First take: Russian invasion of Ukraine

“While we see energy sanctions as a big leap for Russia-dependent euro economies, Brent prices exceeding US$100/bbl imply the loss of ~1.5 million bbl/d, which is tighter relative to our base model,” said Ian Nieboer, report author and Managing Director of Enverus’ Global (International) Energy Analytics business. “This amounts to about 20% of Russian crude and refined product exports. Whether that is accurate will depend upon the coordination of Western sanctions, battlefield developments and whether President Vladimir Putin decides to wield the energy weapon himself.”

“Benchmark oil prices have incorporated a meaningful geopolitical risk premium — perhaps US$10 - US$15 — so far this year. The combination of slow-to-arrive, but still expected, US supply growth, shrinking OPEC spare capacity, and strong demand amid increasing geopolitical tensions focused on — but not exclusive to — Russia and Ukraine have driven prompt Brent toward US$100. The arrival of hot conflict last night is pushing crude prices past that mark,” Nieboer said.

Read the article online at: https://www.worldpipelines.com/business-news/25022022/first-take-russian-invasion-of-ukraine/