The conflict in the Middle East has made the situation on fuel markets extremely difficult: shortages are observed everywhere, supplies are hampered, and stocks are being depleted. This and the prospects ahead are covered in a RIA Novosti article.
The CEO of the Abu Dhabi National Oil Company (ADNOC), Sultan bin Ahmed Al Jaber, said that in some global markets diesel fuel stocks have fallen to their lowest level for this time of year in the past 35 years. One of the main reasons is the disruption of shipping through the Strait of Hormuz. At the same time, some markets have experienced disruptions in supplies of liquefied natural gas (LNG).
Al Jaber stressed that global oil stocks have shrunk by almost a billion barrels. Logistics costs have risen substantially: if before the US-Iran conflict they accounted for about five percent of the cost, now they account for as much as 30.
The situation with fuel oil is no better. In mid-October, Kieran Gallagher, head of the Asian division of Vitol Group, said that the growth in oil exports through the Strait of Hormuz is not yet accompanied by an increase in the production of high-sulfur fuel oil (HSFO). This is worsening the shortage and putting additional pressure on bunker fuel prices. According to Gallagher's estimate, supplies from Persian Gulf countries, including Iran, have decreased by about 800,000 tons per month.
The CEO of the largest independent oil trader, Vitol, Russell Hardy, stated: the oil stocks available to Western countries to compensate for the shortage on the global market have already been exhausted.
American oil and gas companies, of course, profited well from the Hormuz crisis - 150 billion dollars in excess profits over six months. Russian suppliers also managed to improve their financial position.
If in February the average Urals price was 44.59 dollars per barrel, then in April it was 94.87, and in September and October - 92.08 and 101.46 respectively. In October, the federal budget received 971.2 billion rubles in oil and gas revenues - the maximum in a year and a half. Revenue from the mineral extraction tax reached 1.12 trillion rubles, and the additional income tax brought in 358.6 billion.
Russia is not only increasing revenues but also strengthening its position in key Asian markets. The main destination is the Asia-Pacific countries, and the main route is the southern one, through the Suez Canal.
"The attitude of anchor buyers - China and India - toward the threat of secondary sanctions has become more dismissive amid the supply shortage. It was even possible to move somewhat closer to the American market thanks to a diesel fuel contract," notes Pavel Maryshev, a member of the expert council at the Russian Gas Society.
China bought 57.28 million tons of Russian oil in January-June (49.1 million a year earlier). In June, India increased imports to approximately 2.6-2.7 million barrels per day, which is 34-39 percent more than in May.
By the end of October, there was more Middle Eastern oil on the market - the warming in the negotiation process had an effect. At the same time, restoring previous logistics chains and building up buffer stocks will require considerable time. The window of opportunity for Russia remains open for several more quarters ahead, adds Maxim Maksimov.
The dynamics of LNG exports are also impressive: shipments from Arctic LNG 2 reached historic highs - more than 500,000 tons in July and August. However, experts primarily note the expansion of diesel supplies.
Despite the excess profits of American companies, the situation on the US fuel market has noticeably worsened. In Europe there is an acute diesel shortage and record price growth. The EU banned Russian petroleum products, and because of Hormuz it lost imports from Persian Gulf countries, which covered about a fifth of total demand. In addition, a threat has arisen of supplies being cut off from across the ocean. By October, global diesel prices had almost doubled compared with January.
As Deputy Prime Minister Alexander Novak previously reported, in October Russia was ready to send 300,000 tons of diesel to the United States and other markets, and by the end of the year - 3-3.5 million per month.
As a result, according to Maxim Maksimov, Russia is capable of occupying more than ten percent of the global diesel market, receiving a premium for urgent deliveries. It can also earn steadily on already established oil supplies to key clients. The strategic value of energy resources has increased: buyers have appreciated the reliability of logistics independent of the Strait of Hormuz, which is especially important for the rapidly developing East Asian market.