Oil prices stabilized on Friday, after a meteoric rise the day before, slowed down by Western sanctions against Moscow without scope for the moment on Russian energy supplies.
Around 10:30 a.m. GMT (11:30 a.m. in Paris), the price of a barrel of Brent from the North Sea for delivery in April climbed 0.09% to 99.17 dollars. In New York, a barrel of West Texas Intermediate (WTI) for delivery in April lost 0.22% to 92.61 dollars.
“Russia’s attack on Ukraine continues unabated. However, energy prices calmed down surprisingly quickly after having experienced a spectacular increase” on Thursday, commented Carsten Fritsch, analyst at Commerzbank. The barrel of Brent, the European reference for black gold, exceeded 105 dollars on Thursday, and the American WTI briefly crossed the symbolic threshold of 100 dollars.
The invasion of Ukraine launched overnight from Wednesday to Thursday by Russian President Vladimir Putin has sparked a wave of condemnation, mainly from Westerners, who have announced new sanctions, but which “so far do not affect the energy deliveries”, specifies the analyst.
The European Union, meeting at a summit in Brussels, tightened its sanctions against Russia on Thursday evening, without however going so far as to exclude the country from the Swift international banking system. “This means that energy imports from Russia can still be paid for,” explains Carsten Fritsch.
Joe Biden, according to whom the master of the Kremlin will become “a pariah on the international scene”, has announced restrictions for the export of technological products to Russia. US sanctions also target major Russian financial institutions, as well as several large corporations and oligarchs. “Given the Kremlin’s stranglehold on European gas taps and pipelines, the scope of the sanctions is, to a large extent, limited,” confirms Stephen Brennock of PVM Energy.
Investors are now wondering how Moscow will react to the sanctions. If Russia chooses to reduce its crude deliveries, in a market where supply is already tight, prices could rise again. “In times of extreme oil price volatility, it is up to OPEC to restore calm,” recalls Stephen Brennock.
However, the Organization of Petroleum Producing Countries (OPEC) no longer seems capable of “preventing brutal price fluctuations”, continues the analyst, the cartel failing each month to meet its supply objectives. The organization, which is due to meet on Wednesday, should continue to “play a supporting role” in the black gold market, said Mr. Brennock.
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