High Voltage/Shutterstock Save for later Print Download Share LinkedIn Twitter A common narrative this year has been that uncertainty over the macroeconomic outlook was keeping the oil price depressed, despite healthy fundamentals. Opec and others blamed this disconnect for the slide in Brent crude prices from almost $100 per barrel in November to nearly $70/bbl in June. And as that negative sentiment shifted, Brent breached $80/bbl this week. But as the reality of the first half becomes clear, the disconnect may not have been as great as assumed. Supply in the first half proved more robust than markets anticipated, as an expected collapse in Russian production failed to materialize. Forecasts of strong demand growth for this year, meanwhile, were based on bullish assumptions for the second half, which are now in doubt. But Opec-plus cuts are working to support the market in the face of any demand sloppiness, tightening physical supply. Such factors clearly fall in the realm of fundamentals, even if forward-looking financial markets sometimes preempted or exaggerated the impact. Forecasts that Russia would see liquids production slump by well over 1 million barrels per day in 2023 have been sharply revised as export levels held up surprisingly well, and output is now expected to stay flat on last year. Russia’s post-embargo performance was supported by heavy price discounts, a huge shadow fleet, and the G7 price cap that allowed Western tankers to continue shipping Russian oil. The supply picture was further aided by a mild winter, high diesel exports from China, an increase in covert volumes from Iran and upward revisions to US production data.