Threats of Sanctions on Russian Oil Shocked the Markets

With the escalation of the war in Ukraine and the fall of Kherson City, oil prices crossed USD 130 and reached its highest level in ten years. Factors that hit the markets the most are as below:

• European threats of sanctions on Russian oil
• US sanctions on Russian oil
• The departure of international companies from Russia which have an indirect effect on trade

Russia threatened to shut down its gas pipeline to Europe. The prediction of rising oil prices to USD 300 has become a serious risk, and markets are witnessing crude oil prices rising every minute.

surging in basic products and fuel rates in all countries has caused general inflation in the world, and this has caused fuel prices in the United States to reach their highest level since the first Gulf War.

Due to the rapid rise in fuel prices, some refineries preferred fuel production to base oil production. this matter led to a shortage of base oil reserves. Buyers have begun to express concern about the continued upward trend in base oil prices and have come to the market to replenish stocks.

Fears of a shortage of crude oil and a rapid rise in the value of oil led to further increases in the price of base oil.

Manufacturers had already adjusted prices as raw material prices had been on the increasing slope for the past two months.

Chinese buying interest has climbed again. While import prices were under upward pressure. Supplier availability was reported to have declined as some of them sold out their March inventories and are reluctant to make new offers due to the current uncertainty over crude oil prices.

an additional charge levied on the shippers to compensate for fluctuations in the price of the ship’s fuel which has caused the shipping freight to increase again.

Due to rising shipping charges, finalizing trades has become more complex. However, Indian buyers are interested in dealing in more quantities.

In Iran, the situation of providing recycled base oil has become very tough with the approach of Nowruz and the upcoming holidays. recycled oil FOB Bandar Abbas has reached up to USD 720.

paraffin and other oil products have also boosted significantly.

The price of caustic soda is around USD 800, FOB Bandar Abbas.

it seems almost impossible to anticipate the market.

in the current situation, it is necessary to act on the trade by examining future conditions. This article is prepared by Tina Taghavi, the account manager of Infinity Galaxy. (www.infinitygalaxy.org)