Oil Prices Jumpy But Rangebound as EU Ban Looms

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The oil price is showing no signs that oil supplies to the market are about to collapse, despite the approach of the Dec. 5 EU embargo on Russian crude imports. Brent is volatile, often swinging by several dollars a day, but has stayed within the established $88-$100 range. Traders say the volatility is a sign of tension and uncertainty. But they caution that the relatively stable range also reflects that the impact of the embargo on Russian flows remains hard to assess, given a lack of clarity about the shipping fleet's flexibility. Traders are working on the assumption that Russia will want to continue selling its oil since it is crucial for the country’s finances. One trader notes that Russia “has found ways to minimize the impact” of the EU ban and will continue selling large volumes to Asia instead of Europe using steep discounts and non-Western tankers. A “dark fleet” of tankers will continue to shuttle its crude to market – but this fleet, backed by sovereign or private insurance and financing from Russia and China, is not reporting future movements. Still, the assumption is that the bulk of Russian crude will continue flowing on these tankers.

Oil Prices, Sanctions, Oil Supply, Oil Trade, Oil Tankers, Crude Oil, Oil Products
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