Daily Update: Oil Markets Amid Russian Sanctions and Export Cuts
Today is?Friday, October 13, 2023, and here’s your?curated selection of essential intelligence on financial markets and the global economy?from?S&P Global . Subscribe?to be notified of each new?Daily?Update.?
In early September, Russian Deputy Prime Minister Alexander Novak announced that Russia would extend a 300,000-b/d oil export cut through the remainder of 2023. This followed previous export cut announcements aimed at bolstering prices and maintaining some modicum of stability and balance in oil markets.?
Russian seaborne oil exports hit an 11-month low in August, according to S&P Global Commodity Insights, and spot prices for Russia's key Urals export grade have been trading above the Group of Seven's $60/b price cap since mid-July. However, according to an official from the US Treasury Department , the price cap cut Russia's production and revenue. Meanwhile, the price caps may not harm only Russia's coffers. Russian Energy Minister Nikolai Shulginov said in September that the G7-led price caps are damaging the world economy .
Much of the sanctioned Russian crude found its way to China and India, and the former, according to Shulginov, is expected to take in over 100 million metric tons of Russian exports by the end of 2023 — a 15% year-over-year increase. One of the ways Russian exports continue without significant decrease, albeit at levels not as voluminous as a year ago, is through ghost fleet vessels. Opaque transfers of Russian oil at sea more than tripled in the second quarter from the previous quarter, suggesting it has turned to ghost fleet tankers to sidestep the EU embargo and G7 price cap. In the second quarter, at least 47 million barrels of Russian crude and products were transferred via vessels that have records of turning off their location transponders, according to data from S&P Global Market Intelligence and S&P Global Commodity Insights.
Still, shipping companies are abiding by the relatively new hurdles. Fractal Shipping was one of the largest loaders of compliant Russian crude and products after the EU and G7 imposed sanctions. In early July, however, the $60/b price cap was breached, closing the trade for Fractal Shipping while the company continues moving some Russian oil products that still trade below the price caps, according to CEO Mathieu Philippe. At its peak, Fractal Shipping used about half of its ships to transit Russian crude from the Baltic Sea to China.
The whiplash of world events over the last several years has made for volatile oil markets. This volatility was captured during discussions in September among market participants at S&P Global Commodity Insights’ 39th annual Asia Pacific Petroleum Conference in Singapore. Dave Ernsberger, global head of pricing and market insight for Platts, an offering of S&P Global Commodity Insights, described this year's conference as "neither the peak nor the trough of the economic and emotional rollercoaster of the past few years, but more of getting back to business." The market participants can do that, as Ernsberger described, because of some breathing room provided by the "fact that nothing cataclysmic has happened in the last 10 months."
Today is Friday, October 13, 2023, and here is today’s essential intelligence.
Written by Wyatt Scott.
Economy
Renewed Fall In Global Demand Fueled By Rising Impact Of Higher Interest Rates
The Global PMI data — compiled by S&P Global across over 40 economies and sponsored by JPMorgan — showed a deepening downturn in demand for financial services in September amid a further faltering of the post-COVID travel surge that had helped drive robust economic growth in the second quarter. The growing signs of weakness in interest-rate sensitive sectors has accompanied a spreading manufacturing malaise. The resulting renewed overall downturn in global demand in September bodes ill for economic growth momentum in the fourth quarter.
—Read the article from S&P Global Market Intelligence
Capital Markets
What Can You Trust In A Trustless System: Public Blockchains For Financial Applications
Technological improvements supporting scalability, permissioned networks and privacy may address the main inhibitors to the adoption of public permissionless blockchains by financial institutions, with several regulators and official bodies experimenting with the technology. Although decentralization in public permissionless blockchains reduces reliance on intermediaries in the traditional sense, these blockchains still include material trust assumptions and dependencies. Understanding these risks is key to a successful use of the technology.
—Read the report from S&P Global Research Council
Global Trade
领英推荐
Prospects For Q4 Recovery In The Balance Amid Mixed Signals
West of Suez VLCC market participants expect rates to hold steady — or even firm — into the fourth quarter, after a particularly volatile period that saw rates drop to near 16-month lows in mid-September before mounting a recovery. Market sources cited various reasons beyond seasonality for this weakness, including a lengthy tonnage list, low inquiry levels, extended OPEC+ oil production cuts, uncertainty over China's economic prospects and weakness in adjacent markets.
—Read the article from S&P Global Commodity Insights
Sustainability
Case Study: Physical And Transition Climate Risk — Two Sides Of The Same Coin?
Climate risk professionals are often faced with debates and discussions about the necessity for assessing both physical and transition risk in an integrated manner. Although there is a fear of underestimating the financial impact if the risks are assessed separately, the complexities and uncertainties of conducting a combined analysis can overshadow this concern.
—Read the article from S&P Global Market Intelligence
Energy & Commodities
Oil Product Stocks Rise To Three-Month High
Stockpiles of oil products at the UAE's Port of Fujairah rose to a three-month high in the week to Oct. 9, though still lower compared with levels seen a year earlier, according to data from the Fujairah Oil Industry Zone. Total inventories rose 6.4% to 19.8 million barrels, the highest since July 10, FOIZ data provided exclusively to S&P Global Commodity Insights showed. The stockpile stood at 24.9 million barrels on Oct. 10, 2022. In the week to Oct. 9, light distillates increased 26.9% to a three-week high of 5.8 million barrels, while middle distillates rose 7% to 2.5 million barrels.
—Read the article from S&P Global Commodity Insights
Technology & Media
As Scope 2 Targets Loom, Car Industry Looks At PPAs To Secure Green Power
With the transport and mobility sector accounting for about 23% of global energy-related greenhouse gas emissions, behind the power generation industry with 42%, the entire sector is under heavy pressure to reduce its carbon footprint to comply with the Paris Climate Agreement. It is interesting that many car manufacturers have set ambitious targets for clean energy procurements, with commitments following the aggressive technology and financial sectors.
—Read the article from S&P Global Commodity Insights
Pharmacist at S&P Global
1 年Thanks for sharing