Factors Contributing to the Surge in Oil Prices

In the international market, oil prices have experienced an uptick. At 06:45 GMT, September Brent futures saw an increase of 6 cents, reaching $79.52 per barrel, while West Texas Intermediate (WTI) crude oil also rose by 5 cents, settling at $75.40 per barrel.

According to reports from Reuters, the stability in oil prices can be attributed, in part, to developments in the United States. Notably, a lower-than-expected reduction in their oil and petroleum product inventories played a role.

Additionally, the demand situation in China has had an impact on oil prices. As the world’s largest buyer of crude oil, China’s current demand has been affected by uncertainties stemming from the country’s economic slowdown.

With an “ambiguous forecast for global demand in the coming weeks,” crude oil prices are likely to face challenges. The demand scenario presents a mixed picture, with higher demand for gasoline and aviation fuel but weaker demand for petrochemicals and diesel.

Furthermore, concerns arise about Russia’s oil supply due to indications of a reduction in oil transportation volumes following reports of declining oil production in the country. Such developments could potentially jeopardize Kremlin’s revenues from export taxes.

Over the course of four weeks in June and July, average oil shipments from Russian ports witnessed a significant decline compared to the levels seen in February. Furthermore, revenues from export duties on oil experienced a sharp drop of 29%, amounting to $43 million in the seven days leading up to July 9.

As a result of these factors, the average income over the four weeks also decreased by $4 million, reaching $49 million.