Daily Times

Crude oil prices dropped on Thursday amid reports that Western sanctions against Iranian oil exports may be eased. As of 1350 hours GMT, Brent, the international benchmark for two-thirds of the world’s oil, shed $1.33 (-1.18 percent) to reach $111.60 a barrel. The benchmark has gained $13.69 a barrel during the last four days. The West Texas Intermediate (WTI), the main oil benchmark for North America, reached $108.82 a barrel, down by $1.78 (-1.61 percent). The contract has gained around $17.23 a barrel during the last four days. The price for Opec Basket was recorded at $103.89 a barrel with an increase of 4.71 percent, Arab Light was available at $111.88 a barrel with an increase of 5.68 percent and the price of Russian Sokol jumped to $104.03 a barrel with 5.42 percent increase. The officials from Opec+ countries on Wednesday agreed to continue feeding a modest amount of additional oil, 400,000 barrels per day, into an increasingly tight market. Despite its increased targets, actual output from Opec+ has not kept pace as some members struggle with capacity constraints, and this has been a factor underpinning prices. Opec+ missed its production target by 790,000 bpd in December and again failed to meet the target in January as the group lifted production to only 210,000 additional barrels per day for the month.

On the other hand, despite the fact that the sanctions against Russia carve out energy and energy payments out of the SWIFT restrictions and bans, Russian producers can’t sell their cargoes in tenders because no one is bidding, while many refiners – especially in Europe – are shunning Russian crude and scrambling for alternatives. Most European majors are not touching Russian oil, and only a few European refiners and trading firms are still in the market, but spiking freight rates and war insurance premiums are significantly complicating transactions.