
<h2 class="wp-block-heading" id="h-topline">TOPLINE</h2>



<p>Oil prices briefly surged Friday morning in the wake of Israel’s reported airstrike on Iran, and then quickly dropped following Iran state media’s apparent downplaying of those strikes, as conflict in the Middle East continues to leave behind lingering effects on already climbing oil and gasoline prices.</p>



<h2 class="wp-block-heading" id="h-key-facts">KEY FACTS</h2>



<p>Brent Crude, an international benchmark, shot up nearly 2% Friday morning to a peak just under $88 per barrel, though the benchmark has since dropped to roughly $87.50, representing a marginal 0.5% uptick on the day.</p>



<p>National benchmark West Texas Intermediate also increased by roughly 2% Friday morning, following reports of an Israeli airstrike, though like the Brent, the WTI has also tapered off, dropping just above $83.50 per barrel.</p>



<p>AAA spokesperson Andrew Gross speculated international conflict could lead to instability in the oil market, saying in a&nbsp;<a href="https://gasprices.aaa.com/is-the-recent-climb-in-the-price-of-gas-about-to-stall/" rel="noreferrer noopener" target="_blank">statement</a>&nbsp;on Thursday the “situation overseas with the war in the Middle East and Ukraine has the oil market on edge.”</p>



<p>While increases in the price of oil typically come with price hikes at the pump, analysts expect those effects on gasoline prices to be delayed, and multiple other factors could help swing the price of gas down from its $3.69 national average this week—its highest point since October, according to GasBuddy.</p>



<p>Patrick De Haan, head petroleum analyst for GasBuddy,&nbsp;<a href="https://twitter.com/GasBuddyGuy/status/1781303050570781081" rel="noreferrer noopener" target="_blank">said</a>&nbsp;he expects gas prices to hit $3.70 per gallon in the near future, though the return of U.S. oil refineries from scheduled maintenance and Iran’s state media’s apparent&nbsp;<a href="https://www.forbes.com/sites/jamesfarrell/2024/04/19/iran-downplays-israeli-strikes-and-may-not-launch-large-scale-retaliation/?sh=47337ea3f5d9">downplaying</a>&nbsp;of Israel’s attack, he said there’s “potential we’re nearing an end to the rise” in prices at the pump.</p>



<h2 class="wp-block-heading" id="h-contra">CONTRA</h2>



<p>Another positive sign for gas prices has been an increase in crude oil inventories, which shot up this week by 2.7 million barrels, to approximately 460 million barrels, though it remains 6 million barrels below its level this time last year, according to the Energy Information Administration. Andrew Gross also estimated gas prices could plateau as U.S. demand hits a typical low ahead of Memorial Day. Gasoline demand in the U.S. declined narrowly from 8.84 million barrels in the week ending April 5 to 8.81 million barrels last week, according to&nbsp;<a href="https://www.eia.gov/petroleum/weekly/gasoline.php" rel="noreferrer noopener" target="_blank">EIA data</a>, and is slightly below where it had been last April. Gross expects the national average gas price “may waffle a bit with small increases, some flat days, and even some price dips” as a result.</p>



<h2 class="wp-block-heading" id="h-key-background">KEY BACKGROUND</h2>



<p>Israel&#8217;s military early on Friday&nbsp;<a href="https://www.forbes.com/sites/siladityaray/2024/04/19/israeli-missiles-reportedly-strike-airbase-in-central-iran/?sh=43f5240f120f">reportedly</a>&nbsp;launched limited airstrikes in Iran, unnamed officials told&nbsp;<a href="https://www.nytimes.com/live/2024/04/18/world/israel-iran-gaza-war-news/blasts-are-reported-near-the-iranian-city-of-isfahan?smid=url-share" rel="noreferrer noopener" target="_blank">multiple</a>&nbsp;<a href="https://abcnews.go.com/International/live-updates/israel-gaza-hamas-war/?id=108860743" rel="noreferrer noopener" target="_blank">outlets</a>. The reported strikes came several days after Iran’s unprecedented drone and ballistic missile strike on Israel days earlier, which Israeli officials said caused only minor damage. Iran’s attack itself was in retaliation for Israel’s airstrike earlier this month on an Iranian embassy in Syria, which killed at least 16 people, including two senior military leaders. Iranian state TV dismissed Friday’s strike, blasting it as “Israeli and American media propaganda.” Israel has not officially claimed responsibility for any strikes on Iran. Tensions between Iran and Israel have boiled over in recent months in the wake of Israel’s invasion of Gaza, which has left over 33,000 Palestinians dead, according to the Hamas-run Gaza Health Ministry. Israel estimates another 1,200 people were killed in Hamas’ Oct. 7 attack on southern Israel. Earlier this week, Iranian President Ebrahim Raisi&nbsp;<a href="https://www.forbes.com/sites/siladityaray/2024/04/17/iran-threatens-fierce-and-severe-response-if-israel-launches-tinest-invasion-in-response-to-weekend-attack/?sh=7eace4a1083b">threatened</a>&nbsp;“fierce and severe” retaliation for the “tiniest invasion” by Israel, though world leaders have urged both sides to de-escalate the situation.</p>


Oil pump with candle stick graph chart in the background. World Oil Industry

Oil Prices Spike—And Fall—As Iran Downplays Israel’s Reported Airstrikes: Here’s How That Could Affect Gas Prices


<h2 class="wp-block-heading" id="h-topline"><a href="https://policies.google.com/privacy" target="_blank" rel="noreferrer noopener"></a>TOPLINE</h2>



<p>A drought in Spain, record-high temperatures and a pause in Turkish exports have driven prices of Spanish olive oil to a record high of $8,900 per ton this month, and there&#8217;s no clear indication as to when they&#8217;ll fall.</p>



<p>Extreme hot weather and persistent drought conditions have dealt a severe blow to olive oil&nbsp;&#8230; [+]<small>ANADOLU AGENCY VIA GETTY IMAGES</small></p>



<h2 class="wp-block-heading" id="h-key-facts">KEY FACTS</h2>



<p>&#8220;Extremely dry weather in much of the Mediterranean&#8221; has been blamed for the skyrocketing prices of olive oil—up 130% from last year—by the&nbsp;<a href="https://apps.fas.usda.gov/psdonline/circulars/oilseeds.pdf" target="_blank" rel="noreferrer noopener">U.S. Department of Agriculture</a>, which warns the only thing that could bring them down in the coming months would be improved growing conditions.</p>



<p>The Catalonia region of Spain&nbsp;<a href="https://www.euronews.com/green/2023/08/09/we-have-never-seen-it-so-low-spain-introduces-water-restrictions-as-reservoirs-run-dry#:~:text=Drought%20is%20leaving%20reservoirs%20empty&amp;text=Spain%20registered%20the%20driest%20start,Andalusia%20being%20the%20most%20affected." target="_blank" rel="noreferrer noopener">declared</a>&nbsp;a drought emergency in 24 municipalities in August after 30 months of little rain, and the drought has dried up reservoirs, parched olive groves and led to restrictions on water use across the country, per&nbsp;<a href="https://earthobservatory.nasa.gov/images/151366/spain-browned-by-drought" target="_blank" rel="noreferrer noopener">NASA</a>.</p>



<p>The lack of rain has coincided with the nation’s third-hottest summer on record: The Spanish meteorological agency&nbsp;<a href="https://www.aemet.es/en/noticias/2023/09/avance_verano_2023" target="_blank" rel="noreferrer noopener">says</a>&nbsp;four heat waves were recorded this summer, temperatures were 2.3°F (1.3°C) higher than normal on average and meteorologists are predicting a warmer-than-normal autumn.</p>



<p>Italy and Greece, which also grow a significant portion of the world’s olives, have also seen hot, dry seasons, with Italy recording&nbsp;<a href="https://www.forbes.com/sites/anafaguy/2023/08/07/extreme-heat-in-southern-italy-increased-july-death-rate-officials-say/?sh=4ab63d9c2664">temperatures</a>&nbsp;over 40°C (104°F), and Greece, where major tourist attractions&nbsp;<a href="https://www.forbes.com/sites/tylerroush/2023/07/15/europes-dangerous-heat-wave-greece-closes-acropolis-as-warnings-issued-across-italy-spain-and-germany/?sh=7b774c7e39c0">were closed</a>&nbsp;due to the heat, notching temperatures just as high.</p>



<p>Spain, the world’s largest producer and exporter of olive oil, made 50% less oil in its most recent season, CNBC&nbsp;<a href="https://www.cnbc.com/2023/09/19/olive-oil-prices-surge-over-100percent-leading-to-cooking-oil-thefts.html" target="_blank" rel="noreferrer noopener">reported</a>, and prices have been further impacted by Turkey&#8217;s decision&nbsp;<a href="https://apps.fas.usda.gov/psdonline/circulars/oilseeds.pdf" target="_blank" rel="noreferrer noopener">to suspend</a>&nbsp;bulk oil exports until at least November 1 in a move meant to ensure domestic supplies and alleviate price pressure.</p>



<p>Before this August, the previous record price for olive oil was set at $6,242 per ton in 1996, according to the USDA.</p>



<p>Picture shows healthy olives grown using an irrigation system developed by researchers of the&nbsp;&#8230; [+]<small>AFP VIA GETTY IMAGES</small></p>



<h2 class="wp-block-heading" id="h-big-number">BIG NUMBER</h2>



<p>610,000 tons. That&#8217;s how much olive oil Spain produced in the recent season, compared to a usual yield of 1.3 to 1.5 million tons.</p>



<h2 class="wp-block-heading" id="h-key-background">KEY BACKGROUND</h2>



<p>The global olive oil market was valued at $14.2 billion in 2022 and is projected to grow to $18.4 billion by 2030, Fortune Business Insights&nbsp;<a href="https://www.fortunebusinessinsights.com/industry-reports/olive-oil-market-101455" target="_blank" rel="noreferrer noopener">predicts</a>. Spain manufactures almost half of the world&#8217;s olive oil,&nbsp;<a href="https://www.internationaloliveoil.org/the-world-of-olive-oil/" target="_blank" rel="noreferrer noopener">followed by</a>&nbsp;producers in Italy, Greece, Portugal, Tunisia, Turkey and Morocco. Greeks are the largest olive oil consumer per capita,&nbsp;<a href="https://www.aboutoliveoil.org/olive-oil-production-by-country" target="_blank" rel="noreferrer noopener">according to&nbsp;</a>the North American Olive Oil Association, followed by Spain and Italy. Greeks consume about 20 liters of olive oil per person each year, compared to about 1 liter per American. The size of the United States compared to other nations, however—only about 10.6 million people live in Greece compared to 331 million in the U.S.—makes the nation a major consumer: The&nbsp;<a href="https://apps.fas.usda.gov/psdonline/circulars/oilseeds.pdf" target="_blank" rel="noreferrer noopener">USDA</a>&nbsp;said American imports usually make up about 30% of the global olive oil trade, and that number is expected to rise to between 35% and 37% this year.</p>



<h2 class="wp-block-heading" id="h-surprising-fact">SURPRISING FACT</h2>



<p>A theft of about 50,000 liters of extra virgin olive oil left one of the nation&#8217;s family-owned mills, Marin Serrano El Lagar, out about $450,000, local news&nbsp;<a href="https://www.elmundo.es/andalucia/2023/08/31/64f0462efc6c8312768b459c.html" target="_blank" rel="noreferrer noopener">reported</a>. No arrests have been made in the theft and a spokesperson for the Civil Guard told&nbsp;<em>El Mundo</em>&nbsp;that stealing in bulk, rather than bottles, makes tracking the oil particularly hard. Just two weeks before that, another 6,000 liters of extra virgin olive oil—$53,500 worth—<a href="https://www.elmundo.es/andalucia/2023/08/23/64e5e1bdfc6c8303668b4591.html" target="_blank" rel="noreferrer noopener">was stolen</a>&nbsp;from the Terraverne oil mill.</p>



<h2 class="wp-block-heading" id="h-tangent">TANGENT</h2>



<p>Olive oil isn&#8217;t the only commodity to have seen cost jumps this summer,&nbsp;<em>Business Insider</em>&nbsp;<a href="https://markets.businessinsider.com/news/commodities/foodflation-cocoa-surges-12-year-high-orange-juice-hit-record-2023-7?_gl=1*1147odj*_ga*MTgyMjM0ODk0OC4xNjg2NzU2MDU1*_ga_E21CV80ZCZ*MTY5NTIxNjY5My4yNS4xLjE2OTUyMTY4OTIuMjMuMC4w" target="_blank" rel="noreferrer noopener">reported</a>. Cocoa, orange juice, wheat and soybeans all surged this summer as heavy rainfall and disease impacted West Africa&#8217;s cocoa supply, a crop disease hit citrus plants in Florida and Brazil and Russia pulled out of the deal allowing the export of grain from Ukraine. Soybean prices&nbsp;<a href="https://www.reuters.com/article/global-grains-idAFL1N38128J" target="_blank" rel="noreferrer noopener">also soared</a>&nbsp;this summer after the USDA reported much lower-than-expected soy plantings.</p>



<h2 class="wp-block-heading" id="h-further-reading">FURTHER READING</h2>



<p><a href="https://www.forbes.com/sites/maryroeloffs/2023/08/23/india-to-ban-sugar-exports-in-addition-to-rice-as-corn-soybeans-and-more-crops-falter-in-extreme-heat-and-drought/?sh=56d252986d6c">India To Ban Sugar Exports In Addition To Rice—As Corn, Soybeans And More Crops Falter In Extreme Heat And Drought</a>&nbsp;(<em>Forbes</em>)</p>



<p><a href="https://www.forbes.com/sites/maryroeloffs/2023/08/21/out-with-shrimp-in-with-jellyfish-seafood-industry-facing-potential-overhaul-due-to-climate-change/?sh=2c38609723bb">Out With Shrimp, In With Jellyfish? Seafood Industry Facing Potential Overhaul Due To Climate Change</a>&nbsp;(<em>Forbes</em>)</p>



<p><a href="https://www.forbes.com/sites/chloesorvino/2022/06/26/heres-the-latest-data-on-climate-and-food-and-its-not-good/?sh=1229c7592e52">Here’s The Latest Data On Climate And Food And It’s Not Good</a>&nbsp;(<em>Forbes</em>)</p>



<p><a href="https://www.forbes.com/sites/chloesorvino/2022/09/02/us-farmers-struggle-through-drought-to-bring-food-to-the-table-but-face-more-challenges-ahead/?sh=7119cadcfc08">U.S. Farmers Struggle Through Drought To Bring Food To The Table But Face More Challenges Ahead</a> (<em>Forbes</em>)</p>


Olive Oil Prices Jump 50%—And Climate Change Might Be Why


<h2 class="wp-block-heading" id="h-topline">TOPLINE</h2>



<p>Global oil demand reached record levels in June and is poised to peak again in August, the International Energy Agency&nbsp;<a href="https://www.iea.org/reports/oil-market-report-august-2023" target="_blank" rel="noreferrer noopener">said</a>&nbsp;on Friday, warning that price hikes could be on the horizon as slowing outputs from major suppliers like Saudi Arabia tighten supply.</p>



<h2 class="wp-block-heading" id="h-key-facts">KEY FACTS</h2>



<p>World oil demand hit a record 103 million barrels a day in June, the IEA said.</p>



<p>The agency said demand could rise further in August and demand for 2023 as a whole is expected to reach 102.2 million barrels a day.</p>



<p>The figure, an increase of around 2.2 million barrels a day from the year before, would mark the highest ever annual level, the agency said.</p>



<p>China is responsible for the lion’s share of this growth, accounting for more than 70% of the uptick, the IEA said, adding that demand there was “stronger than expected” and reached new highs “despite persistent concerns over the health of the economy.”</p>



<p>Strong summer air travel and the increased use of oil in power generation also contributed to increased demand, the IEA said.</p>



<p>The IEA forecast continued, albeit slower, growth for oil demand in 2024, pointing to “lacklustre economic conditions,” new electric vehicles and the “post-pandemic rebound running out of steam.”</p>



<h2 class="wp-block-heading" id="h-what-to-watch-for">WHAT TO WATCH FOR</h2>



<p>Oil prices could be poised to rise even higher in coming months as major producers, particularly Saudi Arabia, move to constrict supplies. Previous production cuts from the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, have helped&nbsp;<a href="https://www.reuters.com/markets/commodities/oil-benchmark-brents-price-structure-reflects-tighter-market-2023-08-10/" target="_blank" rel="noreferrer noopener">drive</a>&nbsp;oil prices up and the IEA warns the bloc’s targets, if maintained, pose “a risk of driving prices still higher.”</p>



<h2 class="wp-block-heading" id="h-tangent">TANGENT</h2>



<p>The IEA said Russia’s oil exports breached the price cap put in place by the Group of Seven (G7) nations. Prices reached an average of $64.41 a barrel last month, the IEA said, above the $60 a barrel cap the group set. The cap was designed to limit Moscow’s ability to fund its war in Ukraine while simultaneously averting chaos in global energy markets by keeping its oil on the markets and it limits how companies can move Russian oil by cutting access to things like insurance and other key services should they pay more than this threshold. The rule has changed the map of global oil supply chains and exports from Russia, a major producer, away from Europe and towards Asia. The IEA said crude exports to India and China accounted for 80% of Russia’s shipments.</p>



<p>Forbes Daily: Get our best stories, exclusive reporting and essential analysis of the day’s news in your inbox every weekday.Sign Up</p>



<p>By signing up, you accept and agree to our&nbsp;<a href="https://www.forbes.com/terms-and-conditions" target="_blank" rel="noreferrer noopener">Terms of Service</a>&nbsp;(including the class action waiver and arbitration provisions), and&nbsp;<a href="https://www.forbes.com/privacy" target="_blank" rel="noreferrer noopener">Privacy Statement</a>.</p>



<h2 class="wp-block-heading" id="h-key-background">KEY BACKGROUND</h2>



<p>While oil demand dropped during the Covid-19 pandemic and as the world shifted to greener forms of energy, supplies have also tightened from output cuts and disruption from Russia’s invasion of Ukraine. The recent squeeze, spearheaded by Saudi Arabia’s voluntary production cuts, have helped push prices up and Brent crude, a key international benchmark, was trading at $88 dollars a barrel on Thursday, a six month&nbsp;<a href="https://www.reuters.com/markets/commodities/iea-lowers-2024-oil-demand-growth-forecast-2023-08-11/" target="_blank" rel="noreferrer noopener">high</a>.</p>



<h2 class="wp-block-heading" id="h-further-reading">FURTHER READING</h2>



<p><a href="https://www.forbes.com/sites/roberthart/2023/07/19/electricity-demand-slows-in-2023-as-economic-downturn-and-energy-crisis-weighs-on-growth-iea-says/">Electricity Demand Slows In 2023 As Economic Downturn And Energy Crisis Weighs On Growth, IEA Says</a>&nbsp;(Forbes)</p>



<p><a href="https://www.bloomberg.com/news/articles/2023-08-11/global-oil-demand-hits-record-and-prices-may-climb-iea-says" target="_blank" rel="noreferrer noopener">Global Oil Demand Hits Record and Prices May Climb, IEA Says</a>&nbsp;(Bloomberg)</p>



<p><a href="https://www.reuters.com/markets/commodities/iea-lowers-2024-oil-demand-growth-forecast-2023-08-11/" target="_blank" rel="noreferrer noopener">IEA sees slower 2024 oil demand growth, tightening market this year</a>&nbsp;(Reuters)</p>



<p><a href="https://www.bbc.com/future/article/20230726-an-experts-guide-to-peak-oil-and-what-it-really-means" target="_blank" rel="noreferrer noopener">Is the decline of oil in sight?</a> (BBC)<a href="https://www.forbes.com/sites/roberthart/"></a></p>


Oil Prices Poised To Soar As Global Demand Hits Record High, IEA Says


<h2 class="wp-block-heading" id="h-topline">TOPLINE</h2>



<p>Ukraine’s suspension of Russian oil to Eastern Europe sent oil prices soaring Tuesday morning, after Russian oil company Transneft announced Ukraine had not received transfer fees for the oil for nearly a week due to Western sanctions, renewing fears of supply shortages.</p>



<h2 class="wp-block-heading">KEY FACTS</h2>



<p><a href="https://www.marketwatch.com/investing/future/brn00?countrycode=uk" target="_blank" rel="noreferrer noopener">Brent Crude Oil</a>&nbsp;shot up 1.13% Tuesday morning, hitting $97.78 per barrel, while&nbsp;<a href="https://www.cnbc.com/quotes/@CL.1" target="_blank" rel="noreferrer noopener">West Texas Intermediate</a>&nbsp;increased 1.3%, to $92.06, following the announcement from&nbsp;<a href="https://www.forbes.com/companies/transneft/?sh=670e78d23771">Transneft</a>, Russia’s pipeline monopoly.</p>



<p>Transneft wrote in a statement obtained by <a href="https://www.reuters.com/business/energy/russia-suspends-oil-exports-via-southern-leg-druzhba-pipeline-due-transit-2022-08-09/" target="_blank" rel="noreferrer noopener">Reuters</a> that it had paid a transfer fee to Ukraine, but the money was returned because of European Union sanctions against Russia for its ongoing invasion of Ukraine.</p>



<p>Ukraine’s decision to halt Russian oil affects the southern leg of the Druzhba pipeline, which feeds Hungary, Slovakia and the Czech Republic, according to Transneft.</p>



<p><a href="https://www.worldometers.info/oil/hungary-oil/" target="_blank" rel="noreferrer noopener">Hungary</a>’s oil reserves now sit at 28.6 million barrels, leaving it with enough oil for one year of consumption, while the&nbsp;<a href="https://www.worldometers.info/oil/czechia-oil/#:~:text=as%20of%202016).-,Oil%20Imports,barrels%20per%20day%20in%202016)." target="_blank" rel="noreferrer noopener">Czech Republic</a>&nbsp;has 15 million barrels (less than a year) and&nbsp;<a href="https://www.worldometers.info/oil/slovakia-oil/#:~:text=as%20of%202016).-,Oil%20Imports,barrels%20per%20day%20in%202016)." target="_blank" rel="noreferrer noopener">Slovakia</a>&nbsp;has 9 million barrels in reserves (less than a year), according to the site Worldometer.</p>



<p>The Czech Republic imported 3,417 kilotons (2.2 million barrels) of Russian oil in 2021, more than it imported from any other country, <a href="https://www.mpo.cz/en/energy/statistics/oil-and-oil-products/statistics-of-crude-oil-imports-to-the-czech-republic--260434/#:~:text=In%202021%2C%20crude%20oil%20was,oil%20pipelines%2C%20partly%20by%20rail." target="_blank" rel="noreferrer noopener">according to</a> Czech Ministry of Industry and Trade.</p>



<h2 class="wp-block-heading">KEY BACKGROUND</h2>



<p>The news came amid a steady two-month decline in gas prices, which had momentarily assuaged fears of a pending recession in Europe (Brent crude prices had been declining since it hit a $123.58 peak on June 22). The European Union has also been embracing a potential energy shortage as Russia threatens to cut off oil and gas supplies to the West. Speaking to member countries in a conference last month, European Union Commission President Ursula von der Leyen pushed for a&nbsp;<a href="https://www.forbes.com/sites/brianbushard/2022/07/20/russia-is-blackmailing-us-eu-plans-gas-reduction-as-putin-threatens-shutoff/?sh=2c8055492534">15% cut</a>&nbsp;in gas use through March, in response to a shutoff of Russian gas — which she called a “likely scenario.” The plea came a week after Russia&nbsp;<a href="https://www.forbes.com/sites/siladityaray/2022/07/11/russia-shuts-down-gas-pipeline-for-maintenance-europe-holds-breath-worried-it-wont-re-open/?sh=8597eeedd88e">shut down</a>&nbsp;the Nord Stream I pipeline for maintenance, sparking fears a routine measure could be prolonged into a long-term closure in response to Western sanctions. The pipeline has since been&nbsp;<a href="https://www.forbes.com/sites/roberthart/2022/07/21/russia-restarts-key-gas-pipeline-to-europe-after-fears-moscow-would-keep-taps-closed/?sh=68920e113a93">restarted</a>. In June, the EU&nbsp;<a href="https://www.csis.org/analysis/european-union-imposes-partial-ban-russian-oil#:~:text=A1%3A%20On%20June%203%2C%20the,as%20of%20February%205%2C%202023." target="_blank" rel="noreferrer noopener">adopted</a>&nbsp;a round of sanctions (the sixth overall) targeted at Russian oil, with embargoes starting Dec. 5 on crude oil, and Feb. 5, 2023 on petroleum products — with an exemption from oil imported via pipeline.</p>



<h2 class="wp-block-heading">TANGENT</h2>



<p>On Monday, the European Union&nbsp;<a href="https://www.theguardian.com/world/2022/aug/08/eu-submits-final-text-talks-2015-iran-nuclear-deal-revival-tehran-washington" target="_blank" rel="noreferrer noopener">released</a>&nbsp;a final draft to revive a 2015 nuclear deal with Iran, in hopes of restoring Iranian crude exports to 2018 levels, when former United States President Donald Trump reneged on the deal.</p>



<h2 class="wp-block-heading">BIG NUMBER</h2>



<p>250,000. That’s how many barrels of oil Russia typically supplies through the southern leg of the Druzhba pipeline per day, Reuters reported.</p>



<h2 class="wp-block-heading">FURTHER READING</h2>



<p><a href="https://www.forbes.com/sites/ianpalmer/2022/07/28/russia-threatens-eu-reduces-us-industry-helps-to-untangle-the-natural-gas-war-in-europe/?sh=175004d12186">Russia Threatens, EU Reduces, US Industry Helps To Untangle The Natural Gas War In Europe.&nbsp;</a>(Forbes)</p>



<p><a href="https://www.forbes.com/sites/brianbushard/2022/07/20/russia-is-blackmailing-us-eu-plans-gas-reduction-as-putin-threatens-shutoff/?sh=2c8055492534">‘Russia Is Blackmailing Us’: EU Plans Gas Reduction As Putin Threatens Shutoff</a>&nbsp;(Forbes)</p>



<p><a href="https://www.forbes.com/sites/dereksaul/2022/07/22/germany-bails-out-energy-giant-uniper-in-latest-sign-of-deepening-european-energy-crisis/?sh=800273a53ad8">Germany Bails Out Energy Giant Uniper In Latest Sign Of Deepening European Energy Crisis </a>(Forbes)</p>



<p><strong><em>By Brian Bushard, Forbes Staff</em></strong></p>


Oil Prices Moving Down

Oil Prices Jump As Russian Oil Supplies Halted To Eastern Europe


<h2 class="wp-block-heading" id="h-topline">TOPLINE</h2>



<p>Global stock indexes and major cryptocurrencies dived on Thursday while commodities like oil and precious metals rallied as Russia’s&nbsp;<a href="https://www.forbes.com/sites/joewalsh/2022/02/23/russia-orders-special-military-operation-in-ukraine/?sh=72e111fc2321">invasion</a>&nbsp;of Ukraine sent shockwaves through international markets.&nbsp;</p>



<h2 class="wp-block-heading" id="h-key-facts">KEY FACTS</h2>



<p>European stocks tumbled as markets opened on Thursday morning, with key indexes including London’s FTSE 100 down 2.46%, Germany’s Dax 3.48%, France&#8217;s CAC40 3.01%, Spain’s Ibex 2.58%, Euronext 100 2.62% and Euro Stoxx 50 3.37%.</p>



<p>The slump mirrors falling stocks in the Asia Pacific region Thursday, with Japan’s Nikkei down 1.81%, Hong Kong’s Hang Seng 3.21%, Australia’s All Ordinaries 2.95% and Shanghai’s Composite 1.70%.&nbsp;&nbsp;&nbsp;</p>



<p>U.S. markets are on a similar path for when markets open, with the Dow down 1.38% in pre-market trading, Nasdaq 2.57% and S&amp;P 500 1.84%, with the latter&nbsp;<a href="https://www.forbes.com/sites/sergeiklebnikov/2022/02/23/sp-500-falls-deeper-into-correction-territory-as-ukraine-declares-state-of-emergency/?sh=793035b35e67">continuing</a>&nbsp;a days-long downwards trend.</p>



<p>The Moscow stock exchange, which uses the Russian ruble, suspended all trading Thursday amid enormous volatility in the currency and benchmark index MOEX was down nearly 40%.</p>



<p>Oil prices, meanwhile, jumped past $100 a barrel with the highest prices since 2014—Brent crude rose nearly 7% to $103 a barrel—and safe haven&nbsp;<a href="https://www.reuters.com/markets/europe/gold-rises-escalating-ukraine-crisis-spurs-safe-haven-bids-2022-02-24/" target="_blank" rel="noreferrer noopener">assets</a>&nbsp;like gold, silver platinum and palladium grew between 1.5% and 3%.&nbsp;&nbsp;&nbsp;&nbsp;</p>



<p>Major cryptocurrencies also crashed in the wake of the invasion, with&nbsp;<a href="https://www.forbes.com/digital-assets/assets/bitcoin-btc/?sh=23274a6d4357">bitcoin</a>&nbsp;<a href="https://www.forbes.com/sites/siladityaray/2022/02/23/bitcoin-falls-below-35000-as-putin-orders-military-operation-in-ukraine/?sh=56d6315f4a3a">down 8%</a>&nbsp;in the last 24 hours,&nbsp;<a href="https://www.forbes.com/digital-assets/assets/ether-eth/?sh=6457a2717b0e">ether 12%</a>, Binance’s&nbsp;<a href="https://www.forbes.com/digital-assets/assets/binance-coin-bnb/?sh=6b8afc44ae78">BNB 11%</a>&nbsp;and&nbsp;<a href="https://www.forbes.com/digital-assets/assets/ripple-xrp/?sh=38a7ebe1535a">Ripple’s XRP 13%</a>.&nbsp;&nbsp;</p>



<h2 class="wp-block-heading" id="h-what-to-watch-for">WHAT TO WATCH FOR</h2>



<p>More sanctions. World leaders have&nbsp;<a href="https://www.forbes.com/sites/dereksaul/2022/02/23/russia-sanctions-tracker-first-barrage-of-penalties-span-japan-to-us/?sh=3379f45c149a">already imposed fresh sanctions</a>&nbsp;on Russian banks, lawmakers and oligarchs and President Joe Biden warned Thursdays’ G7 meeting would yield more “<a href="https://www.forbes.com/sites/siladityaray/2022/02/24/russias-invasion-of-ukraine-draws-international-condemnation-and-threats-of-more-sanctions/?sh=3f2fd15c7b3b">severe sanctions</a>’ on Russia.&nbsp; The sanctions—which could be severe given the scale of Russia’s incursion—could cripple Russia’s economy and bar it from key markets. European&nbsp;<a href="https://www.politico.eu/article/eu-russia-new-sanctions-package-ukraine/" target="_blank" rel="noreferrer noopener">leaders</a>&nbsp;have already scheduled an emergency meeting to discuss the measures on Thursday evening.&nbsp;</p>



<h2 class="wp-block-heading" id="h-further-reading">FURTHER READING</h2>



<p><a href="https://www.forbes.com/sites/siladityaray/2022/02/24/russias-invasion-of-ukraine-draws-international-condemnation-and-threats-of-more-sanctions/?sh=3f2fd15c7b3b">Russia’s Invasion Of Ukraine Draws International Condemnation And Threats Of More Sanctions</a>&nbsp;(Forbes)</p>



<p><a href="https://www.forbes.com/sites/joewalsh/2022/02/23/russia-orders-special-military-operation-in-ukraine/?sh=72e111fc2321">Russia Orders ‘Special Military Operation’ In Ukraine</a> (Forbes)</p>



<p><strong><em>By <a href="https://www.forbes.com/sites/roberthart/"></a>Robert Hart, Forbes Staff</em></strong></p>


Global Stocks Plummet And Oil Soars As Russia Invades Ukraine


<p><strong>After record production cuts in April intended to prop up the market amid a demand crisis caused by the coronavirus pandemic, the world’s largest oil producers are <a rel="noreferrer noopener" href="https://www.nytimes.com/2020/07/12/business/economy/opec-russia-oil-production-coronavirus.html" target="_blank">expected</a> to ease up on the restrictions and begin to increase their output next month.</strong></p>



<p><strong>KEY FACTS</strong></p>



<ul class="wp-block-list"><li>Saudi Arabia, Russia, and the other members of OPEC+ will meet Wednesday to discuss the current market situation and debate future production limits, the <em>Wall Street Journal </em><a rel="noreferrer noopener" href="https://www.wsj.com/articles/opec-allies-set-to-ease-oil-cuts-seeing-pandemic-recovery-11594510347" target="_blank">reported</a> over the weekend, adding that most delegates in the organization support loosening restrictions.</li></ul>



<ul class="wp-block-list"><li>As lockdown measures ease across the globe, demand for oil is slowly beginning to rise again as shipping and air travel resume. </li></ul>



<ul class="wp-block-list"><li>Oil prices are still down significantly from pre-pandemic levels, however, with the Brent international benchmark priced at about 30% of January levels. </li></ul>



<ul class="wp-block-list"><li>The International Energy Agency said Friday that while global demand for oil had recovered strongly in China and India in May, world demand is still projected to decline during the second half of the year before recovering in 2021. </li></ul>



<ul class="wp-block-list"><li>The recent spike coronavirus cases and new lockdowns are creating “more uncertainty”: additional lockdowns could discourage travel and international trade, which would put more downward pressure on prices.</li></ul>



<ul class="wp-block-list"><li>The risk to the oil market is “almost certainly to the downside,” the IAE said. </li></ul>



<p><strong>KEY BACKGROUND</strong></p>



<p>In April, the members of the Organization of Petroleum Exporting Countries (OPEC) and its allies&nbsp;<a href="https://www.forbes.com/sites/sarahhansen/2020/04/09/saudi-arabia-and-russia-agree-to-historic-oil-production-cuts-but-they-may-not-be-enough-to-rescue-the-market/#63cf1d8c641a">agreed to record oil production cuts</a>&nbsp;of 9.7 million barrels a day as the coronavirus decimated global demand for crude oil. The agreement put an end to a weeks-long price war between Russia and Saudi Arabia that added even more pressure to an already-struggling market.&nbsp;</p>



<p><strong>CRUCIAL QUOTE</strong></p>



<p>“If OPEC clings to restraining production to keep up prices, I think it’s suicidal,” a person familiar with Saudi Arabia’s thinking told the <em>Journal</em>. “There’s going to be a scramble for market share, and the trick is how the low cost producers assert themselves without crashing the oil price.”</p>



<p> <em>&#8211;  <a href="https://www.forbes.com/sites/sarahhansen/">Sarah Hansen</a>, Forbes Staff, <a href="https://www.forbes.com/markets">Markets</a></em></p>



<p> </p>


Preis für Rohöl an der Börse

OPEC And Its Allies Are Ready To Boost Production, But Here’s Why An Oil Market Recovery Isn’t Guaranteed


<p><strong>TOPLINE:</strong> After months of sagging demand and wild swings in prices that at one point fell below zero, oil has now seen five straight days of gains as economies slowly reopen and traders bet on a comeback.</p>



<h4 class="wp-block-heading">KEY FACTS</h4>



<p>U.S. oil prices jumped nearly 20% on Tuesday, with the June futures contract for West Texas Intermediate crude reaching $24.56 on its fifth straight day of gains.&nbsp;</p>



<p>Last month, futures prices for the May WTI contract&nbsp;<a href="https://www.forbes.com/sites/sarahhansen/2020/04/21/heres-what-negative-oil-prices-really-mean/#4c6a349d5a85">plunged into the negative</a>&nbsp;for the first time in history as demand cratered and storage space filled up.&nbsp;</p>



<p>Brent crude, the international benchmark, saw a bump of almost 14% on Tuesday and settled at $30.97 per barrel.&nbsp;</p>



<p>Prices are responding to a slow uptick in demand: As some states and cities take cautious steps towards reopening, and as Europe and China return to work, investors are optimistic that restrictions on travel and movement will continue to ease.&nbsp;</p>



<p>At the same time, global oil production is dropping thanks to a deal between OPEC and its allies last month to reduce collective output by some 10 million barrels per day.</p>



<p>Some American producers have also taken steps to slow down production; last month, ConocoPhillips said it would cut&nbsp;<a href="http://www.conocophillips.com/news-media/story/conocophillips-to-voluntarily-curtail-225-000-gross-barrels-of-oil-per-day-reduces-2020-cash-uses-by-additional-3-billion-for-total-reduction-of-over-5-billion/" target="_blank" rel="noreferrer noopener">225,000 barrels per day</a>.&nbsp;</p>



<h4 class="wp-block-heading">CRUCIAL QUOTE</h4>



<p>“The reopening of economies has injected a degree of cautious optimism back into an oil market that plunged to historic lows only weeks ago,” RBC analyst Michael Tran&nbsp;<a href="https://www.cnbc.com/2020/05/05/oil-jumps-13percent-in-fifth-day-of-gains-on-demand-recovery-and-production-cuts.html" target="_blank" rel="noreferrer noopener">said</a>&nbsp;in a client note.</p>



<h4 class="wp-block-heading">BIG NUMBERS</h4>



<p>Last week, ExxonMobil&nbsp;<a href="https://www.forbes.com/companies/exxon-mobil" target="_blank" rel="noreferrer noopener">XOM</a>&nbsp;reported its&nbsp;<a href="https://markets.businessinsider.com/news/stocks/exxonmobil-q1-earnings-first-loss-decades-oil-market-price-plunge-2020-5-1029155170" target="_blank" rel="noreferrer noopener">first quarterly earnings loss</a>&nbsp;since 1988 and cut its spending by $10 billion. Two weeks ago, BP saw its&nbsp;<a href="https://www.cnbc.com/2020/04/28/bp-earnings.html" target="_blank" rel="noreferrer noopener">quarterly profit fall 67%</a>&nbsp;compared to the same period last year.&nbsp;</p>



<h4 class="wp-block-heading">TANGENT</h4>



<p>International oil hasn’t been hit nearly as hard as its American counterpart by the coronavirus crisis. The reason for the difference boils down to storage: Brent crude is priced in the middle of the North Sea, where tanker storage is ample and accessible, while WTI oil storage in the U.S. is limited and hard to reach. As a result, Brent is more removed from the coronavirus demand shock while WTI prices are much more sensitive to it.</p>



<h4 class="wp-block-heading">WHAT TO WATCH FOR</h4>



<p>Despite the major production cuts, the oil market is still under pressure and the next few weeks are likely to reveal more weakness. “The existing problems did not magically get resolved, the storage constraint is still there, but a couple of weeks away, so we will see its effect on prices soon, as the market will get tight,” <a rel="noreferrer noopener" href="https://www.barrons.com/articles/home-price-growth-could-slow-to-a-crawl-51588630813" target="_blank">writes</a> Per Magnus Nysveen, head of analysis at Rystad Energy. </p>



<p><em>&#8211;<a href="https://www.forbes.com/sites/sarahhansen/">Sarah Hansen</a>, Forbes Staff, <a href="https://www.forbes.com/markets">Markets</a></em></p>


The Index of Oil. Up.

Why Are Oil Prices Rebounding?


<p><strong>Recovery in oil prices will depend on recovery in the global economy, says Annabel Bishop, Chief Economist at Investec in Johannesburg.</strong></p>



<p>The recent collapse in the WTI (West Texas Intermediate) oil price has added to negative market sentiment, in an environment where risk aversion was already at high levels. Worsening forecasts of the economic impact of Covid-19 has been a key driver of the elevation in risk aversion in global financial markets, with the global recession expected to be deep and lengthy.</p>



<p>The crisis is unprecedented, and there is no certainty of its length and duration, or the impact it will have. Uncertainty heightens risk aversion in financial markets and the deep recessions forecast around the globe exacerbates risk-off sentiment. Risk aversion in financial markets would indeed be exacerbated further if economic growth forecasts for advanced economies weaken substantially further, and/or if uncertainty around Covid-19 intensifies instead of waning.</p>



<p>While this is not expected, should the path of the pandemic change, the discovery of vaccines and treatment/s be seen to be substantially delayed, the extent of disruptions to supply chains and production substantially greater than anticipated and/or policy responses viewed as insufficient, risk-off in global financial markets could escalate substantially further.</p>



<p>The severe negative impact on health in the United States, as fatalities and infections rise, has likely also been extremely negative for financial markets’ sentiment, with the world’s largest economy expected to see a deep recession this year (-5.9% y/y IMF), and with the negative impacts leaching into next year as well.</p>



<p>Financial markets are still at weak levels, and are likely to remain volatile and weak in the near term until evidence for the beginnings of a recovery in the global economy become clearer.</p>



<p>The collapse in the WTI oil price has come as chronic oversupply of oil has occurred. Storage facilities are close to capacity, inventories are very high, and demand is extremely weak. While WTI was negative yesterday morning at -$4.4/bbl, with pricing on May futures, (with suppliers essentially paying to have deliveries taken off their hands), the Brent crude oil price was at $23.8/bbl. It was expected that soon the WTI pricing would revert to June futures and as a result, the WTI price move back towards that of Brent – this has been in the process of beginning to occur this afternoon as US markets have opened. However, the Brent crude oil price has weakened with its pricing also determined by future contracts. Storage facilities are near full capacity, and demand is exceptionally weak, and production capacity has not been reduced instantly as this is not possible.</p>



<p>WTI and Brent are one of the two main benchmarks for oil prices worldwide, Brent is North Sea crude oil essentially, WTI Texas crude oil, both are light sweet crude oils. The quoted prices are influenced by the futures prices, as noted above, which have collapsed and oil prices in the immediate term are likely to be suppressed. While there are a number of other issues besetting the pricing WTI as well, the prices are not expected to lift until substantial supply cuts occur and demand increases notably. While oil importers will gain, and oil exporters lose substantial revenues, the recovery in oil prices will depend on the recovery in the global economy.</p>



<p>The IMF highlights that “(a) partial recovery is projected for 2021, with above trend growth rates, but the level of GDP will remain below the pre-virus trend, with considerable uncertainty about the strength of the rebound. Much worse growth outcomes are possible and maybe even likely. This would follow if the pandemic and containment measures last longer”. This signals a suppressed view for oil prices for some time.</p>


oil pumps at sunset,  industrial oil pumps equipment.

Oil’s Not Well: ‘Global Recession Expected To Be Deep And Lengthy’

<p>As Winston Churchill said, ‘to improve is to change’. Arise West Africa! Endowed with mineral wealth, if it is to improve economically the region must change and begin to aggressively develop and industrialize the sectors at its disposal.</p>
<p>Current economic ramifications in Nigeria are predicated on the 60% drop in the oil price. Sierra Leone too has suffered with the price of its biggest export earner, iron ore, falling 50%. As global demand for iron ore slows, the commodity has traded at record lows and has seen mining companies in Sierra Leone enter administration or close down.</p>
<p>When you consider the dependency these countries have on the resources and the lack of industry to develop them, governments are effectively playing Russian roulette with their economies. How then can countries learn from these lessons? The impact Ebola continues to have on West Africa is still prevalent. The mining sector saw many casualties, both human and economic, with the closure of several mines seen as an effective way to reduce the spread of the disease.</p>
<p>In Nigeria, a lack of refineries operating at maximum capacity proves that even if mineral rich countries are successful in extracting their resources, their ability to develop the infrastructure needs to be made a priority. In order to attain maximum value, every facet of the value chain in the industrialization process must be fully operational. The added value from the finished products made from the mined minerals will be greater, not only in terms of export value but also from the job creation and socio-economic development aspect. There is a widespread belief that the falling oil price makes a mockery of the Nigerian economy. It is rather an opportunity for diversification. However, there is a fervent danger of getting caught up in economic theory without implementing it.</p>
<p>To progress, the mining sector needs to solve infrastructural challenges. West African Exploration, a subsidiary of Sable Mining Africa, recently signed an infrastructural development agreement with the Liberian government. This will create employment, development and significant tax income. We are seeing the inner workings of getting it right. Africa, once seen as blank canvas for foreign companies to paint their pseudo-colonial economic activities, is now beginning to take a stand.</p>
<p>Mining opportunities in Nigeria are vast. The high costs involved present a barrier to entry and with those high costs patience is required. Exploratory costs are not always recouped. Therein lies an opportunity for any shrewd investor to assemble a team of competent geologists to determine the value of the vast mineral reserves. Notwithstanding the current security issues in the northern Nigeria, there are a growing number of opportunities for investors to pursue. The mining sector is crucial to Nigeria realizing its true economic potential.</p>
<p>Many western mining giants maintain a stranglehold on the continents mineral resources. Ghana’s success with its mining sector is partly due to an effective framework that involves paying a 5% mining royalty to the government. For many other countries in the region, a lack of technical expertise remains the biggest problem, thus there is a tendency to worship Western companies instead of seeing them for what they are; partners in achieving a common goal – economic development. A symbiotic relationship is required between investors and governments. Governments need assurance that investors are ethical and responsible and investors need confidence that governments will provide the necessary support in terms of regulation and licensing as well as attractive tax breaks and more importantly reduce the bureaucratic bottlenecks.</p>
<p>Despite the lack of geological data, there is growing rhetoric from representatives of governments for investors to engage in the development of the sector. Policy reformations are a step in the right direction. However, one sincerely hopes that this translates into practical, hands-on solutions. Only then will we see the sector really take off. If industry is the lifeblood of an economy, the mining sector is the transfusion needed to keep Nigeria PLC going.</p>


Tag: Oil price

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