Page 114 - RusRPTSept23

Global oil consumption climbed to an all-time high of 103mn barrels a day in June and will increase further this month, according to the International Energy Agency. Meanwhile, supplies are shrinking as OPEC+ leader Saudi Arabia slashes output by 1mn barrels a day and warns of additional cutbacks.
But despite soaring more than 20% between late June and last week, Brent futures still haven’t cracked this year’s peak of $89 a barrel. The latest ascent is losing steam as hedge funds add short positions.
Part of the answer lies in supplies: Iran has restored production to a five-year high of 3mn barrels a day while it engages in tentative diplomacy with Washington. If negotiations on a renewed nuclear pact eventually culminate in a deal that removes US sanctions, Tehran may unleash even more crude.
But a bigger — and perhaps more important — barrier for oil bulls is posed by China.
At the outset of 2023, traders wagered that the rebound in Chinese demand as the country emerged from Covid lockdowns would propel crude toward triple digits.
Yet many analysts now warn that fuel consumption in the Asian giant may have already peaked for this year.
Oil imports sank to a six-month low in July, and a large chunk of earlier purchases remains in storage tanks. Consumer spending and industrial output has disappointed, unemployment has picked up and turmoil in the shadow banking industry is sparking wider fears over the country’s economic health.
● Tankers & Transport
Ukraine seeks to disrupt the export of Russian oil. The attack on the Olenegorsky Miner, a Russian landing ship, in Novorossiysk Bay puts the Russian oil export infrastructure at risk for the first time. As the FT points out, naval drones attacked the ship after Russia withdrew from the grain agreement and began its mass shelling of Ukraine's port infrastructure. However, the publication suggests an attack on Russia's oil export infrastructure will likely worry the White House and other Western capitals. Washington has long led efforts to avoid rising oil prices. On the night of August 4, explosions rang out near the port of Novorossiysk. The SBU confirmed the special operation, resulting in the Olenegorsky Miner being damaged. Also, last night near the Crimean Bridge the Sig, a large Russian oil tanker, was attacked by drones. In addition, Ukraine officially declared the water area of six Russian ports - Anapa, Novorossiysk, Gelendzhik, Tuapse, Sochi, and Taman - as a military threat zone. This may make it more difficult for Russians to insure their vessels.
Crude and condensate exports from Black Sea ports meet almost 2% of global oil demand (Russia also exports about 500 mb/d in products). Note that more
RUSSIA Country Report September 2023 www.intellinews.com