Brent crude oil prices recently reached $١٠٤ per barrel, while West Texas Intermediate (WTI) crude oil was traded around $٩٢. These developments occur as the global oil market is simultaneously influenced by expectations regarding supply and geopolitical developments.
The impact of Russian diesel supply on oil prices
One of the key factors affecting the decrease in oil prices is the potential increase in Russian diesel supply to global markets. Expectations regarding the easing of Russian fuel exports could change the supply outlook and reduce pressure on prices. However, the realization of the anticipated supply and the timing of shipments entering the market are of great importance. Therefore, one cannot solely rely on the announcement of readiness to increase exports to speak of the complete realization of this supply or the continuation of falling oil prices.
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Middle Eastern tensions and their effects on the oil market
On the other hand, concerns about disruptions in Middle Eastern oil supply continue to impact the oil market. Security developments in this region and the risk of disruptions in energy transmission routes could increase transportation and insurance costs for tankers and affect traders' expectations. Thus, while the potential increase in Russian supply is presented as a bearish factor in the market, geopolitical risks may prevent further declines in oil prices.
The global oil market is currently caught between two opposing factors. On one hand, the potential increase in diesel supply from Russia could put pressure on prices, while on the other hand, escalating regional tensions and potential disruptions in oil transmission may change the market's direction. Therefore, the price of oil reaching the $١٠٤ range alone cannot be seen as a sign of the beginning of a sustainable downward trend. Instead, the realization of Russian supply and security developments in the Middle East will be important determining factors for the next direction of oil prices.
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