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Increase Crude Oil Production, UAE Tells OPEC Plus

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Brent crude oil - Investors King

The global Oil Market has become stretched to a point where only a few oil producers are giving their best to replace Russia’s heavy supply that was banned by the United States and shunned by others.

However, there seems to be a glimmer of hope for the world as the United Arab Emirates has suggested that it may be coming to the rescue.

According to Yousef Al Otaiba, the UAE’s ambassador to Washington, the UAE wants to increase oil production and will encourage the Organization of the Petroleum Exporting Countries (OPEC) coalition to ramp up the supply of crude.

Yousef disclosed this to CNN in a statement on Wednesday, 9th March.

Investors King recalls that at the ongoing CERAWeek, OPEC Secretary-General, Mohammed Sanusi Barkindo, had declared that it was impossible for OPEC to replace Russia’s 7 million barrels of oil per day.

However, following Otaiba’s statement from Washington, oil prices are said to have dropped a little – with US oil falling 12% to less than $109 a barrel. Brent crude, the global benchmark, fell 13% to $111 a barrel. This also marked one of the steepest one-day decline in nearly two years.

With this feat alone, if the UAE is able to convince partners to turn on the taps of their crude, it would mark a turnaround for the syndicate and the rising price of oil globally.

This request also comes on the heels of a meeting last week with allied oil producers — a group known as OPEC+ — where they agreed to stick with a plan of gradually adding oil to the market, defying pressure from developed economies to do more to ease prices. The OPEC+ had described the oil markets as well-balanced even though oil prices have shot up in the past weeks.

However, last Wednesday, OPEC+ revealed in a statement that it would increase output by 400,000 barrels per day — a small fraction of Russia’s 10 million barrels per day crude oil production – but in April.

Following a number of sanctions on Russia with the most recent one being on its oil exports, the prices of oil and gas products gave surged to alarming rates and it’s influencing geopolitical tension globally. Experts project that Brent crude futures may surge to $240 a barrel if Western countries impose wider sanctions on Russian oil exports.

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Crude Oil

Oil Prices Continue to Slide: Drops Over 1% Amid Surging U.S. Stockpiles

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Amidst growing concerns over surging U.S. stockpiles and indications of static output policies from major oil-producing nations, oil prices declined for a second consecutive day by 1% on Wednesday.

Brent crude oil, against which the Nigerian oil price is measured, shed 97 cents or 1.12% to $85.28 per barrel.

Similarly, U.S. West Texas Intermediate (WTI) crude slumped by 93 cents or a 1.14% fall to close at $80.69.

The recent downtrend in oil prices comes after they reached their highest level since October last week.

However, ongoing concerns regarding burgeoning U.S. crude inventories and uncertainties surrounding potential inaction by the OPEC+ group in their forthcoming technical meeting have exacerbated the downward momentum.

Market analysts attribute the decline to expectations of minimal adjustments to oil output policies by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known collectively as OPEC+, until a full ministerial meeting scheduled for June.

In addition to concerns about excess supply, the market’s attention is also focused on the impending release of official government data on U.S. crude inventories, scheduled for Wednesday at 10:30 a.m. EDT (1430 GMT).

Analysts are keenly observing OPEC members for any signals of deviation from their production quotas, suggesting further volatility may lie ahead in the oil market.

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Brent Crude Approaches $86 Following Moscow Attacks

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Brent crude oil - Investors King

Amid escalating geopolitical tensions following the devastating terrorist attacks in Moscow, global oil markets rose with Brent crude oil hitting a $86 price level.

The tragic events in the Russian capital, which claimed the lives of over 130 innocent civilians, sent shockwaves through international communities and rattled energy markets already grappling with supply uncertainties.

Speculation surrounding the attacks, claimed by the Islamic State but with hints of potential Ukrainian involvement from Russian President Vladimir Putin, intensified concerns about potential disruptions to oil supplies.

Also, ongoing drone strikes by Ukraine targeting Russian infrastructure further exacerbated worries about the stability of crude oil production and refining capabilities in the region.

The mounting geopolitical unrest in key oil-producing regions has injected a sense of urgency into the market, with investors closely monitoring developments for potential impacts on global supply and demand dynamics.

Despite recent fluctuations, crude oil is poised for a third consecutive monthly gain, buoyed by efforts from the OPEC+ alliance to maintain production cuts and bolstered by tightening US sanctions on Russian energy exports.

The bullish sentiment is further supported by positive commentary on the broader commodities outlook, with central banks signaling potential interest rate reductions to stimulate economic growth, thus underpinning industrial and consumer demand for raw materials.

Analysts remain cautiously optimistic about the trajectory of oil prices, citing a delicate balance between supply risks and supportive macroeconomic factors amidst the backdrop of geopolitical turmoil.

As Brent crude inches closer to the $86 threshold, market participants brace for continued volatility amid unfolding geopolitical developments.

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Indian Refiners Shun Russian Crude Carried by Sovcomflot Tankers Amidst US Sanctions

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Indian refiners have taken a bold stance by refusing to accept Russian crude oil carried on PJSC Sovcomflot tankers, citing stringent US sanctions.

This decision marks a significant shift in India’s energy strategy and underscores the profound impact of global politics on the oil trade.

The move comes in the wake of heightened scrutiny on Sovcomflot tankers following sanctions imposed by the US Treasury’s Office of Foreign Assets Control.

Designating Sovcomflot and identifying specific crude oil tankers, the US has intensified its efforts to clamp down on entities linked to Russia, particularly in the aftermath of the Ukraine invasion.

Indian Oil Corp., Bharat Petroleum Corp., Hindustan Petroleum Corp., Mangalore Refinery & Petrochemicals Ltd., and Nayara Energy Ltd. have all halted the acceptance of cargoes carried on Sovcomflot vessels.

This unified action underscores the severity of the situation, with refiners diligently scrutinizing tanker ownership to ensure compliance with sanctions.

The repercussions of this decision are reverberating throughout the oil market, leading to disruptions in the supply chain and altering trade dynamics.

With fewer tankers available to transport Russian crude, the pricing landscape has undergone a significant shift, with discounts narrowing to compensate for higher freight costs.

Despite the challenges posed by sanctions and supply chain disruptions, India remains a key player in the global oil market.

However, the decision to shun Russian crude on Sovcomflot tankers reflects a strategic recalibration in response to evolving geopolitical realities, underscoring the complex interplay between politics and energy security on the world stage.

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