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The embargo on Russian oil will increase its prices in the European Union

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The International Energy Agency has warned that European Union restrictions Import of crude oil and its derivatives from Russia Market prices may increase And, therefore, in the end consumer. The IEA said the ban, which will come into force on December 5 for crude oil imports and February 5 for derivatives, will increase pressure on the prices of these commodities in the market.

This will put “more pressure” on the diesel, one of the fuels with the highest price increases in recent weeks and which is “exceptionally tight”. According to him, the proposal for the G7 Put a price cap on Russian crude Procurement “may reduce stress, but numerous uncertainties and logistical challenges remain.” Russia has already warned that it will not supply oil to those who do not meet the market price.

In addition, Russia’s situation as a producer and exporter will be tested by the sanctions of the European Union, which indicates that That country’s production has fallen below 10 million barrels per day in 2023, because what the EU stops importing cannot be covered by massive purchases from China, India or Turkey. The IEA reports a A rare panorama The fall in prices was restrained by the effects of the Russian invasion of Ukraine and the slowdown in the global economy, although production cuts by OPEC and its allies (OPEC+).

Global demand for crude oil will decrease

A global economic slowdown, higher prices for oil derivatives and an appreciating dollar will reduce global crude oil demand to 1.6 million barrels per day in 2023, down from 2.1 million this year. . Global output will rise slightly by 740,000 barrels a day next year, to reach a total of 100.7 million.

agency Convergence in market trends with OPEC, which announced yesterday that global demand is forecast at 101.82 million barrels per day. It also suggests that, as the northern winter approaches, with production cuts implemented by OPEC and its allies (OPEC+), markets are striking a balance between economic slowdown and tight supply.

There was a slight increase in production in October to 101.7 million barrels per day, but the cuts are expected to reduce by 1 million barrels for the rest of the year, the document details. The report also noted that OECD countries’ inventories of crude oil and derivatives are “at their lowest level since 2004”.

There is a worldwide diesel supply problem

The IEA devotes a special chapter to Diesel supply issues, particularly in Europe and the United States, due to a variety of reasons such as reduced imports from Russia or strikes at several French refineries. payable, Diesel prices “rise to record levels in October”And they are contributing to rising inflation, he added.

The IEA reminds that The international diesel market was already in short supply before the Russian invasion of Ukraine, which have not fully recovered due to the shutdown of refining capacity during the pandemic. The deficit has been exacerbated by a decline in imports from Russia, which will be further compounded by European sanctions. However, this is the estimate of the agency New diesel distillate capacity is scheduled to enter service A total of 2.7 million barrels per day between the fourth quarter of this year and the end of 2023, which will “reduce stress.”

Meanwhile, It predicts there will be “fierce competition” for Russian diesel, in which EU countries will struggle to sell fuel to the United States, India and the Persian Gulf states rather than other traditional customers. However, if diesel prices rise too much, there will be an inevitable drop in demand and market equilibrium will be reached, he warned.

Source: lainformacion.com

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