Futures contracts for European Brent crude oil grow by 0.2% on Monday. to $67.87 per barrel. It used to be cheaper. Since the beginning of the year, oil prices have increased by 11.3%. Drivers must be patient while waiting for fuel price reductions.
It is unfavorable that the zloty weakened against the dollar by 0.1% on Monday. to PLN 3.55, which means that we have an additional factor increasing the price of fuel at Polish stations. According to the Autocentrum website the average price of Pb 95 in Poland is PLN 5.52 per liter, and the average price of diesel fuel in the economical version is PLN 5.83.
Returning to oil prices, activity in global financial markets will soon be limited because China, South Korea and Taiwan will celebrate the Lunar New Year from Tuesday. However, the US-Iran talks are crucial.
US-Iran talks
The two countries are scheduled to hold a second round of talks in Geneva on Tuesday on Tehran's nuclear program and ways to avoid a new military clash.
Iran is seeking a nuclear deal with the United States that will bring economic benefits to both sides. The talks will focus on investments in the energy and mining sectors, as well as the purchase of aircraft, an Iranian diplomat told Reuters on Sunday.
The United States has sent a second aircraft carrier to the region and is preparing for a possible, long-term military campaign if the talks are not successful, American officials told the website. This increases the likelihood of intervention. Iran's Revolutionary Guard has warned that in case of attacks on Iranian territory, it may retaliate against any US military base.
“Increasing tensions in Iran may lead to an increase in the price of Brent crude oil to USD 80. per barrel. Releasing the tension would reduce the price to $60. per barrel,” SEB analysts wrote in a note to clients.
On the other hand, the supply on the market is not decreasing, because it turns out that among the importers of Russian oil, China is making up for India's reduction in purchases.
China increased oil imports from Russia and decreased them from Iran
Imports of Russian oil to China increase for the third month in a row, reaching a new record in February. “Independent [chińskie] refineries purchased cargo at significantly reduced prices after India restricted purchases, according to trader and ship tracking data,” Reuters reports.
A preliminary assessment by Vortexa Analytics showed that Russian crude oil deliveries to China in February will be 2.07 million barrels per day, exceeding the January estimate of 1.7 million barrels per day. Kpler's provisional data showed February imports were 2.083 million barrels per day, down from 1.718 million barrels per day in January. Imports would therefore increase by as much as 21%.
US pressure forced New Delhi to reduce imports of Russian oil to the lowest level in two years in December. Kpler data shows that Russian crude oil imports to India are expected to decline in February to 1.159 million barrels per day. According to industry sources India plans to reduce imports of Russian raw material to 500-600 thousand tonnes. barrels per day, a significant decrease compared to last year's average of 1.7 million barrels per day.
This resulted in Russian oil prices falling to between $9 and $11 per barrel below the ICE Brent reference price for deliveries to China in January/February. It is lowest price in years for Urals oila species loaded from European ports that typically ended up in India due to shorter voyages compared to China.
As Emma Li, a China analyst at Vortexa, told Reuters, the uncertainty prevailing since January as to whether the United States will launch military attacks on Iran if negotiations on the nuclear deal do not produce the results expected by Washington has limited purchases from Chinese suppliers and traders.
“As for the kettles [import w chińskich portach — red.]Russian oil now appears more reliable as buyers fear Iranian oil supplies in the event of a military confrontation,” Li said. She added that some of the increased purchases of Russian oil came from larger, independent refineries located outside the center.
Vortexa Analytics estimated Iranian oil shipments to China – often referred to by traders as Malaysian to circumvent US sanctions – fell to 1.03 million barrels a day this month, down from 1.25 million barrels a day in January.
