Oil supply won’t be hit by stricter price cap enforcement: IEA
G7, EU, Australia agree to impose $60 price cap on Russian seaborne crude
THE International Energy Agency does not expect moves by G7 nations to counter the evasion of price caps on Russian energy will change the supply situation for crude oil and oil products, the agency’s executive director, Fatih Birol, said.
The G7, the EU, and Australia agreed to impose a $60-per-barrel price cap on Russian seaborne crude oil and also set an upper price limit for Russian oil products to deprive Moscow of revenues for its invasion of Ukraine.
The G7 will enhance efforts to counter evasion of the caps “while avoiding spillover effects and maintaining global energy supply,” the group said on Saturday, without giving details, during its annual leaders’ meeting in Hiroshima, Japan.
The IEA, which provides analysis and input to the G7 on energy, does not see the enhanced enforcement of the price caps affecting the global oil and fuel supply, Birol told Reuters in an interview on the sidelines of the summit.
“Any significant changes in the markets as always we will reflect in our analysis, in our reports, but for the time being I don’t see a reason to make a change in our analysis,” he said.
According to Birol, the price cap reached two main objectives: it did not trigger tightness in the markets as Russian oil continued to flow but at the same time Moscow’s revenues were reduced.
“Russia did play the energy card, and it did fail. But there are some loopholes, some challenges for the better functioning of the oil price cap,” he said.
US drillers cut most oil rigs in a week since Sept. 2021: Baker Hughes US energy firms last week cut 11 oil rigs, the most in a week since September 2021, energy services firm Baker Hughes Co. said in its closely followed report on Friday.
That follows last week’s cut of 17 natural gas rigs, which was the biggest drop since June 2020.
Most of the rig reductions were in Texas where the total count dropped by nine to 355 this week.
Texas lost three rigs in the Eagle Ford shale, bringing the total in that basin down to 59, the lowest since April 2022. The state also lost four rigs in the Permian, bringing the total in that basin down to 349, the lowest since March.
China’s Russian oil imports rise in April but Saudi Arabia is top supplier China’s crude oil imports from Russia rose 8.6 percent in April from a year earlier, as larger private refiners also embarked on purchases of the discounted fuel.
Arrivals from Russia — including seaborne shipments and supplies via pipelines — totaled 7.1 million tons or 1.73 million barrels per day, according to customs data released on Saturday.
The April arrivals were well below the record of 2.26 mbpd reached in March, however, China’s overall crude oil imports last month posted a 16 percent decline from March.
Imports of Saudi oil — mostly consumed by state refiners and mega private plants — totaled 8.46 million tons or 2.06 mbpd, the data showed, slightly down from March’s 2.1 mbpd and compared with 2.17 mbpd a year earlier.
Year-to-date imports from Russia rose 26.5 percent to 32.4 million tons, outpacing second-ranked Saudi imports which grew 2.9 percent to 31.28 million tons.
Imports from Malaysia remained elevated at 4.09 million tons, not far off March’s 4.56 million tons and sharply higher than the 2.165 million tons in April of 2022.
The IEA, which provides analysis and input to the G7 on energy, does not see the enhanced enforcement of the price caps affecting the global oil and fuel supply, Birol said.