Page 103 - RusRPTOct23

warning about since the start of the year, are visible in the sharp drop in global oil inventories. This comes as demand is on track to reach a record 101.8 million barrels per day in 2023, mostly due to resurgent Chinese consumption.
This month’s Oil Market Report comes 40 years after the very first edition appeared in September 1983. The complexity of the international oil market has evolved over the past four decades – but concerns about energy security remain as critical now as they were then.
The extension of output cuts by Saudi Arabia and Russia through year-end will lock in a substantial market deficit through 4Q23. So far this year, OPEC+ output has fallen by 2 mb/d with overall losses tempered by sharply higher Iranian flows. Non-OPEC+ supply rose by 1.9 mb/d to a record 50.5 mb/d by August. World supply in 2023 will rise by 1.5 mb/d, with the US, Iran and Brazil top sources of growth.
Russian oil export revenues surged by $1.8 bn to $17.1 bn in August, as higher prices more than offset lower shipments. Led by a decline in product shipments, total Russian oil exports eased by 150 kb/d last month, to 7.2 mb/d, 570 kb/d below a year-ago. Shipments to China and India slumped to 3.9 mb/d from 4.7 mb/d in April and May but accounted for more than half the total volumes.
Oil refineries worldwide are grappling with challenges in meeting the demand for diesel, a crucial fuel that powers various sectors of the global economy, Bloomberg reported on September 19.
In northwest Europe, benchmark diesel futures have surged to over $1,000 a ton, marking a 10-year seasonal high. New York is witnessing its most expensive diesel prices in three decades, and a similar situation is unfolding in Asia.
Diesel-type fuels are not limited to cars and trucks; they play essential roles in farming, construction, manufacturing, trains, ships, and heating systems. While the world is transitioning away from fossil fuels, the prices of petroleum products, including diesel, continue to exert a significant influence.
Traditionally, high fuel costs encourage refineries to boost production, which increases supply and eventually lowers prices. However, this year, several factors have complicated this equation.
A scorching summer in the Northern Hemisphere led to reduced oil processing. Some new large refineries have faced delays in becoming operational, and numerous older plants have closed down, with data from the International Energy Agency showing a decline of 3.9mn barrels per day in recent years.
103 RUSSIA Country Report October 2023 www.intellinews.com