Brent moves higher amid oil supply concerns

The front-month ICE Brent contract has gained by $0.91/bbl on the day, to trade at $69.56/bbl at 09.00 GMT.

IMAGE: Oil storage tanks. Getty Images

Upward pressure:

Brent’s price has gained on the back of supply concerns in the global oil market.

The price surge follows media reports that Russia may cut diesel exports amid escalating Ukrainian drone strikes on its oil refineries.

The cutback in exports will mainly affect companies that buy diesel inside Russia and then ship it abroad, Bloomberg reported.

The Russia-Ukraine conflict, that started in 2022, has escalated further in recent weeks, with the latter carrying out successive drone strikes targeting Russian refineries, pipelines, and export hubs.

The attacks have dealt a significant blow to Russia’s energy sector – a key contributor to its economy.

“Russia is restricting diesel exports, owing to disruptions at several refineries caused by Ukrainian drone strikes, and may have to curtail crude production,” VANDA Insights’ founder Vandana Hari said.

Downward pressure:

Iraq’s Prime Minister Shia al-Sudani has announced a landmark agreement between Baghdad and the Kurdish regional government in Erbil to restart oil exports from its Kurdish region to Turkey on Saturday, Reuters reported.

Crude flows from the region were interrupted for more than two years, the report added. This news has put some downward pressure on Brent’s price today.

The resumption of crude exports from Iraqi Kurdistan “could return up to 500kb/d [500,000 b/d] to the global market,” remarked ANZ Bank’s senior commodity strategist Daniel Hynes.

By Aparupa Mazumder

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