that fewer and fewer parties are buying Russian oil, making that oil increasingly cheaper, and non-Russian oil only more expensive.”
The graph below shows that the price of Ural oil (Russia) and Brent oil (Europe) are diverging further and further. The kink in the price of Ural oil was on Friday 4 March, the day Shell bought a cheap shipment of Ural oil.
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