Crude oil prices rebound sharply after sanctions against Russia are stepped up

As explained in the Daily Eco, the EU and the US have stepped up the pressure on Russia by significantly tightening their sanctions against banks and, above all, the Central Bank. In theory, energy transactions remain largely unaffected, but in practice, customers are turning away from buying Russian Ural and ships no longer dare approach the Black Sea coast to load Russian oil. Western banks also seem to be stopping financing Russian oil deals. BP has announced that it is pulling out of Rosneft, while the Norwegian fund will also divest from Russia. There is also the risk that the flow of raw materials will be disrupted by the fighting (damaged pipelines, for example) or that Vladimir Putin will end up voluntarily cutting off supplies to Europe.

To counter a possible decrease or even interruption of the flow of Russian oil to the market, the US, Europe and their allies are still preparing a possible release of strategic reserves. The return of Iranian oil is also becoming increasingly likely, with a nuclear deal expected in the next few days. OPEC, which is meeting this week, is not expected to change its strategy, but there is a lot of uncertainty here too: what about the OPEC+ agreement with Russia in particular?

The price of Brent 1st-nearby is trading around $102/b. The risks remain to the upside in the short term. The widening price gap between Asian and European diesel prices should encourage Asian refiners to send diesel to Europe, even though demand in Asia is very strong.