How Volatile Is Crude Pricing Right Now?
Russia–Crude prices are again volatile as a possible nuclear deal with Iran in on the anvil. Oil prices have said to have fallen due to crude inventory by the US being on the increase and Russia resuming pipeline exports to Europe. This has indeed eased supply concerns in a tight market.
After the Gazprom skirmish, Russia has finally resumed the supply of oil through the southern Druzhba pipeline on Wednesday evening, Russian state-owned news agency has confirmed. The pipeline operator here is Transneft.
Nuclear deal talks in Vienna have concluded, with the EU suggesting a final text will now be put forward for the US and Iran to either agree upon or reject.
Economists can see that if an agreement is reached, it would “unlock the Iranian oil and give a certain relief to the tight-supply market.” Current forecasts still point to global demand exceeding pre-Covid levels by next year, while suppliers continue to struggle under existing constraints. Still, the risk is that major economies instead experience a deeper- or longer-than-expected recession, eroding the expected global demand growth.
According to a Goldman Sach analyst, there is no quick fix solution to the problem of energy crises across nations that are sanctioned by Russia, a nation that is heavily supplying energy fuels to the rest of the world.
G7 nations are currently discussing a potential price cap on Russian oil to lower costs, aiming to propose the plan to by December 5. President Biden has also been looking to secure more supply for Europe as Russia cuts it off from its natural gas flows, recently traveling to Saudi Arabia to ask for another oil production hike.
Sach reps add, “The spare capacity is largely gone,” Vigna said of the cartel, estimating that OPEC+ nations had a remaining production capacity of roughly 1 million barrels a day, the smallest in about 20 years.