The price of a barrel of oil rose this Monday in New York as a result of the entry into force of the sanctions of the European Union and the Group of 7 (EU/G-7) on exports of crude oil and derivatives from Russia and for the closure of some ports of Turkey, after a devastating earthquake that affected that country and Syria.
The EU/G-7 imposed a ban on Russian refined energy products and set a maximum price of $100 for “high value” Russian exports such as diesel and gasoline and $45 for “lower value” products. , such as fuel oil, within the framework of a series of sanctions imposed on the Kremlin for the invasion of Ukraine.
These sanctions are added to those established as of December 1, when the governments of the European Union provisionally agreed to limit Russian oil transported by sea to a ceiling of 60 dollars per barrel, with an adjustment mechanism to maintain 5 % below the market price.
For analysts, the ban will have a greater impact on Russian diesel and naphtha flows to the EU.
However, European buyers had time to prepare for such a ban and in the run-up to the cut, there was an increase in flows of middle distillates to the EU, helping to boost stock levels at port facilities in the region. from Amsterdam-Rotterdam-Antwerp (ARA).
For her part, the United States Secretary of the Treasury, Janet YellenHe said the G-7 industrialized countries were imposing a price ceiling on Russian refined oil products such as diesel, as part of a coalition that includes Australia and an agreement with the European Union.
The sanctions of the European Union on the import of Russian oil entered into force https://t.co/NEQMU2TqBZ
– Telam Agency (@AgenciaTelam) February 6, 2023
A similar limit was previously imposed on exports of Russian crude oil, aimed at reducing the financial resources available to Moscow, following nearly a year of war in Ukraine.
This caused oil and gas revenues in the Russian budget, amounting to 426 billion rubles (5.96 billion dollars) in January 2023 and decreased by 46% compared to January 2022, according to the Ministry. of Finance of the Kremlin.
“Oil and gas revenues amounted to 426 billion rubles and decreased by 46% compared to January 2022which was mainly due to falling Ural oil prices and a decline in natural gas exports,” the ministry said.
On the Russian side, the Foreign Minister, Sergey Lavrovdescribed on Monday as “illegal” the restrictions and sanctions imposed on Russian oil imports, in the framework of a meeting with his Iraqi counterpart, according to Agence France Press.
Lavrov argued that “in the current conditions of illegal restrictions imposed by the Americans and their satellites, it is very important to protect legal economic relations from illegal pressure from the West.”
Meanwhile, the foreign minister of Iraq, fuad husseintold a news conference that he would “address the issue of unpaid bills to Russian oil companies because of US sanctions over the conflict in Ukraine during a visit to Washington on Wednesday.”
This earthquake is the most important in Turkey since the earthquake of August 17, 1999, which caused 17,000 deaths, a thousand of them in Istanbul https://t.co/WvT7yNFvKS
– Telam Agency (@AgenciaTelam) February 6, 2023
The Iraqi minister considered that “sanctions should not be imposed on Baghdad because its cooperation continues with Russian companies,” and explained that “Russian oil and gas companies operating in Iraq were still waiting for some payments.”
Meanwhile, Saudi Arabia unexpectedly raised most prices for oil to be shipped to Asia in March, the Bloomberg news agency reported Monday.
Beyond geopolitical reasons, lOil prices also found support as the strong earthquake that hit Turkey and Syria forced the halt of operations at Turkey’s Ceyhan oil terminal. It arrives via the Northern Iraq Oil Export Pipeline from Kirkuk.
The positive data was – according to the Turkish oil pipeline operator BOTAS – that there was no damage to the main pipelines that transport oil from Iraq and Azerbaijan.
“Turkish exports at the port of Ceyhan came to a halt while the region’s main source of crude through a pipeline from Iraq was shut down, raising supply concerns. But as long as inspections do not reveal any major damage that will keep the pipeline or port operations offline for more than a few days, the impact on the market should be limited,” said market analysts.
Within this framework, natural gas contracts in the futures market rose 3.2% and traded at $2.50 per million BTU as a result of a new cold snap that brought extremely low temperatures to the northeast region of the United States. United States, although weather forecasts indicate that it is a short winter period.
