▲International oil prices soar at the beginning of 2022
After the United States and its allies imposed sanctions on Russia over the Russia-Ukraine conflict, international crude oil prices soared for a week and reached a high again. At the opening of Monday, U.S. and Brent crude oil futures rose by more than 10%. Brent crude oil was once close to US$140, and WTI crude oil futures once exceeded US$130/barrel, both hitting new highs since 2008.
Oil prices continue to soar, and “Stock God” Buffett takes action again! It is reported that a new document from the U.S. Securities and Exchange Commission shows that Buffett’s Berkshire Hathaway has increased its holdings in Occidental Petroleum Company, and currently holds 113 million shares worth US$5.3 billion.
Affected by the sudden rise in international oil prices and news of Buffett’s large-scale buying, the A-share oil and gas sector continued to rise, with most oil stocks rising.
According to Reuters, oil prices surged to their highest levels since 2008 due to possible delays in the return of Iranian crude to global markets and as the United States and European allies consider bans on imports of Russian oil.
Talks between Iran and world powers to revive the 2015 nuclear deal were thrown into uncertainty on Sunday after Russia demanded assurances from the United States that sanctions it faces would not harm its trade with Iran.
In the first few minutes of Sunday trading, both benchmarks rose to their highest levels since July 2008, with Brent crude at $139.13 a barrel and WTI at $130.50.
Data show that Russia is the world’s major crude oil producer and exporter, and is also the world’s largest natural gas exporter. Its natural gas reserves rank first in the world. The EU is the world’s largest crude oil importer, and more than 80% of its crude oil consumption relies on imports. Russia is the EU’s largest single source of crude oil, providing about 27% of the EU’s crude oil imports.
Crude oil may hit US$185 per barrel, many oil majors withdraw from Russia
International oil prices are approaching US$120 per barrel, mainly due to the turmoil in important oil-producing countries. Analysts at JPMorgan Chase said that if Russia’s supply continues to be blocked, Brent crude oil may reach US$185 per barrel by the end of the year. After the conflict between Ukraine and Russia escalated, the European and American camps continued to increase sanctions on Russia, and sanctions in the energy field were also launched. So far, dozens of oil companies, including BP, Shell, Exxon Mobil, etc., have stopped their operations in Russia or announced plans to abandon their Russian operations.
ExxonMobil: It has begun formulating steps to exit the “Sakhalin 1” project and halt new investments. The company values Russia’s oil and gas business at more than $4 billion.
Shell: Announced that it will exit joint ventures with Gazprom and related entities, including its 27.5% stake in the Sakhalin-2 LNG facility, each of Salym Petroleum Development Company and Gydan Energy Company 50% of the shares. As of the end of 2021, Shell had approximately US$3 billion in non-current assets in the above-mentioned joint ventures in Russia.
Shell also plans to end its involvement in the Nord Stream 2 pipeline project. “Nord Stream 2” is a cooperation project between Gazprom and five European companies. It is a natural gas pipeline from Russia to Germany via the Baltic Sea. After completion, it is expected to transport 55 billion cubic meters of natural gas to the EU every year. The total project cost is approximately 9.5 billion euros.
BP: It will exit its approximately 19.75% stake in Rosneft. This exit may cause it to face a loss of US$25 billion.
Equinor, the Norwegian state oil company, will begin divesting its joint venture in Russia, where Equinor produces 25,000 barrels of oil equivalent per day.
Total Energies: It will no longer fund new projects in Russia, but it has not withdrawn investment from the country. Total holds a 19% stake in Russian natural gas producer Novatek.
…
Agency analysis shows that although sanctions have not yet targeted Russia’s energy sector, many private energy companies have begun to “cut off” their shares one after another under multiple pressures. This means that Russian crude oil exports may face Western restrictions, and market inventories are at low levels. Next, the shortage of crude oil will further increase.
Whether it is the withdrawal of oil giants, the force majeure of chemical industry leaders, the increasing cost of transportation, or the artificial sales control in the domestic market, they have all combined to push the chemical market to continue to rise and it is difficult to fall back. Judging from the current situation, , geopolitical conflicts seem to be still escalating, the trend of oil prices is difficult to see a “ceiling”, and the high prices of the chemical industry chain are difficult to reverse quickly.
</p
