Global oil prices fell on Tuesday amid reduced concerns about supply disruptions following the resumption of shipments at the Russian export hub in the Black Sea. Traders are also closely analyzing the further impact of Western sanctions on oil supply volumes from Russia.
This is reported by Finway
Brent and WTI Price Dynamics
Brent crude oil futures dropped by 46 cents, or 0.72%, to $63.74 per barrel. Meanwhile, U.S. oil West Texas Intermediate (WTI) lost 45 cents, or 0.75%, trading at $59.46 per barrel.
IG analyst Tony Sycamore explained that the overall trend in oil prices remains moderately negative, as the resumption of loading in Novorossiysk occurred earlier than expected.
Impact of Sanctions and the Situation on Russian Export Routes
“Market concerns are focused on the accumulation of oil on tankers as buyers assess the risk of potential sanction violations… We expect that any disruptions due to U.S. sanctions will be temporary, as Russia will find ways to circumvent the sanctions again,” said Vivek Dhar, a strategist in mining and energy commodities at Commonwealth Bank of Australia.
Earlier on Friday, exports from Novorossiysk and the neighboring terminal of the Caspian Pipeline Consortium were temporarily halted. These two facilities account for about 2.2 million barrels of oil per day – approximately 2% of total global supply. The temporary halt led to a spike in crude oil prices of more than 2% the same day.
The U.S. Department of the Treasury reported that sanctions imposed in October against “Rosneft” and “Lukoil” have already reduced Moscow’s oil revenues and will limit Russian export volumes in the future.
Analysts at ANZ Research state that Russian oil is currently being sold at a significant discount to global benchmarks. At the same time, traders are refocusing on the long-term implications of Western sanctions for the commodity market from Russia.